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Let's Trade Options

  • #17,101
  • Jan 30, 2020 9:38am Jan 30, 2020 9:38am
I like Washington, a little too drizzly, but beautiful. I used to live in Bremerton back in the early 80's (ex is from there). Lots of stuff to do. Used to love going to Vancouver or just taking the ferry over to Seattle and walking around Pike Place Market snacking on stuff. I remember one day we took the kids to a place called Secret Beach, which was a Nature Conservancy Sand Dollar Preserve....caught lots of different critters that morning and then went to Mt. Rainer and had a snowball fight that evening....that was 20+years ago and they still talk about it!!

My two trades (CAT and AEP) are a little out of the norm for me, as I normally don't trade on a stock that has earnings coming out that week, and I usually stay away from energy stocks because of all the variables. So my confidence level isn't where it normally is, but I thought I'd give them a shot anyway.

My indicators don't show a clear direction or SPX or DJIA, just sorta right in the middle for daily, weekly and monthly charts, so I wouldn't be surprised if it jumps around with any news or earnings of any magnitude. Several stocks are showing they are getting ready for a move up, though, but not quite yet....
  • #17,102
  • Jan 30, 2020 1:27pm Jan 30, 2020 1:27pm
Quoting The Fool
I see the spoos is down >0.5% in Asia, what I'm looking for. I want to sell some SPY puts against the $218's I bought near today's close.... ....
...sold Feb5 SPY $218 puts for $1.38, calendar for credit, we'll see what the news brings next week...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,103
  • Jan 30, 2020 1:33pm Jan 30, 2020 1:33pm
Added to the following:

CAT Feb7 139 CALL @ $1.45 for an average of $1.87

That's it, 40 contracts is enough. Chart just looks really good, hope I don't get screwed by earnings Friday morning!!….
  • #17,104
  • Jan 30, 2020 3:17pm Jan 30, 2020 3:17pm
Added to the following SECONDS before the close:

AEP Feb20 100 PUT @ $0.50 for an average of $0.65

I had to add some more because now the Daily AND Weekly charts are looking for a nice move down. Or at least nice enough to make some decent money. Probably won't make it back to below $100, most likely just to ~$101, but just heading in that direction should be good for a few bucks.....
  • #17,105
  • Jan 31, 2020 1:41pm Jan 31, 2020 1:41pm
Quoting The Fool
...sold Feb5 SPY $218 puts for $1.38, calendar for credit, we'll see what the news brings next week...
...gimme a sell-off into the close and I will be a bear believer. Feb5 $218 puts selling for ~$1.60 today.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,106
  • Jan 31, 2020 1:45pm Jan 31, 2020 1:45pm
Quoting moneymaker2
Added to the following: CAT Feb7 139 CALL @ $1.45 for an average of $1.87 That's it, 40 contracts is enough. Chart just looks really good, hope I don't get screwed by earnings Friday morning!!….
....we're sorry for your loss...using chart analysis for trading stocks around earnings is a very dicey proposition, not to mention the iv's (and options values) will crash immediately after the ER anyway, regardless of which way the share price goes.

But you know this....sorry to rub it in....just a brief PSA....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,107
  • Edited 9:57pm Jan 31, 2020 4:20pm | Edited 9:57pm
Quoting The Fool
{quote}....we're sorry for your loss...using chart analysis for trading stocks around earnings is a very dicey proposition, not to mention the iv's (and options values) will crash immediately after the ER anyway, regardless of which way the share price goes. But you know this....sorry to rub it in....just a brief PSA....
Amen, brother! That's why I normally don't do this, for those exact reasons. With that being said, do you know what I did before the close?.…....

Added to the following:


CAT Feb7 139 CALL @ $0.15, which brings the average down to $0.44


I figured for an additional $3K, I could drop my average for $1.87 down to $0.44, so that gets me closer to my breakeven than at $1.87. The daily charts still looks good and now the weekly chart looks good with the entire candle basically outside the lower BB, which is normally a good sign....the market itself may get a pop before expiration as the impeachment winds down....


But you are right, technical and earnings normally don't mix......

  • #17,108
  • Edited 4:35am Feb 4, 2020 2:24am | Edited 4:35am
SP futures up >30 overnight, btfd 4 ever & 4 ever.....

...or until the $71bio PBOC injection wears off...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,109
  • Feb 5, 2020 11:03am Feb 5, 2020 11:03am
Quoting moneymaker2
{quote} Added to the following: CAT Feb7 139 CALL @ $0.15, which brings the average down to $0.44 I figured for an additional $3K, I could drop my average for $1.87 down to $0.44, so that gets me closer to my breakeven than at $1.87. The daily charts still looks good and now the weekly chart looks good with the entire candle basically outside the lower BB, which is normally a good sign....the market itself may get a pop before expiration as the impeachment winds down.... But you are right, technical and earnings normally don't mix......
Out of the following:

CAT Feb7 139 CALL @ $0.50 up from $0.44

Nice little move at the open, glad it moved up for a few 5 minute periods, otherwise the bid never would have caught up. I didn't make much but it is much better than losing at $1.87 break even!! It will probably head up towards $139 before Friday so the potential is there to make more, but like they say, "Never lick a gift horse in the mouth!"....
  • #17,110
  • Feb 5, 2020 11:09am Feb 5, 2020 11:09am
Out of the following:

