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Let's Trade Options

  • #18,301
  • Dec 1, 2022 10:01pm Dec 1, 2022 10:01pm
Quoting The Fool
+++ adjusting the trades above early Thurs, likely roll up the Dec5 3900/3875 bull puts (not Dec2 as is shown) to Dec5 3950/3925 for additional $1 net credit, m/l, will then spend all of that on some Dec2/5 3940 put calendars and also maybe some Dec7 3900/3800 bear vert puts. I am bullish but I always roll bidirectional, want to give myself a chance either end, always.
managing today, bot out the bull put verts for 25c debit; bot Dec2/5 3950 calendar puts for $1.05. I expect a pullback on a positive NFP beat, but we'll see...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,302
  • Dec 2, 2022 7:41am Dec 2, 2022 7:41am
Good call on NFP! Pullback in progress.
  • #18,303
  • Dec 5, 2022 9:30pm Dec 5, 2022 9:30pm
Combos for the FOMC-to-Xmas run. 5*$5.90 on the SPX IC = $29.50. Less 8*$2.20 for bear put verts ($1,760) leaves $1,190. SPY Dec16/23 415 calendar calls, 50 *$0.25 ($1,250)....the SPY calendar calls on Dec14 will cover all the IC calls tail, te SPX 12/16 bear vert puts does the same. Should be a risk free trade. 50 lots SPY calendar calls could pay well, especially if they get to run. That's my expectation. I will add 2-3 units to the IC if there is movement to the upside.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,304
  • Dec 6, 2022 1:16am Dec 6, 2022 1:16am
Quoting The Fool
Combos for the FOMC-to-Xmas run.
...similar setup with Dec14 RUT IC funding otm RUT verts +2 dte and calendars in IWM @ Dec 14/23. Same old mo, the funding trades get hedged & then the hedging trades are left on to profit bigly. Maybe I'll post some graphs....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,305
  • Dec 8, 2022 1:12am Dec 8, 2022 1:12am
RUT / IWM combo trades for the FOMC/CPI, trades put on Mon-Tues, set to catch moves off the data next week, could be the last good event trade of the year. Trades are actual size. RUT IC funds the RUT vert and IWM dbl calendar, which guard the tails of the IC and, if they live through that, will be set to catch some movement post-FOMC. The markets have devolved into a lot of sideways low-volume pa, showing there is no certainty about future movements and trades are just set to move off whatever the Fed and the Fed's favored data present. Pretty predictable. Predictable in the sense that these Fed/data events mark future times for market moves, usually, and that's kind of a gift. That said, I don't have any conviction that there will be big moves next week. I kind of lean towards a bullish breakout to SPX 4,100+ to close the year, but the bearish break below 3,800 is a good possibility, also. So I shoot both ways & hope for something good.
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The IWM calendars are 8-days wide, I will let an itm side run into the long options that remains after the short options expires, if possible, would be sweet to catch a bit of trend...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,306
  • Dec 8, 2022 1:42am Dec 8, 2022 1:42am
The RUT trades...as it stands I have not bot RUT Dec19 vert bear puts, but will look to do so. Note the IWM 196 call calendars fills the dip in the P/L on Dec 14 between the IC and the bull vert calls. The IWM 168 puts calendar will do the same for something like RUT Dec19 1705/1680....but need to get in the latter for <$1, might not get it, but I will hunt for it up til next Monday. If the IC gets to max yield, the call and put verticals could pay well on trending price post-FOMC....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,307
  • Dec 8, 2022 12:15pm Dec 8, 2022 12:15pm
...still playing the Fed game, market will be swinging on the PPI/CPI, and FOMC, over the next few trading days. If we get shrinking PPI Friday, we could rally back to near the 200d SMA, near 4000. Then with another lower CPI and some dovish words from JPow, I could see 4100+ happening next week. Ideally for my trades above, a rally goes close to the short calls in my SPX and RUT ICs, but safely below it, the Dec14 close.....hot inflation numbers and a hawkish FOMC will crash SPX down below 3,850 easily next week. I wait.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,308
  • Dec 9, 2022 12:56pm Dec 9, 2022 12:56pm
Quoting The Fool
The RUT trades...as it stands I have not bot RUT Dec19 vert bear puts, but will look to do so. Note the IWM 196 call calendars fills the dip in the P/L on Dec 14 between the IC and the bull vert calls. The IWM 168 puts calendar will do the same for something like RUT Dec19 1705/1680....but need to get in the latter for <$1, might not get it, but I will hunt for it up til next Monday. If the IC gets to max yield, the call and put verticals could pay well on trending price post-FOMC....
....Managing....buying back the short leg of the IWM calendar for 2 cents, will leave 50x long Dec23 196 calls @ 29c debit...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,309
  • Dec 9, 2022 2:10pm Dec 9, 2022 2:10pm
sideways market, swinging around 3,950 since early May, but I think it will see 4,200 before it sees 3,700....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,310
  • Dec 12, 2022 1:33am Dec 12, 2022 1:33am
Quoting The Fool
........hot inflation numbers and a hawkish FOMC will crash SPX down below 3,850 easily next week. I wait.
If we continue to pin 3,950, I will be looking to buy back all IC sides late Monday or early Tuesday. Will buy back short legs of all calendars if they get cheap. I'd like to have all the long options I can afford by FOMC day, b4 the show. I think the larger move wants to be north, but also it seems inflation data is not cooperating for bulls. Prolly will come down to what JPOW says late Tues.....so I'm on the fence, still leaning very slightly bullish.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,311
  • Dec 13, 2022 12:46am Dec 13, 2022 12:46am
I was surprised at bull action today, & anybody would be ok to yell "bull trap", but we will see continuation if the CPI print is low enough. I will wait to see and be ready to roll the 4125/4150 side of the SPX IC up to 4,175/4,200 if that makes sense. Everything else is ok and/or prolly too far otm to be a concern.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,312
  • Dec 13, 2022 10:26am Dec 13, 2022 10:26am
ROLLING lots of IC sides, mostly for added credit; may use some of that to roll out the Dec14 SPX 4125/4150 calls, but prolly let that side slide into Dec14 and pick up the steep theta. If all I do is cash out the IC's, I'll have a net gain on all trades, but the real potential of the combos comes in after the FOMC is done, and maybe we see a nice rally straight into Xmas....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,313
  • Dec 13, 2022 10:29am Dec 13, 2022 10:29am
Quoting The Fool
{quote}If we continue to pin 3,950, I will be looking to buy back all IC sides late Monday or early Tuesday. Will buy back short legs of all calendars if they get cheap. I'd like to have all the long options I can afford by FOMC day, b4 the show. I think the larger move wants to be north, but also it seems inflation data is not cooperating for bulls. Prolly will come down to what JPOW says late Tues.....so I'm on the fence, still leaning very slightly bullish.
....rolling with 1 dte is ok also when there are such large moves, giving space to do that on the put side in this case. Good thing about FOMC day is you have lots of time in the AM to do adjustments before the show.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,314
  • Dec 13, 2022 11:27am Dec 13, 2022 11:27am
wild stuff, but if JPow leaves off the hawk, we can rally > 4,100 to close the week.....(unless TSLA continues crashing....)

