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Should I Buy GME Stock Right Now?I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Let’s talk about GameStop GME because the stock’s gone absolutely crazy. I mean, yesterday, January 25th, it was up 144% before swinging into negative territory. Then it reversed again and closed up more than 18%. And today, it’s up another 22% to trade at $93.50. One month ago, it was trading around $20! So, today, I want to look at exactly what’s happening with GME, and let you know if it looks like a good time to buy the stock. What is Happening with GME? GME made its first big move in mid-January after adding Ryan Cohen to its board. This guy is the co-founder and former CEO of Chewy CHWY — the online pet supplies store — so he knows a lot about retail. The stock jumped from $20 to above $40 when that news hit, and this caught a lot of short-sellers off-guard. In fact, according to one CNBC article I read, GME is the most heavily shorted U.S. stock. The article states, “GameStop has been a popular short target on Wall Street. In fact, more than 138% of its float shares had been borrowed and sold short, the single most shorted name in the U.S. stock market.” What’s a Short Squeeze? For those that don’t know, short interest is when a trader bets against the stock, meaning they want it to go lower. To do this, they’ll borrow shares from their broker at one price. If the stock price falls, they can buy the shares back at a lower price to repay their broker and keep the difference as profit. But if the stock rallies, short sellers will have to buy back the shares at a higher price to limit losses. For stocks that are heavily shorted, this can create a sort of ripple effect: Because how do you close a “short trade”? Well, you SOLD the stock earlier so now you have to BUY it back. So when more shorts start covering, i.e. BUYING, the stock climbs higher and higher. This is the short squeeze. And in GME’s situation, as the stock rallied on good fundamental news, shorts started to cover. Then the Reddit crowd got involved. There’s a forum on Reddit called “WallStreetBets”, and their purpose is to, “make money and being amused while doing it.” Their words, not mine. As GME was rallying, online traders on Reddit began posting about the stock and buying it to manipulate the shorts. And as they bought the stock, the price soared, forcing more shorts to cover their positions, and again: This means that more people are BUYING. It’s not surprising there are a lot of traders upset about this manipulation. Famous short-seller Citron Research is one of them and said it would no longer comment on GME because of the “angry mob” on Reddit. Is GME a Buy or a Sell? Now, you could make an argument for GME stock to keep going higher. There are probably some shorts still hanging on. And fundamentally, the company did report solid holiday same-store sales and digital sales growth a few weeks back. But in reality, it’s dangerous to trade GME right now. For starters, look how overbought this stock is. And a lot of times, when these stocks fall, they fall fast. Remember Eastman Kodak KODK last summer when it went from $2 to $60 in two days. And then back down to $6 a month later. And implied volatility is all over the place. This means options premiums are crazy high right now for options buyers. But it’s not a good time to sell options, either, because it’s hard to pinpoint levels of support or resistance. So, yes, you could have made a lot of money trying to trade GME stock, but you could’ve lost a lot of money, too. And whenever I see a parabolic move as we’ve seen in GME , I leave it alone. The risk is simply not worth it. Because at some point, the Reddit traders might lose interest in this stock. So they would just sell it and move on to the next stock, and that could make the stock crash. After all, there are 2.3MM people in this group! More Stocks to Watch Before we go, I just want to check out some more of these “short squeeze” stocks that have been volatile this week. The first is Palantir PLTR , which ran from $26 to almost $40 in two days. Today, the stock is down 3% at $35.12. Another is BlackBerry BB . BB stock ran from $7.50 in mid-January to above $20 yesterday — its highest level since 2011. Today, the stock is up 3.6% at $18.60. And here’s Bed Bath & Beyond BBBY , which was trading around $18 earlier this month, but hit a three-year high near $48 yesterday. Today, BBBY is up 0.1% at $30.68. Finally, there’s AMC AMC . It was trading below $2 at the start of the month and hit a high of $5.19 earlier today. While I’m not going to be trading these stocks because of the risk involved, I’ll certainly be keeping my eye on them.
