Invest and Trade Profitably with Jon Johnson

Education Center

Does a good til cancelled order take more or less precedence over a day order?

August 30, 2000

No. We just prefer day orders on certain types of plays and have no reason to put in a good til cancelled order that we may forget about and get hit at an inopportune time. We were not stating or implying that a day order had more precedence over a GTC. On the other hand, […]

If I am filled at a price that is grossly different from the trades that are being executed at the time my trade is filled, do I have any recourse?

August 30, 2000

There is a process by which an investor can challenge a trade. As we don’t place market orders, we have never challenged a fill at a disparate price. We have, however, challenged the lack of a fill when our order has been entered at the bid or ask and has sat there unexecuted while the […]

I see different option prices on different markets. Can I route an order to a different market?

August 30, 2000

Yes, you can. We tell our brokers to go get the best price they can in whatever market they can. We expect that because we make a lot of trades. We want them out there working it for us. When trading spreads, however, it is hard to ‘mix and match’ one ask on one market […]

Where can I find out about up volume versus down volume on the web?

August 30, 2000

Yahoo!Finance has a ‘market digest’ link that shows up and down volume for the major averages. Go to www.quote.com and look for the button.

Would you comment on your method of using the 10 and 18 day moving averages and using them to determine entry points?

August 30, 2000

When a good stock is moving up in a solid rally, we have found that the 10 and 18 day moving averages often act as support on the move. Many commentators like to use the 50 day moving average, and if a stock uses that level as its support, that is not a bad idea. […]

What is a good site to find charts with 10 day and 18 day moving averages?

August 30, 2000

We have not found the ultimate free charting site on the web. We use www.bigcharts.com in our reports to illustrate moves on the averages and some individual charts because it is easy to use. Problem is, it can only show you one moving average. www.investertech.com allows you to run three moving averages at once, and […]

Do volume spikes indicate institutional buying?

August 30, 2000

They very well could, particularly if the spikes are in the millions of shares range. Institutions (mutual funds, insurance companies and the like) usually like to buy as discretely as possible, something that is easier to do when a stock has a large float. When good news hits a stock or other factors work to […]

Can you give an example of rolling out a put to the next month?

August 30, 2000

We can use one we almost just did. We had some spreads on LU with December (1999) 80 puts as the leg we sold. The last few days before expiration the stock was faltering, having a hard time breaking above 78. We were coming down to the wire, and on the last day of the […]

You use the term ‘pullback’ in your reports. What does that mean?

August 30, 2000

When a stock sells back after a run on lower volume, we refer to that as a pullback. Pullbacks are a natural and healthy part of a move up. Stocks cannot continue to move up without stepping back and taking a rest. It is important that it occur on lower volume-that shows orderly profit taking […]

What are the advantages of writing (selling) versus buying a call?

August 30, 2000

You have seen on some plays we like to sell puts, on some we like to buy calls, and on some we do both. Given that, it is clear that writing puts and buying calls are strategies that both anticipate a rise in the stock. Each has advantages and disadvantages. We like writing puts. For […]

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