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Let's Trade Options

  • #17,301
  • Mar 9, 2020 4:56pm Mar 9, 2020 4:56pm
Italy announces entire country under quarantine.

Not bullish.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,302
  • Mar 9, 2020 5:06pm Mar 9, 2020 5:06pm
Quoting The Fool
Italy announces entire country under quarantine. Not bullish.
Tomorrow'a first limit down is 2,550.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,303
  • Mar 9, 2020 5:19pm Mar 9, 2020 5:19pm
Quoting The Fool
I am closing call spreads in SPY and SPX that are miles put of the money (SPX 3200/3205 diag Mar13/Mar16, for instance) and making small profit on them, simply because the iv's have jacked so high. Done the same with TLT put spreads..... I bot a Mar13 SPY put fly for 11c - $257/260/263. I have gotten into the habit of just paying pennies for options, for good or ill, so flys is what I can afford now...
...closed all Mar11 flys @ $275 for about 3bag today, if I had bit the bullet and paid alot for straight puts last week, I'd be a lot richer now....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,304
  • Mar 9, 2020 7:20pm Mar 9, 2020 7:20pm
I've been asked on some PMs lately, so just for the record, I will trade PUTs on the $VIX periodically. I am actually in one now from right at the close, but I see no need to put it on this thread since it is actually an item that has no real physical properties that you can chart or do any research on. It doesn't obey normal technical analysis and really all you have to remember is that when it is high, it wants to go lower. By the time I would post it, the play would be gone for anyone following, so I just don't bother. I normally only trade a few time per year when the spikes are really big!! If you do try it, always try to split the Bid/Ask, as it is good about doing that. Put in Hail Mary bids and they often get hit because the trading can be pretty "volatile" …..
  • #17,305
  • Mar 9, 2020 8:25pm Mar 9, 2020 8:25pm
YOU are always trading volatility when you're trading options. The problem with short VIX (or UVXY, etc) is the puts will get cheaper as the index share price goes up, because the iv's are shrinking when that happens, sometimes drastically. So, long VIX calls, bought when the index has rallied, is a more straightforward way to go.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,306
  • Mar 9, 2020 8:29pm Mar 9, 2020 8:29pm
/ES rallying after news of fiscal stimulus, up 82 as I look. should I sell some SPX put spreads while the iv's are still jacked?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,307
  • Edited 11:45pm Mar 9, 2020 11:33pm | Edited 11:45pm
Quoting The Fool
YOU are always trading volatility when you're trading options. The problem with short VIX (or UVXY, etc) is the puts will get cheaper as the index share price goes up, because the iv's are shrinking when that happens, sometimes drastically. So, long VIX calls, bought when the index has rallied, is a more straightforward way to go.
Technically, sure, but it certainly has more of an impact trading the way you do that the short term PUTs/CALLs I trade, simply because for my strategy, the price of the underlying is the major factor, then time value...the volatility is basically already priced into the option price, so you either think it is a good trade or you don't and thus pay the price or not. Since the IV is already in the price, it is up to the individual to determine if it is affordable or not. Might be a great trade, but if option price is $7.40, that is too expensive for me, so I just look elsewhere.

As far as VIX, I never purchase CALLs. When it spikes up, I know it will come back down as soon as it can, so I buy PUTs if the price and expiration make it a good play. But I only trade on the large spikes, that's why it is only a few times per year. Granted, this move now is something I have only seen a few times since I've been trading, but regardless, the market does not like volatility like this, and wants to calm down as fast as it can. That being said, I got in the following at the close:

$VIX Mar18 40 PUT @ $2.70

Again, the Hail Mary Bids are often hit at the close......
  • #17,308
  • Mar 9, 2020 11:48pm Mar 9, 2020 11:48pm
that put strike had iv of 197% at the close. You will prolly do well because looks like we will get a bounce tomorrow. But watch what the iv does.