NYSE:GME
by rockwelltrading
4
$MSFT 217c 1/22 - Entry 214, PT 217, SL 213 #optionsValid: January 19th, 2020 Rationale: Funds will, at some point, buy up a bunch of cheap tech. We're also approaching the bottom of long term support. I want to scalp the next round of funds buying big tech. There is a historical shorter term demand/supply gap between 214 and 217. Entry Rules 5 minute close above entry point, indicates positive momentum. Purchase a strike near target Scalps - buy the weekly Swings - buy one week out Stop loss only after Entry, indicates sideway action is taking place, exit to avoid theta or downside.
NASDAQ:MSFTLong
by TroydTrades
How To Start A Successful Trading BusinessWhen you start trading, you need to go into it like you would if you were getting ready to start a business. Too often, I see new ‘traders’ who open their account and before ever mapping out any goals, a strategy, a trading plan, or anything, they’re already putting money into the markets… …and for me, this isn’t trading, this is gambling. So in this article, I’m going to walk you through how you can start your own successful trading business. So let’s dive in! Starting A Trading Business: Step 1 – Charting Software First, as a technical trader (like me) you MUST have good charting software. Charting software is your window into the world of stocks. As a technical trader, we rely on charts and indicators to find high-probability setups. Charting software with good indicators is an essential first step in your path to being a successful trader. I personally use (and highly recommend) TradingView. It is a paid service and for what I do, I use the Pro Version which currently costs $14.95 per month but it is well worth it. Remember, starting your own successful trading business requires a modest investment into the ‘infrastructure’ of your business. Step 2 – Finding The Right Broker Now on to step 2, finding the right broker for you! Finding the right broker can be a tricky process, especially if you live outside of the United States. If you’re trading stocks and options, I highly recommend tastyworks, or Interactive Brokers if you live outside the U.S. Starting A Trading Business: Step 3 – Trading Strategy Next, now that you have your charting software and broker, every trader needs a good trading strategy. Similar to the broker, one size does not fit all. Why? Well, there are a LOT of variables that can go into developing your trading strategy. For example, are you trading for Income or Growth or the amount you have to trade with? All of these things play a big factor in the type of strategy you want to, can, or should trade. Right now, I’m trading two strategies. My core strategies right now are, The PowerX Strategy and The Wheel. Step 4 – Trading Computer The next thing to consider when getting your trading business set up is you will need a computer. Almost all brokers and trading software are cloud-based, so you don’t need a seriously advanced computer anymore. Most computers that are less than 3 years old should be more than powerful enough to run even the most system-intensive trading platform. Step 5 – Additional Monitors. Now, for your home set up, I think at least one additional monitor is a must. The good news is that if you have a laptop, you already have one monitor! If you travel a lot (like me) I would highly recommend the ASUS MB169B+ 15.6″ Full HD 1920×1080 IPS USB Portable Monitor. They’re lightweight and work great on the road or at home. It fits easily in my backpack (because I HATE checking bags) and doesn’t add much weight. Step 6 – Trading Newsletters Next, over my morning coffee, I like to read a few different trading newsletters. I have three primary newsletters right now where I get most of my market-related news. Most of the talking heads on TV are absolutely terrible for getting non-biased information anymore. No matter what station, everything you hear is coming through some sort of filter. For this reason, I stick with these three newsletters that I’ve found to provide good info: - Morning Brew - Seeking Alpha’s Wall Street Breakfast - The Rockwell Trading Newsletter Summary Now that you have all of the pieces in place to start your trading business off on the right foot, in my next article I’m going to go through something that at first, I’m sure you will cringe: Trading Taxes. But I assure you if you’re proactive and take the time to get set up and structured properly, taxes aren’t actually as bad as you’d think for full-time traders. I hope this has helped and you’ve enjoyed it. Good trading!
