This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Quick Take: Keene on the Market

NEW YORK ( TheStreet) -- Andrew Keene, of Keene on the Market, was with TheStreet's Lindsey Bell, discussing his new book on trading options.

Keene, who was a market maker in Chicago for 11 years, now trades on a computer away from the floor, just like most traders these days. His book is tailored to help individuals go from beginner to a one-man hedge fund, as he did.

He said that he essentially uses two strategies: unusual options activity and earnings plays. The second strategy is more obvious, where Keene uses an array of options -- such as calendar spreads, condors, call-and-put butterflies, etc. -- to pick his moves ahead of a company's earnings announcement.

The other strategy investigates whether options activity is unusual, typically based on of the size of the order.

For instance, when large orders flow into the market, Keene seeks to decipher which institution or big-money player is making them. He watches roughly 2,000 of these trades placed each day, and acts on about five.

He mentioned two of these recent trades, Mosaic (MOS - Get Report) and American Eagle Outfitters (AEO - Get Report), which have generated between 500% and 600% returns.

Although many tips can be found in his book, Keene on the Market, he said that traders could take the at-the-money call price and add it to the at-the-money put price for earnings plays. The combined price is the implied move that the market expects the stock to make after results are reported.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AEO $14.31 0.00%
MOS $27.99 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs