Wang’s Happy Trading

Those members who are in the Trading Room, and get to converse with me on a daily basis, know that I’m on vacation this week.  For some inexplacable, yet very "happy" reason, I seem to always trade exceptionally well while on vacation.  Needless to say, I’m trading lightly.  Yet, so far, they are all winners (trades with +50% or higher gains are highlighted):

January 07, 2010
09:24 | HappyTrading ESI ($101.40) Sold to Close ENJAS Jan 95 calls, at $7.00 +122%
08:20 | HappyTrading ESI ($100.30) Sold to Close ESIJB Jan 95 calls, at $6.00 +90% 

January 06, 2010
07:34 | HappyTrading WLT ($81.10) Sold to Close WLTAO Jan 75 calls, at $6.70 +56%
07:25 | HappyTrading FSLR ($139.60) Sold to Close QHBAG Jan 135 calls, at $7.60 +28%
07:23 | HappyTrading CF ($95.00) Sold to Close CFAR Jan 90 calls, at $6.00 +12%

January 05, 2010
08:03 | HappyTrading WLT ($82.70) Sold to Close WLTAO Jan 75 calls, at $8.20 +91%
07:45 | HappyTrading WLT ($82.40) Sold to Close WLTAO Jan 75 calls, at $7.90 +84%
07:37 | HappyTrading WLT ($81.80) Sold to Close WLTAO Jan 75 calls, at $7.30 +70%
07:36 | HappyTrading FSLR ($140.00) Sold to Close QHBAG Jan 135 calls, at $7.60 +29%

Both the WLT and ESI trades were opened just this week, and were both overnight (1-day) huge gainers.  The WLT trade was opened on Monday 1/4/2010:
January 04, 2010
07:21 | HappyTrading WLT ($77.90) Bought to Open WLTAO Jan 75 calls, at $4.30

These were cashed mostly out the next day on 1/5/2010, for gains as high as +91%.

The ESI trade was opened just yesterday:
January 07, 2010
09:24 | HappyTrading ESI ($101.40) Sold to Close ENJAS Jan 95 calls, at $7.00 +122%
08:20 | HappyTrading ESI ($100.30) Sold to Close ESIJB Jan 95 calls, at $6.00 +90%

These were cashed out today with gains as high as +122%!  Since I’m vacationing in Hawaii, everyday, I’ve been doing some "tourist" activities.  Today, I went to do some snorkling and whale-watching.  Right now, it is the season when humpback whales migrate to the region to mate and give birth to the young.  We were very fortunate and did see many, many whales (see pictures).  Perhaps it’s because this is "Happy Trading" and I emphasize to our members to be comfortable with the trades that they make.  While I’m on vacation, I’m definitely even more happy and relaxed; and the "happy trades" naturally turn out great results.

I actually left the last portion of my ESI Jan 95 calls with a limit to sell order at $8.  I didn’t really think it would get filled today.  We got into this trade because of the APOL’s potential good earnings report.  We have locked enough profits to let the last portion run on house money (this is how we normally play "event-driven" plays, such as earnings).  We minimize the risk and maximize the reward potential.  In most cases, we manuever in a way that by the time the "expected event" comes around, our risk is at "zero", which means we are only risking the house money.

Pleasantly surprised, I got back to my hotel and found that the rest of my ESI Jan 95 calls got sold at $8:

I got into this trade at $3.16.  This gives the past portion of this trade a 1-day +153% gain!  These options traded as high as $8.2 today.  After the market, APOL reported better-than-expected earnings, but, its shares traded down 5% as it received a report from the U.S. Department of Education related to the untimely return of federal student loans.  ESI shares were affected slightly, down 1.1% in after-hours.  Since I was not present when my trade got filled, I will publish the closing trade at the opening price tomorrow.

ESI stock has a lot more momentum than APOL.  This is why I chose to play ESI, instead of APOL.  A lot of times, indirectly playing earnings from a company in the same sector can also help reduce the risk.  In addtion, ESI is reporting its earnings on 1/24, Thursday, before the market opens.  This gives us even more "options" to manuever our trades, depending on how APOL reports and how investors reacts.

In my Market Forecast and Sector Watch this weekend, I said, "I think the XLF could tell the true story next week."  Indeed, this whole week, the financials dominated the broader market.  GS has risen $13 since last Wednesday and more than $7 this week alone!  (Every weekend, I write a Market Forecast & Sector Watch article to "browse" through the market to help our readers manage what to expect from the market in the coming week.  I specifically go into sectors and/or "factors" that have the most potential to move the market, whichever way.)  Tomorrow, we have the "all-important" unemployment rate data.  We went into our trades this week with the intention to trade fast and maximize profits before Friday.  We have accomplished that.  We also closed out some lingering trades.  Now, we are back to mostly in cash and ready to react to market’s reaction on the latest jobs reports.

Good night and HappyTrading! ™