DJ:DJIEducation
by rockwelltrading
3 Reasons Why You Should TradeNow before I started, you may have thought my top reasons were probably things like: You can trade anywhere, you can do it anytime, and you will have a lot of free time and money. Yes, all of these are good reasons, but I wanted to give you my top three reasons why I think that you should trade. Reason Number Three: Trading Can Make You Money & Money Buys Happiness I’m a firm believer that money CAN buy happiness. Now, I know that this is controversial because people say, “Money can’t buy you happiness.” Based on my experience, they are wrong. I will prove it to you. If you’re an avid reader of this blog, a subscriber to my YouTube channel, or are a member of Rockwell Trading, you know I’m always about the facts. I have multiple trading accounts, and recently I was trading a small account live on my YouTube channel using a trading strategy called The Wheel. Many of you are already trading this strategy as well. On this account up to this point, I have made $3,204, in a month. Even though this isn’t my main account, and is one of my smaller ones, $3,200 is not too bad. Let me prove to you how money can buy happiness. Let me ask you, do know somebody who is in a tough spot right now with everything that we have going on in the world? Do you know someone who got laid off and couldn’t pay their rent? Someone who got sick and couldn’t afford to buy the needed medication? What about somebody whose car broke down, and didn’t have money to fix it making transportation difficult? So so let me ask you this. What if you could have given them $3,204? Do you think that this could have changed that person’s life? Making $3,000 for me is nice, but it doesn’t change my life. But maybe you know somebody whose life we can change with this. Very recently, I decided to give away that month’s worth of profits to a few people in need. I had our members and viewers nominate someone they knew, who was currently having a tough time. We received so many applications, and I reviewed the (heart-wrenching) submissions. I picked the two candidates who I felt could use it the most, and I split the profits from this trading account and sent them a check. It helped them out a great deal, and it meant the world to them. So for me, this was very solid proof that money CAN buy happiness, and can change your life for the better. I believe we have a responsibility to make more money to help not just ourselves, but others. Money buys happiness and this is why I will keep doing it. I’m doing this information out there because I want you to succeed. I want you to make money to give back. There are so many people in need that you could help. Here is an example of one of the nominations for the recipient of the trading profits we gave away. This nominee is a single mother of four children. Her son had a needed surgery a while back and she got stuck with a $9,000 bill. She’s getting garnished for this by taking $150 from each of her paychecks. She’s a nursing assistant and doesn’t receive all that much. She wasn’t one of the recipients that I chose as the final two, but I decided to send her the money that she needed anyway. Now doesn’t have to worry about her paychecks getting garnished for a whole year. Here is an email that I received over the weekend, and it’s from a man named Robert, and it read, “Markus, thank you for being you, brother! Could go into a long story about how ironic it is that I’ve been a Rockwell member for almost four years and finally started applying your trading rules in August of 2020, and had one of my best months ever." "But that’s not what this is all about. I would like to donate an additional $300 to whoever you decide to give the money to. I feel very blessed and just want to pay it forward. Let me know the best method to get the money to you." "Thanks for your persistence and all you do.” Why I’m showing you this e-mail? This is exactly what happens when we start making money together. I know that people are probably telling you, “You can’t make money with trading.” Well, you know what? Prove them wrong. You can make money with trading. Is it easy? No, because you need three things: You need the right strategy, the right tools, and the right mindset. Together we can make a difference Money buys happiness. I believe we have a moral obligation to make as much money as we possibly can to be like Robert. I know that many of you are already donating. I mean, you have told me in these emails and I’m so, so proud of you for what you’re doing already. Together we can make a difference. This is what this blog is all about, and this is what this message is all about.
