Max Gain

It's a wonderful phrase, really, and the goal amongst all spread traders. Max gain. The illustrious mystical place where all the stars align and your short strike expires worthless. That's what I live for with my spreads. That happy realization of all of my gains. And it can happen every month! Life is good.

I met a man at the airport coming back from Chicago last week who trades spreads, debit mostly. He told me about a couple of his trades, they sounded fine and said that he should be loving life when today arrived. It was then that he told me they were Jan 08's. In the nicest possible way I could I told him he was crazy and to run the numbers for the front month next time, reassuring him multiple times that the return would be almost the same with the ability to do it monthly instead. Silly mortals.

AZO gave me max gain today, as did POT. AMZN gave me the less fun "break even". Bearishness took over and pulled most stocks down today. In a conversation with a friend the following exchange occurred:

Andy says:

I feel that things are going good today even though the markets down a little

Beej says:

That's cuz you're following rules

Beej says:

Good feeling, isn't it?

Andy says:

It's great

I love pull backs, lots of stocks setting up for bounces with our huge earnings week coming next week. My bullish watch list includes ACH & AZC (thanks to the great momentum in mining), CROX, ICE, ONAV, RIMM, TASR, and for the first time in a long time ISRG - what a breakout.

Enjoy your weekend!