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Let's Trade Options

  • #17,441
  • Mar 30, 2020 2:27pm Mar 30, 2020 2:27pm
On a day when the indices were up near 4%, the al's were down 8-12%. I am waiting for more lows....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,442
  • Mar 30, 2020 5:49pm Mar 30, 2020 5:49pm
Quoting The Fool
On a day when the indices were up near 4%, the al's were down 8-12%. I am waiting for more lows....
Okay, I give...what is "al"?....
  • #17,443
  • Mar 30, 2020 6:50pm Mar 30, 2020 6:50pm
Quoting moneymaker2
{quote} Okay, I give...what is "al"?....
air lines. I want AAL under $5
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,444
  • Mar 30, 2020 10:29pm Mar 30, 2020 10:29pm
Any recommendation on a recourse to learn appropriate pricing / how to select the right option.

for instance I currently believe spy and dia will drop over the next month from current levels. What is the best way to approach bang for buck?
Dr. C
  • #17,445
  • Mar 30, 2020 11:01pm Mar 30, 2020 11:01pm
Quoting cvcamper
Any recommendation on a recourse to learn appropriate pricing / how to select the right option. for instance I currently believe spy and dia will drop over the next month from current levels. What is the best way to approach bang for buck?
...you need an education if you want to trade options. You should study the subject and do a lot of paper trading and see what works for you. It will take you at least a few months of dedicated effort and probably a lot more than that. I regularly post live trades here and so does moneymaker.

The iv's on index options are quite high now, so they are expensive to buy. I prefer to trade spreads to bring the cost down. I have been loading flys with some success - I am usually getting into $6-8 wide flys pretty far otm for about 15c, which pay 3x-4x with a good finish. Other time spreads are better bought when the iv's are low. That's gonna be a while.

Check out tastytrade for lots of educational content.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,446
  • Mar 31, 2020 7:43am Mar 31, 2020 7:43am
How are cruise lines going to stay afloat after this?
Attached Image (click to enlarge)
Click to Enlarge Name: 2020-03-31_0739CCL.png Size: 167 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,447
  • Mar 31, 2020 10:36am Mar 31, 2020 10:36am
Quoting The Fool
How are cruise lines going to stay afloat after this? {image}
I wondered that when all of them were breaking down and having all those sewage problems a few years ago. Those issues were all on them and they came back from that, so I think an issue of sick passengers will be a lot easier to come back from. When this coronavirus gets under control, business will pick up on all ends of the spectrum.

People tend to have very short memories....
  • #17,448
  • Mar 31, 2020 10:54pm Mar 31, 2020 10:54pm
This SPY put fly looks headed for a decent finish, might be worth max $1,00 maybe $1.10, I would be happy with 70c net. I have 2 other Apr3 put flys much lower, need to make up for those...
Attached Image (click to enlarge)
Click to Enlarge Name: 2020-03-31_2233spy.png Size: 278 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,449
  • Apr 1, 2020 12:49pm Apr 1, 2020 12:49pm
In the following:

UAL Jun19 45 CALL @ $1.20

Should be good for some money....
  • #17,450
  • Apr 1, 2020 1:45pm Apr 1, 2020 1:45pm
Not too shabby. As stated earlier, high confidence of SPY falling. Managed to double the money over 2 days - but I know you would have done better with right price/value option
Dr. C
  • #17,451
  • Apr 1, 2020 1:48pm Apr 1, 2020 1:48pm
Quoting moneymaker2
In the following: UAL Jun19 45 CALL @ $1.20 Should be good for some money....
...I still think June too soon. Prolly plenty time to get in al stocks at lower lows...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,452
  • Apr 1, 2020 2:09pm Apr 1, 2020 2:09pm
Quoting The Fool
{quote}...I still think June too soon. Prolly plenty time to get in al stocks at lower lows...
This October should be another bloodbath.
  • #17,453
  • Apr 1, 2020 3:29pm Apr 1, 2020 3:29pm
What're you thinking re: October - pre-election angst?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,454
  • Apr 1, 2020 3:30pm Apr 1, 2020 3:30pm
Quoting The Fool
This SPY put fly looks headed for a decent finish, might be worth max $1,00 maybe $1.10, I would be happy with 70c net. I have 2 other Apr3 put flys much lower, need to make up for those...
flys are cheap but they are kind of a pain, you really need to hold them to get the best profit. If they go itm deep, I'm always worried somebody will start poaching the shorts
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,455
  • Apr 1, 2020 4:01pm Apr 1, 2020 4:01pm
Quoting The Fool
What're you thinking re: October - pre-election angst?
Yes, exactly. Prior to that it will be a stream of (comparatively) bad earnings data. It will be very close in the polls. Trump will win. Markets love Trump for some reason. Boom. Beginning of another 7-8 year cycle.
  • #17,456
  • Apr 1, 2020 9:55pm Apr 1, 2020 9:55pm
Quoting The Fool
...I still think June too soon. Prolly plenty time to get in al stocks at lower lows...
If you read up on the bailout proposals for the airlines - they might not make it thru this without getting quasi-nationalized. Equity stake to cover the bailout grants they are asking for is around 50%.They are not likely going to accept that. They might get loans instead, but they will have to probably float alot more stock to help pay those off.

I can't help but suspect the end result will be it is going to be even more expensive to fly anywhere...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,457
  • Apr 2, 2020 8:46am Apr 2, 2020 8:46am
I know the major cost of for the airlines is fuel, and they offset that cost via oil futures. I'm thinking with oil so low, that they have enough futures out in front to lower their costs big time for at least the remainder of the year.

However, I'm like you, somehow things will be arranged such that any losses will be directed at the consumer in the form of increased ticket and baggage prices....
  • #17,458
  • Edited 9:57am Apr 2, 2020 9:05am | Edited 9:57am
at the open filled Sep31 XLE $47.21 calls for 20c

...couple days ago I bot back USO short legs on all of the May/Oct USO call calendars that I have for 2c.....looking to resell May calls if the oil bounce keeps going
"If The Fool persists in his Folly he will become wise." - William Blake
  • #17,459
  • Apr 2, 2020 10:52am Apr 2, 2020 10:52am
In the following:

AAL Jun19 13 CALL @ $1.28

Looks like it might be hitting on some support on the Daily and Weekly charts, and with oil low, I think we will see a rise in price by then, so should be good for some money while waiting for the market to settle into a groove again....
  • #17,460
  • Apr 2, 2020 11:21am Apr 2, 2020 11:21am
AAL about to close under $10...? I'd guess it can go to $5....maybe to bk, although it is going to take some time to play out. I don't think we are going to be looking at anything close to resumption of normal air travel by June. We will probably have "lockdown" rules in place across the nation extended into May - air travel will be a small fraction of normal.

Personally, I am not going to the airport or getting in a plane until there are virus therapeutics and vaccines available widely. We are planning car vacations for summer already....

https://finance.yahoo.com/news/ameri...073818503.html
"If The Fool persists in his Folly he will become wise." - William Blake
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