How to trade around a core position | Jim Cramer | Mad methods

FRI, JUL 26 20136:40 PM EDT

Here is the link. 

Mad Money host Jim Cramer explains his methods of trading around a core position. “Trading around a core position is an important basic trading strategy that everyone can use, even those of you who find the notion of trading, as opposed to investing, to be abhorrent,” he says.

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Mad methods

1. New high list pullbacks
2. Insider buying at 52-Wk highs
3. Insider buying - heavy short-interest
4. Trading around a core position

Mad money

Cramer: Knowing how to trade around core position Could be helpful, especially in a crazy market

Sell some when price is high, and buy some when price is low - essence of trade positions

Trading is something for profit for short term fluctuations 

Using Google as an example - long term, volatile 

Do not buy all at once - tech bubble burst once

Commission will eat profit - 

Favor with disciplined players 

100 shares of Google, 5% up sell 25 shares, either direction works as well

Nothing is changed in fundamental - 

Not exciting - watch the stock - add more example - 

Too much on the table

Too little on the table 

Basically strategy 

next level - two chapters - Get back to the even - using option as strategy 

• Find a stock to trade 
• Add incrementally and sell decreamentally 
• Trade core position - commission should be considered as well
• Option as strategy - alternative 
• Call option - cheaper - Jim Cramer - Hedge fund - add up over the time

Have some disciplines - Trade - A lot of small gains - hedge fund - add up over the time

Using Google as an example 

Take some off when too much on the table

Add some more when stock is low and will go up 

Stock replacement - using call - high price stock like Google stock

Bottom line - Add up over time