NASDAQ:TSLA
by rockwelltrading
3
Options Idea: Sell The PAM Sep. 18, 2020 10.0 Put @ $0.40Pampa Energia (PAM) is reversing a long-term downtrend, and beginning to trend upwards. After hitting a low of $8.72 in March, we’ve been seeing higher highs and lower lows for the last 4 months. This is an Argentine stock and it’ll probably see a bump higher after the government finishes its sovereign debt restructuring. Also, PAM has a share buy-back program in place and management has been very aggressive about buying back their ADRs when they get close to the $10 zone, which is the strike we've chosen for our naked put. Warning : PAM options are not liquid. So if you decide to enter into this trade, you’ll probably have to take all the way to Sep 18. Since there isn’t much liquidity, so probably won't be for everyone, but we think the current set-up offers a good risk/reward ratio. 20-PAM-02 Opening Date: July 27, 2020 Expiration Date: September 18, 2020 DTE: 53 IV: 76.42% IV Percentile: 42% Odds of Winning: 77.87%% Odds of Losing: 22.13%% Win: > 9.60 @ Expiration Loss: < 9.60 @ Expiration Reg-T Margin: $290 Chart Legend Green Area: 100% Win Zone. If we finish above or in the green area, we keep 100% of our initial credit. The size of the green area is the size of credit (our maximum win). Yellow Area: Danger Zone: We still win, but we have to give back some of the initial credit taken in. Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss. 1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included.
NYSE:PAMLong
by OptionsCoach
Short Options Trading: ENPH Buy Put $12.50 Exp: 8/16Understanding The trade: As an options trader my goal is to identify trend change and utilize a breakout strategy to leverage profit off of major trend changes with minimal risk. Even though this contract does not expire till 8/16 I will be looking to take profit by late July as the rate of decay factor starts to come into play as the contract approaches expiry. This should correlate nicely with the Fib Retracement lvl .618. If you have any questions, please feel free to comment below and follow. Thank you and trade safe. Reasons For Trade: • Rejection off the ATH of $18.00 Back in Sep 14’ • RSI Broken upward channel (1D chart Jan 1st -July 2-tj) • RSI Overbought > 70 Trade Parameters: • Broker: Robinhood • Cost For Entry: Free • Contracts: 3 • Entry Price: .45 • Risk: $135 • Reward: $135 • ROI: 100% • Risk/Reward Ratio: 1:1
NASDAQ:ENPHShort
by BradenH
Short Options Trading: AIMC Buy Put $33 Exp: 7/19 Understanding The trade: As an options trader my goal is to identify trend change and utilize a breakout strategy to leverage profit off of major trend changes with minimal risk. Even though this contract does not expire till 7/19 I will be looking to take profit by early July as the rate of decay factor starts to come into play as the contract approaches expiry. This should correlate nicely with the Fib Retracement lvl 5. If you have any questions, please feel free to comment below and follow. Thank you and trade safe. Reasons For Trade: • Rejection off the May 19th high of 37~38 lvl • Broken upward channel (1D chart May 23rd -June 21st) • RSI Rejection of 2 previous highs Trade Parameters: • Broker: Robinhood • Cost For Entry: Free • Contracts: 4 • Entry Price: .2875 • Risk: $115 • Reward: $115 • ROI: 100% • Risk/Reward Ratio: 1:1
AShort
by BradenH
LONG Options Trading: AMD Buy Call $32 Exp: 7/19Understanding The trade: As an options trader my goal is to identify trend change and utilize a breakout strategy to leverage profit off of major trend changes with minimal risk. Even though this contract does not expire till 7/19 I will be looking to take profit by early July as the rate of decay factor starts to come into play as the contract approaches expiry. This should correlate nicely with the Fib Expansion lvl .618. If you have any questions, please feel free to comment below and follow. Thank you and trade safe. Reasons For Trade: • Continuation of the 4th leg for A B • Support on Upward channel (1D chart Nov 17st - Current) • Crypto at yearly high (More miners for AMD Graphics Card) • Fib Expansion .618 correlation Trade Parameters: • Broker: Robinhood • Cost For Entry: Free • Contracts: 5 • Entry Price: .50 • Risk: $250 • Reward: $100 • ROI: 40% • Risk/Reward Ratio: 5:2
