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Let's Trade Options

  • #241
  • May 23, 2013 1:22pm May 23, 2013 1:22pm
Another trade based on a math equation

I've bought a strangle on BAC- bank of america for tommorrow expiration

bac is trading at 13.32 at present, i purchased $, details below13.50 call and the $13 put for 2c each

Bank of America Corporation (BAC)
-NYSE
13.32 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.01(0.05%) 2:13PM EDT - Nasdaq Real Time Price

BAC May 2013 13.500 call (BAC130524C00013500)
-OPR
0.02 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.03(60.00%) 1:56PM EDT



BAC May 2013 13.000 put (BAC130524P00013000)
-OPR
0.02 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.01(33.33%) 2:00PM EDT
  • #242
  • May 23, 2013 1:56pm May 23, 2013 1:56pm
Quoting Cecil Gee
{quote} I'm assuming you buy longer time options and sell the short weekly options against to collect the premium thus reducing your cost of the longer time option you purchased
Exactly...basic range and positive vega/ negative theta capturing setup... Very high probability, low risk, moderate to high reward

I just do them on instruments that are in very Low Iv positions.... Most trades never make it to expiration since Ill exit and make my money on the increase in vega but periodically Ill get the larger payoff of taking the short strike option to. 05
  • #243
  • May 23, 2013 3:51pm May 23, 2013 3:51pm
apart from my open positions as written a couple posts above, i'll be watching GDX- AIG - EWZ

ewz $54 put

AIG $44 puts

GDX $28 or $28.50 calls to start with if it opens under 27.48 then i;ll look for puts instead. GDX closed 27.87 today

see where markets open but thats what my bias is as of writing
  • #244
  • May 23, 2013 5:51pm May 23, 2013 5:51pm
Quoting The Fool
Nikkei I see sold off 7.3%. Can we get some follow thru in NY?
Not much of one I see. I sold EWJ puts at market open for about 80% roi, now thinking of getting back in EWJ Sep '13 $12 long calls. TLT came back for me but prolly not far enough for the $118 calls I paid $0.16 for on Wednesday. Those are worth $0.04 now. Now would have been the time, but not seeing big move up in TLT for Friday, we'll see.

CG, I like that BAC strangle, I bet you make some money on that.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #245
  • May 23, 2013 5:58pm May 23, 2013 5:58pm
Quoting The Fool
{quote} Not much of one I see. I sold EWJ puts at market open for about 80% roi, now thinking of getting back in EWJ Sep '13 $12 long calls. TLT came back for me but prolly not far enough for the $118 calls I paid $0.16 for on Wednesday. Those are worth $0.04 now. Now would have been the time, but not seeing big move up in TLT for Friday, we'll see. CG, I like that BAC strangle, I bet you make some money on that.
we need movement tomorrow for bac to work, i looked at it again and in future probably wait on trading bac options until its stock price increases.

EWZ does not look look for longs, holding above 55.45 has proven so difficult
  • #246
  • May 23, 2013 6:02pm May 23, 2013 6:02pm
after hrs futures trading higher
  • #247
  • May 23, 2013 6:42pm May 23, 2013 6:42pm
Quoting Cecil Gee
{quote}EWZ does not look look for longs, holding above 55.45 has proven so difficult
EWZ needs a breakout move to reverse the dump it took about this time last year. I could see that happening when the Fed tightens and diverts flows into US stocks back into emerging markets.

long yen and long Nikkei look like good bets for the summer.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #248
  • May 24, 2013 12:01am May 24, 2013 12:01am
Vertical dump to close in the Nikkei ...closed my EWJ puts way too soon. Looking forward to seeing what follows in NY. Wonder if we can get some decent pop in gold? Bet we do.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #249
  • May 24, 2013 12:05am May 24, 2013 12:05am
Quoting The Fool
{quote} long yen and long Nikkei look like good bets for the summer.
well short yen I meant of course. and we'll see how far these dumps can run.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #250
  • May 24, 2013 12:08am May 24, 2013 12:08am
Quoting Cecil Gee
{quote} we need movement tomorrow for bac to work,
movement, indeed.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #251
  • May 24, 2013 9:02am May 24, 2013 9:02am
Quoting The Fool
{quote} movement, indeed.
markets have been open for 30 minutes and all my options are in the right direction but there s no serious follow through, WHICH AINT NO GOOD TO ME
AIG- DOWN
PFE- DOWN
BAC- DOWN
GDX -UP
EWZ-DOWN

I'M TAKING THE $28.50 GDX CALL FOR TODAYS EXPIRATION AT 3C

GDX May 2013 28.500 call (GDX130524C00028500)
-OPR
0.03 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 0.07(70.00%) 9:41AM EDT
  • #252
  • May 24, 2013 9:26am May 24, 2013 9:26am
Quoting Cecil Gee
{quote} markets have been open for 30 minutes and all my options are in the right direction but there s no serious follow through, WHICH AINT NO GOOD TO ME
Yeah my $118 TLT call first weekly option trade looking to be a loss, TLT moving up well but the option not. I will need to study & papertrade these a lot more to see how options behave at expiry b4 I can risk any real money on them.

