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Let's Trade Options

  • #15,761
  • Edited 1:36pm Jul 25, 2018 12:09pm | Edited 1:36pm
Do you think FB will move on earnings? Will it cop at least a 2% move (that'd be around $4) either way?

FB atm booking north to $218+ atm.

An Aug 31 $217.5/$215 bull put vert is about a $1.10 debit; the same date $220/$222.5 call spread is about $1.15. With that much time, maybe make money both sides.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,762
  • Jul 25, 2018 1:17pm Jul 25, 2018 1:17pm
Quoting The Fool
An Aug 31 $217.5/$215 bull put vert is about a $1.10 debit; the same date $220/$222.5 call spread is about $1.15. With that much time, maybe make money both sides.
I filled this exact trade as shown. My intent is to make good on a big move @ one side and try to recoup off weekly diagonal sales over the remaining time on the other side. Ideally, a big move would revert and the remaining vert would go into some recovery or even profit. We'll see.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,763
  • Jul 25, 2018 4:04pm Jul 25, 2018 4:04pm
FB drops ~8% but it likely will not stay down long, so I will have to claw back some profit on the put vert or just let everything ride for a while....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,764
  • Jul 25, 2018 4:28pm Jul 25, 2018 4:28pm
Looking better as FB slides under $180 AH. I prolly put too much time on this, but we shall see....

down she goes and where she sticks is the big question. I gotta believe the shit will bounce though
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,765
  • Jul 25, 2018 4:34pm Jul 25, 2018 4:34pm
Case in point why I rarely sell condors anymore...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,766
  • Jul 25, 2018 4:52pm Jul 25, 2018 4:52pm
holy smokes FB down >24%
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,767
  • Jul 25, 2018 4:58pm Jul 25, 2018 4:58pm
if the FANGs are going to cave like this (NFLX bit it) and the trade war shit keeps up, we should see the spoos slide hard into Jackson Hole....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,768
  • Jul 25, 2018 5:49pm Jul 25, 2018 5:49pm
Quoting The Fool
if the FANGs are going to cave like this (NFLX bit it) and the trade war shit keeps up, we should see the spoos slide hard into Jackson Hole....
Don't even get me started about the October surprise shit waiting to happen. The S&P prolly gonna dip back below 2,000 b4 year end....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,769
  • Jul 25, 2018 6:03pm Jul 25, 2018 6:03pm
Quoting The Fool
Do you think FB will move on earnings? Will it cop at least a 2% move
lol

bet it closes the week back near $200
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,770
  • Jul 26, 2018 8:34am Jul 26, 2018 8:34am
FB down 18% to $177 , . how are you managing your position ?
  • #15,771
  • Edited 9:01am Jul 26, 2018 8:43am | Edited 9:01am
CASHED out deep itm FB put vert for $2.40, against theoretical maxP of $2.50, and against net debit of $2.25 for the combo, so the call vert Aug31 $220/222.5 is a free trade, and I wait for the shares to bounce

.....looking for bargain hunters to get it back towards $200 and I'll take a quick 2 bits and be happy to get out of this experiment in the green. Better timing with a double calendar to set up $180/$220 coulda shoulda woulda paid 10x +
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,772
  • Jul 27, 2018 4:55am Jul 27, 2018 4:55am
I've doing some trades lately with small amount of contracts trying to get an idea of how stocks move and its relation to options. Credit spread I still not understanding the risk/reward ,. specially on OTM strikes.
If I open CMG Sep CALL 500/510 delta=0.11 credit spread , my possible reward is $50 and risk is $950.
Obviously, taking this trade the advantage is the OTM delta 0.11 but still thinking that isn't worthy to open this trade. The close I get to ATM the better R/R.

Straddle is another strategy that I would like to get involve with but I don't get it and even though I read all the basics I still not able to place a trade.

Thanks
  • #15,773
  • Jul 27, 2018 6:06am Jul 27, 2018 6:06am
Which broker do u recommend for options?
  • #15,774
  • Jul 27, 2018 2:12pm Jul 27, 2018 2:12pm
Quoting Spekulant.FM
Which broker do u recommend for options?
..I generally ignore this question, except to say that the only US broker I know of that will accept non-US citizen owned accounts is Interactive Brokers.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,775
  • Jul 27, 2018 2:23pm Jul 27, 2018 2:23pm
Quoting relaxtrading
I've doing some trades lately with small amount of contracts trying to get an idea of how stocks move and its relation to options.
I recommend you dial up the videos on tastyworks and study all the content that you are interested in. Then paper trade the stratgeies - don't be shy, it's just fake money. :oad up $1,000,000 in fake money and put on 20 straddles of different names widths durations etc etc. Then watch and learn. You can not learn to trade options by reading and watching videos only, you must paper trade.

Pay special attention to implied volatity and how it changes over time and with events and its relationship to the greeks.

If you were thinking about selling a CMG call vert right b4 earnings, that was the right idea, as you may know the iv's (and so the valuation of related options) generally rise into the date of the ER and then fall right after.

Yeah sure there's a trade 0ff: if you sell far otm options you don't get much for taking on lots of risk. If you trade options long enough, eventually you will get burned when some of your short options go deep itm and you are forced to buy them back for a large loss. If you're like me, that will be about the time you settle into safer ways to trade...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,776
  • Jul 27, 2018 2:26pm Jul 27, 2018 2:26pm
Quoting relaxtrading
Straddle is another strategy that I would like to get involve with but I don't get it and even though I read all the basics I still not able to place a trade. Thanks
I never or rarely buy outright straddles or strangles. Instead, I trade spreads that will turn into strangles when the front options come off.

Probably over half of the trades I note in the last several hundred pages are examples of the above. I will refresh one that is still running below
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,777
  • Jul 27, 2018 2:43pm Jul 27, 2018 2:43pm
Quoting The Fool
Looking for straight iv rush gain on YUM, ER's Aug3, twin 8/3-8/10 calendars @ $76 and $82 - I am loaded on both at 10c, not wanting to pay more, POF....
So you see I bought this YUM double calendar for 11c per side, about a $0.25 net debit, all told. YUM earnings are on Aug02. I wanted YUM shares to move toward one of the calendar strikes and take the richer calendar off right before the close on Aug02. The iv's of the options will come up, but I could stand to make a profit even if YUM doesn't move much.

A better way to trade calendars at ER's is to sell the option in the week BEFORE the ER and buy the option in the following week. That way, the front options may come off and you are left with a strangle on the back long options, and may catch a big move with one of those on earnings. I waited too late to do that with YUM this time, so tried this approach instead. We'll see how it goes....

The DC is in small profit so far just on the iv rise....
Attached Image (click to enlarge)
Click to Enlarge Name: yum.JPG Size: 69 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15,778
  • Jul 30, 2018 12:10am Jul 30, 2018 12:10am
looks like they spotted you Fool....

https://www.zerohedge.com/news/2018-...emerges-market
Look Sharp/Trade Tight
  • #15,779
  • Jul 30, 2018 12:17am Jul 30, 2018 12:17am
Quoting PayTheLimit
looks like they spotted you Fool.... https://www.zerohedge.com/news/2018-...emerges-market
Losses in the billions..
  • #15,780
  • Jul 30, 2018 6:37am Jul 30, 2018 6:37am
Quoting PayTheLimit
looks like they spotted you Fool.... https://www.zerohedge.com/news/2018-...emerges-market
lol...wish I had that kind of margin to play with...hope all is well with you man
"If The Fool persists in his Folly he will become wise." - William Blake
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