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,315
  • Edited 9:07pm Dec 13, 2022 8:46pm | Edited 9:07pm
Quoting The Fool
wild stuff, but if JPow leaves off the hawk, we can rally > 4,100 to close the week.....(unless TSLA continues crashing....) {image}
Merry HoHo. I am looking for 3 consecutive green weekly SPX dingdongs to close 2022. This week high, 4,165; next week high, 4,300; week of 12/26 and December high, 4,390. I need my SPY Dec23 $415 calls to run into next week and go at least $10 itm, and sell out for about $12 a pop. C'mon Santa.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,316
  • Dec 13, 2022 9:05pm Dec 13, 2022 9:05pm
same fantasy for RUT/IWM, where I have 50x IWM Dec14/23 $196 calendar calls & 50x outright long Dec23 $196 calls. I am looking for $187 this week's high, and maybe just maybe $200 by next Wed/Fri, which will get me max $4/ea.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,317
  • Dec 13, 2022 9:37pm Dec 13, 2022 9:37pm
IF bull dream comes to pass, iv's will drain, but you can still put on good 0-risk trades....

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,318
  • Dec 13, 2022 9:57pm Dec 13, 2022 9:57pm
XSP is another euro style option, it's 1/10 the size of SPX. Can be used to fine tune combo trades with SPX, volume not nearly as good as SPX, but it's ok at the round handles.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,319
  • Dec 14, 2022 11:48pm Dec 14, 2022 11:48pm
I dreamed a dream....that we could get out of the 3950-4050 chop box. ....silly me.....

(..note: Susan Boyle's debut "I Dreamed a Dream" album is one of the best-selling albums of the 21st century.)

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,320
  • Dec 15, 2022 1:41pm Dec 15, 2022 1:41pm
...all I have left with any promise is Dec23 IWM $168 long puts. If the markets are finally getting on the same page as the Fed, we should see some continuous selling, with the previous lows of the year (Oct lows) tested or surpassed, sometime within the next month. Why buy stocks when all the CBs of the world are trying to engineer a recession? The small caps especially should be crashing under the realization that interest rates are going to remain high for months to come. So, inevitable BTFD should be shelved until the Fed sends some dovish sounds. But I'll believe it when I see it.

Low targets for Dec-Jan: RUT - 1575; SPX - 3385.....

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"If The Fool persists in his Folly he will become wise." - William Blake
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