Sometimes, I miss trades, because I am at a meeting, on the phone or
away from my desk. Every morning when I wake up the first thing I do
is turn on CNBC. I watch to see the stocks that are moving in
pre-market trading. On 4.1.2013 I saw a Trader buy 1384 URBN April 39
Calls for $.75. I announced this trade real-money in the BEST LIVE
Trading Room. This was the biggest order over the last 10 trading
days. Let me show a breakdown of how much money this trader made.
Paper bought 1380 URBN April 39 Call Spreads for $0.75 (Paper is an order from a hedge fund, mutual fund, retail bank, or BIG trader)
Risk: $75 per a lot
Reward: if implied volatility unchanged, these Calls will be worth $1.60 rough;
Breakeven: $39.75
Cash Outlay for this Trade: $103,800
Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short
On 4.2.2013, these Call Spread will be worth around $1.60, so lets
breakdown this trade’s profits:
$1.60- $.75 * 100 * 1384= $117,600
If a trader risked $1,000 on this trade and bought 12 options they
would have netted $1,020.
If a trader risked $5,000 on the trade and bought 60 options, they
would netted $5,100.
This is just another example of trading with the BIG money and Hedge
funds in the BEST Live Trading Room http://bit.ly/108XTgh as I
breakdown over 2,000 trades in a day and also tweet them on our
Premium Twitter feed http://bit.ly/WmtfI4
By the way, SEC leave those HNZ traders alone.
—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com