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 3.4.2013 I saw a Trader buy 7500 STX April 35-38 Bull Call Spread for $.46. I jumped on on board and bought the STX April 35 Calls for $.69 in real-time with real-money. I sold the balance of these for $1.66 today. Then CNBC’s Jon Najarian talked these on the Halftime Report as well. Great Call by him as he only flagged one trade that day. 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 7500 STX April 35-38 Call Spreads for $.47
(Paper is an order from a hedge fund, mutual fund, retail bank, or BIG trader)
Risk: $47 per a lot
Reward: $253
Breakeven: $35.47
Cash Outlay for this Trade: $352,500
Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short
On 3.12.2013, these Call Spread are worth $1.06, so lets breakdown this trades Profits.
$1.06- $.47 * 100 * 7500= $442,500
If a trader risked $1,000 on this trade and bought 52 Options they would have netted $2,300
If a trader risked $5,000 on the trade and bought 260 Options, they would netted $11,500
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.