NASDAQ:AMDLong
by BradenH
3
LONG Options Trading: BNK Mellon(BK) Buy Call $45.50 Exp: 7/19Understanding The trade: As an options trader my goal is to identify trend change and utilize a breakout strategy to leverage profit off of major trend changes with minimal risk. Even though this contract does not expire till 7/19 I will be looking to take profit by early July as the rate of decay factor starts to come into play as the contract approaches expiry. This should correlate nicely with the Fib Retracement lvl.236. If you have any questions, please feel free to comment below and follow. Thank you and trade safe. Reasons For Trade: • Bounced off the May 31st low of 42~43 lvl • Broken downward channel (1D chart Jan 17st -June 3rd) • Broken RSI Channel • RSI Overbought > 30 Trade Parameters: • Broker: Robinhood • Cost For Entry: Free • Contracts: 2 • Entry Price: .44 • Risk: $88 • Reward: $88 • ROI: 100% • Risk/Reward Ratio: 1:1
NYSE:BKLong
by BradenH
Vomiting Camel pattern. This thing could really plummet. Albeit lazily drawn, I present the dreaded “vomiting camel” pattern. I’m not making this shit up. There’s actually a pattern you can look for that is a serious fucking bear when you do. It’s got this ridiculous name for obvious reasons, but here it is and I’ve decided on the 4/46 long put, 17 strike. It cost .66 and is at .69 as of 1053am 4/12. I’m not going to get chased away from this one too quickly as it has potential to really plummet. If it goes sideways I’ll look to roll this one.
NYSE:XShort
by Incogniteaux
3
Constantinople - Round 2: ATM ETH CallsOn January 4th, we wrote a speculative trade piece for the January 16th Constantinople Fork. Today we will aim to replicate those trade ideas for the second attempt of the Constantinople Fork Implementation. According to the core developers, the fork will become effective on block number 7,280,000, which should occur on Feb 27th. When looking for opportunities in price movements on a SHORT-TERM thesis, one can use options to get long GAMMA, which essentially allows a trader to get highly leveraged exposure at a low-cost premium. Below is BitOoda’s Option Run, courtesy of KRM22’s ProOpticus software. This tool is an effective way for us to keep track of option values, and calculate the Greek’s that would be associated with any options structure priced up for our clients. When exploring opportunities for high GAMMA option plays, we shall look towards the March (3/29/19) options contracts, located in the left most column above. As you can see, the March $125 Straddle is worth ~$30. With the previous build-up, and ensuing let down of the first attempt at the Constantinople fork, we saw a price selloff from ~$155 to ~115 by the time the January options expired. The January $150 Straddle when we wrote our first Morning Report was also ~$30. This trade was a small winner (profited $5 from $30 premium = 16.67% ROI). We also recommended buying outright At-The-Money Calls or Puts if you had a conviction on price direction. As we saw, the Puts were spectacular, and the Calls were losers. For this second attempt at the Constantinople Fork, the core developers believe this round will go off without a hitch. If you believe in what they are saying, then buying At-The Money Calls would be your best options strategy here. If you have been following our Vol updates over the last few weeks, BTC vol has been extremely suppressed due to the lack of realized volatility in the space. The implied volatility (option values) should act similarly in ETH vol terms. The ETH H (3/29/19) $125 Call is worth roughly $12. If you can buy at the calls at this price, that would give you a break even up to $137. Viewing this ETH chart, we feel as though it is just ‘air’ up to ~$150. In other words, we don’t believe we shall see any RESISTANCE until that level as a rally could easily gap to that price. A Forking event in any protocol has taught us one thing; uncertainty and price volatility are sure to follow. Let’s use our past experiences and observations to take advantage of these opportunities for some speculative profits in a low-risk, high-reward manner.
COINBASE:ETHUSDLong
by BitOoda_LLC