AMZN

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An in-depth review of the week's trading and the news that made it happen along with links to more analysis as well as a detailed discussion of how we take advantage of day-trading index options during expiration week - something we are able to do every month of the year!

The markets are moving higher today on the back of solid moves from Alcoa Inc (NYSE: AA), Amazon.com, Inc. (NasdaqGS: AMZN), Intel Corporation (NasdaqGS: INTC) and JP Morgan Chase Co (NYSE: JPM). Volume has started to trail off and is expected to starting around 10:30am ET each day this week.

80% of our trades (60) were successful in the past 2 volatile weeks because we identified and played a range.

With the major indices trading mixed Wednesday, there were many stocks which traded higher on BIG volume. The list described below is a large one which is quite unusual for a rather flat trading day.

In a previous OptionMaestro.com post, I outlined 30 stocks which I wouldn't mind going long at these levels. I wrote about getting long the stocks by using the buy-write option strategy. This is an updated post to that one, adjusting the strikes and prices accordingly for options expiration today.

With the November options expiration approaching us Friday, I thought I would outline some trade ideas on stocks I wouldn't mind going long on, that would return good percentages by Friday (as of market close Friday November 13, 2009). When using the buy/write option strategy, it is important that you are willing to hold the security in case it is below the strike price at options expiration.

As of today the top ten most active stock option contracts were:

1. PowerShares QQQ (NASDAQ:QQQQ) December 40 Put Options
2. S&P 500 SPDR (NYSE:SPY) November 108 Put Options
3. S&P 500 SPDR November 107 Put Options
4. Microsoft (NASDAQ:MSFT) November 30 Call Options

Continue reading at: http://optionmaestro.blogspot.com/2009/10/most-active-stock-options-octo...

So turns out the pessimistic view mentioned yesterday had the upper hand this go around with AMZN earnings. Indeed it was time for another trip to the woodshed for volatility sellers. It's like ISRG from last season all over again. This is the EXACT reaction condor traders use as the rationale for why buying the wings to limit risk is worth the extra commission/slippage and lower reward.

After the bell, Amazon reported a third quarter EPS of $.45. Given that analysts' estimates for EPS was around $.30, it's fair to say AMZN knocked the cover off the ball. Following the announcement traders immediately began aggressively bidding up shares in the after-hours trading session.

In my blog post Monday I listed a few stocks which I would be willing to go long by selling the puts right before the stock reported earnings. If you missed it you can view the details here. As indicated I took positions on Apple (AAPL), Caterpillar (CAT), Texas Instruments (TXN), SanDisk (SNDK), Walter Energy (WLT), and Yahoo!

In my blog post Monday I listed a few stocks which I would be willing to go long by selling the puts right before the stock reported earnings. If you missed it you can view the details here. As indicated I took positions on Apple (AAPL), Caterpillar (CAT), Texas Instruments (TXN), SanDisk (SNDK), Walter Energy (WLT), and Yahoo!

In my blog post Monday I listed a few stocks which I would be willing to go long by selling the puts right before the stock reported earnings. If you missed it you can view the details here. As indicated I took positions on Apple (AAPL), Caterpillar (CAT), Texas Instruments (TXN), SanDisk (SNDK), Walter Energy (WLT), and Yahoo!

Now that we're finally in the homestretch for 2009, it's time to look toward the future and consider those areas that are best poised to be standouts in the fourth quarter and why.

Consumer Spending. While consumer spending remains depressed, a combination of encouraging signs and timing could benefit this sector.

Last week was FANTASTIC and we had 28 winning trades out of 36 with an average gain of 42% on the winners and an average loss of 12% on the losers - now THAT’s A GOOD WEEK.