Low VIX
size=”2″ face=”Arial, Helvetica”>Join me, fellow
TradingMarkets.com content providers, and other traders and
money managers at the Trading Markets 2000 conference at the
Venetian Hotel Resort and Casino in Las Vegas on October
13-15, 2000.
face=”Arial, Helvetica”>For a back-to-basics look at
retracement levels, see my latest trading lesson,
Introduction To Retracements.
face=”Arial, Helvetica”>For those willing to assume a high
degree of risk, Digital Island
(
ISLD |
Quote |
Chart |
News |
PowerRating), on the
Where The Action Is List, may present an opportunity for
covered calls. You can buy the stock for 45 15/16, and you
can sell the August 50 calls for 5 3/8. This represents
approximately a 20% return (more than 200% annualized, based
on 37 days until expiration) should the stock be called
away.
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The
Nets
(
$IIX.X |
Quote |
Chart |
News |
PowerRating), mentioned last night, got another shot
in the arm on the positive earnings announcement from Ariba
(
ARBA |
Quote |
Chart |
News |
PowerRating). Continue to look for buying opportunities in
calls and call spreads here.
On
the short side, banks
(
$BKX.X |
Quote |
Chart |
News |
PowerRating), mentioned recently,
still look vulnerable. Continue to look for buying
opportunities in puts and put spreads here.
Continuing
on the short side, major oils
(
$XOI.X |
Quote |
Chart |
News |
PowerRating) and oil
service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday night, appear
to be headed lower. Continue to look for buying
opportunities in puts and put spreads here, but keep an eye
on the underlying commodity, as it was up on Thursday.
For
the OEX traders, once again, the VIX remains at relatively
low levels. This suggests that there may be a buying
opportunity in puts and put spreads. However, like I’ve said
recently, don’t fight the tape; wait for confirmation to the
downside.
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Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!