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The problems with pratice is your CRM trade is a huge winner.
Your first real trade could be a big loser.
If you had done both, you'd be about even.
This is where options come into the picture. To short 250 CRM at $130 (when is was that high) cost is $32,500.
Buying long put options, and selling puts against it, as a spread, gets you into 200 shares for around $2900 for the August $105.00 put.
CRM does have weekly options, making it more attractive to use options. Close to 30 weeks.
The problems with pratice is your CRM trade is a huge winner.
Your first real trade could be a big loser.
If you had done both, you'd be about even.
This is where options come into the picture. To short 250 CRM at $130 (when is was that high) cost is $32,500.
Buying long put options, and selling puts against it, as a spread, gets you into 200 shares for around $2900 for the August $105.00 put.
CRM does have weekly options, making it more attractive to use options. Close to 30 weeks.
I have shorted CRM with my real brokerage account money so I have made quite a bit. But I am using a practice account for options. I am going to slowly buy to cover. But I have a good feeling they will announce disappointing earnings and negative outlook.
1. The S&P futures were up,
2. The economic data was good,
3. The stock could be over sold in the short term,
4. And those two news stories may have triggered a little short covering.
Rising markets can lift all boats.
It's been 105 down to 97 back to 105 for over a month = sideways.
That could be considered base forming = a move up.
You know your entry point, so you have to have an exit point.
As you can see from today, the stock can open way higher than it closed the day before = a good reason to watch the after market and pre market trading. I see no shocking news to explain the move up, but it is just like a long position, it can reverse at any time.
If you are concerned, you could buy a Feb. $115 call option for $5.00 to protect your short position should the stock keep going up. Breakeven would be $120. But, there are weekly options to manage the Feb. $115 call.
Last edited by howard555; 01-19-2012 at 10:11 AM..
GOOG's falling in pre. I thought of getting some quick puts yesterday but didn't think it through. Golden opportunity gone.
The premarket is good, compared to the $573 it hit in the after hours.
A few brokerages lowered their price targets.
Most are still over $700, one is over $800.
Baird make the most shocking price target change.
They lowered their Google price target from:
$760........drum roll.........down to $750.
They were sooooo disappointed in the earnings they had to go down 1.3% (10 / 760)
The premarket is good, compared to the $573 it hit in the after hours.
A few brokerages lowered their price targets.
Most are still over $700, one is over $800.
Baird make the most shocking price target change.
They lowered their Google price target from:
$760........drum roll.........down to $750.
They were sooooo disappointed in the earnings they had to go down 1.3% (10 / 760)
Some newsletters put out a few months ago that GOOG is going to 1000. I read one as late as November. Many bought into the hype. Are AAPL fans paying attention?
Nothing is sustainable forever in the stock market. If you are up 100 or 200%, sell and move on to the next growth equity
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