Gold sluggish, looking for a good move for my IAU straddle to pay. Probably no conviction in moves down in stock markets, will be watching net week for possible buying opps
"If The Fool persists in his Folly he will become wise." - William Blake
  • #253
  • May 24, 2013 9:37am May 24, 2013 9:37am
Quoting The Fool
{quote} Yeah my $118 TLT call first weekly option trade looking to be a loss, TLT moving up well but the option not. I will need to study & papertrade these a lot more to see how options behave at expiry b4 I can risk any real money on them. Gold sluggish, looking for a good move for my IAU straddle to pay. Probably no conviction in moves down in stock markets, will be watching net week for possible buying opps
because you bought your TLT earlier in the week even though it was cheap by friday, all the time value had decayed away and today we need a 1% = fall in s/p for TLT to be above 118, can't see it happening
  • #254
  • May 24, 2013 9:46am May 24, 2013 9:46am
bank holidays on monday may be the reason why volume is light, traders most like finish early today. note to self, be aware of holidays
  • #255
  • May 24, 2013 9:49am May 24, 2013 9:49am
Quoting Cecil Gee
bank holidays on monday may be the reason why volume is light, traders most like finish early today. note to self, be aware of holidays
i can see an accelerated fall on tuesday when markets open, what should of happened today. lets wait and see
  • #256
  • May 24, 2013 9:55am May 24, 2013 9:55am
Quoting Cecil Gee
bank holidays on monday may be the reason why volume is light, traders most like finish early today. note to self, be aware of holidays
yup, had the direction right, but that's all, not good enough. TLT puts are cheaper though, but I will wait and see if selloff carries thru to next week. could be buying opp in EWJ, short yen (long U/J) but will wait til next week to see if things settle down. Right, 3-day weekend here, options trading shut on monday
"If The Fool persists in his Folly he will become wise." - William Blake
  • #257
  • May 24, 2013 11:21am May 24, 2013 11:21am
Quoting The Fool
{quote} yup, had the direction right, but that's all, not good enough. TLT puts are cheaper though, but I will wait and see if selloff carries thru to next week. could be buying opp in EWJ, short yen (long U/J) but will wait til next week to see if things settle down. Right, 3-day weekend here, options trading shut on monday
GDX started to make a move south, i closed the call side taking a a 3c loss and opened the GDX $27.50 PUT FOR 4C

GDX May 2013 27.500 put (GDX130524P00027500)
-OPR
0.04 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.13(76.47%) 11:53AM EDT
  • #258
  • May 24, 2013 12:00pm May 24, 2013 12:00pm
Quoting Cecil Gee
{quote} GDX started to make a move south, i closed the call side taking a a 3c loss and opened the GDX $27.50 PUT FOR 4C GDX May 2013 27.500 put (GDX130524P00027500)-OPR0.04 {image} 0.13(76.47%) 11:53AM EDT

GDX is down to $27.34 this second, my option is up to 18c, i'm keeping it open a while longer

Market Vectors Gold Miners ETF (GDX)
-NYSEArca
27.34 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.53(1.90%) 12:58PM EDT - Nasdaq Real Time Price
  • #259
  • May 24, 2013 12:06pm May 24, 2013 12:06pm
Quoting Cecil Gee
{quote} GDX is down to $27.34 this second, my option is up to 18c, i'm keeping it open a while longer Market Vectors Gold Miners ETF (GDX)-NYSEArca27.34 {image} 0.53(1.90%) 12:58PM EDT - Nasdaq Real Time Price
so far the $4 i paid per contract is are worth $18 per contract - GAMMA
  • #260
  • May 24, 2013 12:19pm May 24, 2013 12:19pm
Quoting Cecil Gee
{quote} so far the $4 i paid per contract is are worth $18 per contract - GAMMA
Nice.
"If The Fool persists in his Folly he will become wise." - William Blake
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