Monday, October 23, 2006

Google options, Part II

Call me masochistic, but I went back and daytraded some Google calls again. The first time I tried it I lost a big chunk of change. But this time the trade happens to go my way, and I made up for the previous loss in Google calls and then some.
What was very different this time was that there was a clear move to the upside in GOOG stock this morning. Because the options move was way bigger than the move of the underlying stock itself, I had to pull up 2 separate charts, one for the calls that I bought (Nov 480 @ $8.40), and one for GOOG stock. Starting from the opening bell, the stock went from $461 to $469, about a $8 move in the opening 25min. That's an unusually big move even for GOOG stock, so when something like that happens, buying call options will magnify that move.
It's pretty crazy, but one big win like this can make you feel emotional and even somewhat overconfident. As a result, I won't trade for the rest of the day (except may scalp some of the canadian stocks if I feel emotionally up to it).
I remember RMBS had a similar big move earlier this year, and I bought the stock at the time, but saw the call options jump up really big time.

But in general, looking for these kinds of big moves in a stock is even harder than looking for those dummy setups. If it weren't for my obsession with GOOG, I probably wouldn't have even known to stalk it for this opportunity.

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