AEP Feb20 100 PUT @ $0.70 up from $0.65

Still looks good on the weekly chart, but it just bounced off the 10EMA on the Daily and the indicators on the Daily indicate the move down is nearly complete, so it was time to look for something else.....
  • #17,111
  • Feb 5, 2020 1:20pm Feb 5, 2020 1:20pm
It is interesting to watch the time decay and volatility in action when it comes to option prices. The CAT Feb7 139 CALLS moved up steadily at the beginning of the day to the point the bid got up to $0.53 before I quite watching it. The corresponding stock price was up to about $137.20. Then it moved down and then back up and the next time I looked, Bid was at $0.43 and the stock price was $136.99......then a while later Bid was at $0.40 and price was at $137.05.....and it was just at $0.45 with the stock price at the high at $137.30-ish.

Those slow moves, even in the direction you want, may still be losing. In the trade I got out of, the stock price would have to be above $139.44 by expiration for me to break even, but the quick move up this morning (3 days away) allowed for breakeven plus some......

If price just meanders up slowly, the option prices will tank before Friday.
  • #17,112
  • Feb 6, 2020 10:31am Feb 6, 2020 10:31am
I have a bid in for the following:

DIA Feb20 290 PUT @ $1.75

The weekly chart is doing what I call and RSI Divergence, in that a high was made at the upper BB (three weeks ago), and 3-6 candles later the high was reached again, but the value of the second high's RSI does not reach the value of the first high's RSI. I have found on the Daily charts that is a very strong indicator price will drop. On the weekly, it will take a couple of candles, which means the expiration date has to be farther out, unfortunately.

I normally wait until the end of the candle to get in, which would be tomorrow at the close, but life has me doing other things tomorrow.....but maybe I can get a decent price today...
  • #17,113
  • Feb 6, 2020 11:00am Feb 6, 2020 11:00am
Quoting moneymaker2
I have a bid in for the following: DIA Feb20 290 PUT @ $1.75 The weekly chart is doing what I call and RSI Divergence, in that a high was made at the upper BB (three weeks ago), and 3-6 candles later the high was reached again, but the value of the second high's RSI does not reach the value of the first high's RSI. I have found on the Daily charts that is a very strong indicator price will drop. On the weekly, it will take a couple of candles, which means the expiration date has to be farther out, unfortunately. I normally wait until the end of...
Cancelled that bid and just got into the following:

DIA Feb20 292 PUT @ $2.57

As it was drifting down, I figured for another ~$0.60 (since $1.95 bid on the 290), I could get a $2 better strike price. Initial price target would be just under $290 at the 5EMA....
  • #17,114
  • Feb 10, 2020 8:44am Feb 10, 2020 8:44am
Quoting moneymaker2
{quote} Cancelled that bid and just got into the following: DIA Feb20 292 PUT @ $2.57 As it was drifting down, I figured for another ~$0.60 (since $1.95 bid on the 290), I could get a $2 better strike price. Initial price target would be just under $290 at the 5EMA....
Out of the following:

DIA Feb20 282 PUY @ $3.95 up from $2.57

Will probably meander down this week, but I took advantage of the gap down right at the open.....had to hit the bid to do it, though....
  • #17,115
  • Feb 11, 2020 3:08pm Feb 11, 2020 3:08pm
SPOOS so stretched omg when will the bull ever die? I bot a Feb21/24 SPY diag calls $242.5/243 for one cent, other end I'm trying to leg in to SPY put spreads, bot SPY Feb24 $325 puts for 67c
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,116
  • Feb 12, 2020 2:28pm Feb 12, 2020 2:28pm
In the following:

DIA Feb20 295 PUT @ $2.10

Should drop some this week enough to make a profit. Nothing else seems to be ready by my charts, so I'll just play with this until something breaks open....
  • #17,117
  • Feb 13, 2020 1:14am Feb 13, 2020 1:14am
Fear then panic will set in if the virus starts to spread much more, and especially if that happens outside of China. If 60% of the world population gets infected, that could mean >50 million dead. SnP could drop more than 20% in a few weeks....

Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,118
  • Feb 13, 2020 1:55am Feb 13, 2020 1:55am
Thank you for the information. I am a new trader. I hope I can learn many more from here.
  • #17,119
  • Feb 13, 2020 10:24am Feb 13, 2020 10:24am
Quoting moneymaker2
In the following: DIA Feb20 295 PUT @ $2.10 Should drop some this week enough to make a profit. Nothing else seems to be ready by my charts, so I'll just play with this until something breaks open....
Out of the following:

DIA Feb20 295 PUT @ $3.10 up from $2.10

Not a killer amount, but ~50% return isn't too bad, either.

If it moves back up to close to flat again, I will probably get into it again.....
  • #17,120
  • Feb 13, 2020 10:54am Feb 13, 2020 10:54am
In the following:

DIA Feb20 295 PUT @ $2.20
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