I have had problems just buying UVXY puts, because even though I caught good directional moves, the iv drained so hard the value of the atm option was ultimately less than the otm option I originally bought.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,309
  • Mar 10, 2020 12:43am Mar 10, 2020 12:43am
Looking at oil tanker stocks - if SA is going to ramp up production like they say, the tanker storage carry trade might float those boats.

Look at TK, TNK, FRO, NAT, SFL, DHT, KEX, EURN

lots of oi in the calls in some of those...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,310
  • Mar 10, 2020 8:45am Mar 10, 2020 8:45am
Out of the following:

$VIX Mar18 40 PUT @ $4.80 up from $2.70

Those Hail Mary Bids and Asks are hit sometimes outside the posted Bid/Ask prices. I think it is because of the volume and speed of the options traded....
  • #17,311
  • Mar 10, 2020 8:55am Mar 10, 2020 8:55am
You long yet?

Im pretty heavily loaded with bull call spreads expiring July and August
  • #17,312
  • Mar 10, 2020 9:11am Mar 10, 2020 9:11am
In the following:

SIX Apr17 25 CALL @ $1.30

Should make up for the Mar20 CALLs....don't think they will get to 30 by then.....
  • #17,313
  • Mar 10, 2020 9:16am Mar 10, 2020 9:16am
In the following:

AAN Apr17 40 CALL @ $0.65

Again, should make up for the Mar20 CALLs.....
  • #17,314
  • Mar 10, 2020 9:32am Mar 10, 2020 9:32am
Quoting Pharm0r
You long yet? Im pretty heavily loaded with bull call spreads expiring July and August
Long Twinkies. I am always long and short the spoos. I am long gold. Trying to get long spread on some of the tanker names just above. Long PBR.

I can see a rebound all the way back up to snp 3,400 by June/July, but there will be time to get long for that as the iv's come off on the way up....

Long time no see, I can't quite remember much about you, other than the name.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,315
  • Mar 10, 2020 9:55am Mar 10, 2020 9:55am
Quoting The Fool
I can see a rebound all the way back up to snp 3,400 by June/July, but there will be time to get long for that as the iv's come off on the way up.....
....I have healthy doubts that we have put in a bottom for indices yet. The worst of the virus panic may be yet to come. We could see a proliferation of hard measures like what we now see in Italy. That would have implications for earnings across the board. Next round of earnings is going to be interesting...(late Apr/early May)....long term long trades maybe better placed after that & into the Summer when flu season is over...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,316
  • Mar 10, 2020 10:00am Mar 10, 2020 10:00am
bot a Mar13 SPY put fly ...$261/265/269....for 13c ...I still can't afford puts much but the flys have been paying...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,317
  • Mar 10, 2020 10:06am Mar 10, 2020 10:06am
Quoting The Fool
{quote} Long Twinkies. I am always long and short the spoos. I am long gold. Trying to get long spread on some of the tanker names just above. Long PBR. I can see a rebound all the way back up to snp 3,400 by June/July, but there will be time to get long for that as the iv's come off on the way up.... Long time no see, I can't quite remember much about you, other than the name.
In VA, used to work for the City, Veteran if any of that jogs your memory
  • #17,318
  • Mar 10, 2020 11:15am Mar 10, 2020 11:15am
Back into the following:

$VIX Mar18 40 PUT @ $2.85
  • #17,319
  • Mar 10, 2020 11:24am Mar 10, 2020 11:24am
Quoting Pharm0r
{quote} In VA, used to work for the City, Veteran if any of that jogs your memory
yep, I was remembering, back from RUT days. So you're an options trader now? Are you still in CE? Do you still talk to sisse's group?
Etc...

I filled some Mar20 SPY $311 calls for 30c, looking to sell the Mar18 same for that or better.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,320
  • Mar 10, 2020 11:47am Mar 10, 2020 11:47am
filled a FRO May call vert $11/12, for 15c
"If The Fool persists in his Folly he will become wise." - William Blake
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