This morning I made a Day Trade using a strategy I’ve been studying. The strategy involves a “gapping stock.” I gapping stock is a stock that is up or down a large amount at the open.<\/p>\n
The gapping stock I made a trade with today is Marin Software (MRIN).<\/p>\n
Yesterday the stock closed at $5.69. After the close the company announced that they signed a deal with Google. This morning in the pre-market the stock was up big. The stock opened at $10.58, up almost 100%. This is a gapping stock and exactly what Day Traders look for.<\/p>\n
When a stock gaps up this much it’s almost certain it will sell off a bit with profit taking. You never want to get into a position on the opening candlestick. The first few candles will be very volatile. I got into my position about 10 candles into the day. That would be 9:40. By this time the chart showed me that the stock would be dropping. I tried to Short 1000 shares at $10 but the stock is listed as hard to borrow (HTB) and I couldn’t get filled. There were probably millions of traders trying to Short. Since I’ve been doing this for 30 years, I quickly went to the options. To my disappointment, the stock does not have weekly options. I decided to Sell to Open 10 contracts of the MRIN 10\/15\/21 $12.50 Calls. This was a Naked option, and it’s also a Short position. I received a premium of $1.80. That’s $1800.<\/p>\n
I went with the 10\/15\/21 Expiration Date because that was the next date available. The Strike Prices listed were $10 and $12.50. The stock was at $10 so I didn’t want to sell a Naked $10 Call going out to 10\/15\/21. If I was wrong and the stock started to go up I could get into trouble. I went with the $12.50 Strike which gave me breathing room. The stock would have to go up a lot more before I would get into trouble and have to cover.<\/p>\n
I was correct with my prediction and the stock continued down. With the stock in the $8.50 area it looked like it hit support. I looked at my premium and it was at $1.15. At this point I was in the position for about 25 minutes. I got into this position as a Day Trade so I was looking to get out. However, I could have stayed in until Oct 15th and kept the entire $1.80 premium. Since it was a Naked Call I didn’t even make an investment. I decided to jump out and lock in profit. I did a Buy to Close for $1.15. I received an $1800 premium and I spent $1150 to close the position. My 25 minute profit was $650.<\/p>\n
9\/22\/21 \u2013 Sell to Open 10 MRIN 10\/15\/21 $12.50 C @ $1.80<\/strong><\/p>\n 9\/22\/21 \u2013 Buy to Close 10 MRIN 10\/15\/21 $12.50 C @ $1.15 <\/strong><\/p>\n I’ve been doing very well with my Day Trading. The strategy above is great during earnings season. When a stock announces earnings many times it will gap, up or down. If a stock gaps down the same thing happens. If a stock drops too much many times investors will see a buying opportunity and the stock will move up.<\/p>\n If you have any questions on this trade send me an email.<\/p>\n <\/p>\n Successful trading,<\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" This morning I made a Day Trade using a strategy I’ve been studying. The strategy involves a “gapping stock.” I gapping stock is a stock that is up or down a large amount at the open. The gapping stock I made a trade with today is Marin Software (MRIN). Yesterday the stock closed at $5.69. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-12302","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-3cq","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/12302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12302"}],"version-history":[{"count":3,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/12302\/revisions"}],"predecessor-version":[{"id":12306,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/12302\/revisions\/12306"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Profit +$650<\/strong><\/span><\/h4>\n