27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Nic Chahine was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET.
Create Income With Options Spreads Author Nic Chahine said that Alibaba Group Holding Ltd (NYSE: BABA) is a "coin flip" into earnings, but noted that there are technical levels that could draw action in the stock.
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In early Tuesday trading, one of those levels -- $78 -- is being tested.
Chahine pointed at $80 and $81 as prices that may draw action, calling it a "tug of war" between the two levels. If the stock moves above $81, he said that additional resistance will be seen at the $85 level. In fact, that resistance may look like a "wall" for bullish traders.
Chahine said he was inclined to play Alibaba from the long side, but added that he is no longer confident that will be the right play in the long term.
This comes as he previously thought Alibaba at these levels "would be a gimme."
"My feelings are hurt with Alibaba," Chahine added.
As with all earnings plays, Chahine mentioned that Alibaba's movements following earnings are not predictable. He added that he's not sure whether Alibaba CEO Jack Ma will speak in public and, if he does, how the market will react.
Regardless of whether it's through Jack Ma or someone else, Chahine said he is interested in "hearing about all the ‘fraud' issues," which he said have seemingly scared off investors.
Alibaba is trading 2.4 percent lower on Tuesday, down to $78.68. This year, the stock has shed a quarter of its value and is now well below its $120 high from November 2014.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.