I am making this post as my week ending post because this week I didn’t make any trades in my normal fashion, but I did make a bunch of Day Trades. Day trading is specifically buying and selling stocks and options within the same trading day. Strictly, day trading is trading only within a day, such that all positions are closed before the market closes for the trading day. Many traders may not be so strict or may have day trading as one component of an overall strategy. Day trading was once an activity that was exclusive to financial firms and professional speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the popularity of electronic trading and margin trading, day trading has become more common.
I am not a day trader! However, when the market becomes so volatile, as it is now, I do have “Day Trading” in my arsenal. I will get out of trades fast if a trade moves into a profit situation. If you hit the link “I’m out of UA” you will go to a post from January 11th. This post was me getting out of 2 trades that I was in for only 2 hours. 1 was Under Armour (UA) and the other was Netflix (NFLX). These were day trades! I was in and out of the trades in the same trading day.
This week I did too many Day Trades to list them all as I was making them. I made over 15 trades getting in and out within the same day. Some of my trades I was in for a few minutes. Believe it of not, every one involved NFLX! From all my Day Trades this week I brought in $2200. I know not listing every trade does not fit into my transparency policy but there were too many to list. This will not happen too often but NFLX was making big swings during the day so I took advantage. I was getting in and out fast. I didn’t have time to list and write a story about each trade. Even with all the trades I was still profitable considering the broker’s fees. On-line trading is very inexpensive.
Remember, I am not a Day Trader! But if I can get out in an hour or so and make $500 I will. The way the market’s been moving lately I want to grab some profit when I can. I do not recommend Day Trading. If you make 3 or more day trades in a 5 day period you will be listed as a “Pattern Day Trader.” On my account I am listed as a Pattern Day Trader because I make day trades from time to time. If you are a Pattern Day Trader you must maintain over $25,000 in your account by law. So you might want to avoid getting into the Pattern Day Trader classification. Your margin requirement also changes. Trading on margin will magnify you gains and also your loses. I know I do not have the Margin page done yet but it will be coming soon. Until then I would recommend not trading on margin until you completely understand the ramifications of being on margin. I will also be writing a Day Traders section in the blog soon.
Week 2/8/16 – 2/12/16 Day Trading total
Profit $2200
In the “Active Trade” and “Trade History” pages I will list the total of all day trades as one number. If I only make one or two day trades in the week I will list then as individual trades as normal as I did on January 11th.
Thank you for the emails and comments on the post. I enjoy hearing from everyone!
Enjoy the 3 day weekend and the trading free Monday.
Steve
The Options Coach