XLF long call + daily breakout
Updated
Yesterday, I opened a few positions in the 3x financial bulls etf symbol "FAS" as I though it was at a better value than technology. To my surprise, the banks exploded higher in making a new daily high. With this new high, I believe the financial banks will begin to perform better and attempt to reach all time highs. I bought the January 18th long call option strike 28 for 1.49$. I believe the XLF stock will reach 30$ and I should be able to sell this option for (.51/1.49)=34.2% gain. I will be interested in locking in some profits with a sell call when the stock is near all time highs. I bought 7 contracts, so I am risking 1,043$ and looking to make atleast 250$ up to 340$.
Note
this was interesting trade where you can say that I got lucky. I put this trade on September 19th, and the stock jumped up on September 20th. I usually hold trades for typically a week, but something in my gut told me to sell my options. I sold all 7 contracts for 1,085$ which is a profit of (1,085-1,043) = 42$ for 1 day. This is an example of buying the "breakout" and the stock pops for 2 days and then just dies afterward. I've seen these scenario's many times so maybe that's the reason behind my "gut feeling". I don't feel bad about closing trades because there will always be opportunities.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.