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Let's Trade Options

  • #261
  • May 24, 2013 12:24pm May 24, 2013 12:24pm
Quoting The Fool
{quote} Nice.
thx, i've closed down half the contracts at 24c when price started to rise again, that $24 per contract.
i'm actually looking for $40 per contract thats why i've left some.

i saw it as high as 27c briefly but was too slow to react

this has made up for all the little losses i've had this week plus a little more

GDX May 2013 27.500 put (GDX130524P00027500)
-OPR
0.24 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.07(41.18%) 1:01PM EDT
  • #262
  • May 24, 2013 12:30pm May 24, 2013 12:30pm
I'm going back to my old way of trading just 1-2 times per week because if wait for the right set up you can make trades like that consistently.

this is a patient waiting game but every week you will find a fw good opportunities, wait for my p.m. guys, i haven't forgotten
  • #263
  • May 24, 2013 2:38pm May 24, 2013 2:38pm
Quoting Cecil Gee
I'm going back to my old way of trading just 1-2 times per week because if wait for the right set up you can make trades like that consistently. this is a patient waiting game but every week you will find a fw good opportunities, wait for my p.m. guys, i haven't forgotten
i've closed out the remainder of contracts at at 11c = $11 per contract
  • #264
  • May 24, 2013 2:38pm May 24, 2013 2:38pm
Quoting Cecil Gee
{quote} i've closed out the remainder of contracts at at 11c = $11 per contract
forgot closing contract price

GDX May 2013 27.500 put (GDX130524P00027500)
-OPR
0.11 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.06(35.29%) 3:21PM EDT
  • #265
  • Edited 4:01pm May 24, 2013 3:19pm | Edited 4:01pm
well I made some money this week so I can't complain. left lots on the table ($2k+) on the ewj sep $11 puts, but couldn't do that differently again since I knew I would have a problem having any computer access on Thursday. One lesser reason I have switched over to trading options mostly is I am often unable to daytrade for lack of internet access. Which puts into question any short-term trading strategies, although at times I can swing those.

Feeling pretty precarious here around tiptoppy market highs. Same old BOJ & Fed hot money injections should be ongoing but maybe the market is finally saying he needs a chance to puke after all that forcefeeding. I am waiting to see next week but I wouldn't be surprised if some more dumping is in store & maybe ranging is what is setting up for the summer as Wulfgar said.

Not much excitement in the trades I am in, many need weeks/months to pay well, it seems. IAU straddle needs a strong move in gold but none seem ready. Will be scribbling and studying over the long weekend, need to jack these IRA accounts up so I will not be homeless when I'm old....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #266
  • May 24, 2013 5:44pm May 24, 2013 5:44pm
Quoting The Fool
well I made some money this week so I can't complain. left lots on the table ($2k+) on the ewj sep $11 puts, but couldn't do that differently again since I knew I would have a problem having any computer access on Thursday. One lesser reason I have switched over to trading options mostly is I am often unable to daytrade for lack of internet access. Which puts into question any short-term trading strategies, although at times I can swing those. Feeling pretty precarious here around tiptoppy market highs. Same old BOJ & Fed hot money injections should...
Im with you buddy.... IRA accounts are pretty much non-existant and Im tired of living on a mountain of debt

Had a good week myself.... had a few positions filled and my docket is pretty full

setting up for these ranges I found a good opp on YHOO... took 1.00 credit on a June 24/28 short strangle... If IV can drop a little bit Ill turn it into an Iron condor to mitigate risk.... only risking about .25 per contract though so its good R:R if it stays in its range

Placed another iron condor on IWM.. little bigger one.. July 101/105/91/87 for $1.33 in credit... risking $.42 per contract

Still in my my aug/jun TLT 119 call calender.... Im being more aggressive with it basically just letting it run to expiration and see what happens.... Ill exit though if the extrinsic value of the front month contract falls below .10... after that its just too much risk for a dime

those are the 3 I have working.... I dont allow more than 5 positions at one time so Im basically just sitting on my hands unless something jumps out at me...


only losses I took this week were trying to trade spot FX..... but that is just pocket change, Options are the real bread winner for me

Have a great holiday weekend CG/TF and anyone creeping on this thread

Im off to veg out at the beach all weekend... laterz
  • #267
  • May 24, 2013 6:04pm May 24, 2013 6:04pm
Quoting Wulfgar
{quote} Have a great holiday weekend CG/TF and anyone creeping on this thread Im off to veg out at the beach all weekend... laterz
aah, socal beach time. you have a great vacay too, amigo. I'll be lookin at those strangles morphed to IC's, that's something I can prolly wrap my feeble brain around. Need to get up on the curve on my risk management skillz. Cya next week.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #268
  • May 24, 2013 7:02pm May 24, 2013 7:02pm
http://news.yahoo.com/rising-interes...181014358.html

"...J.P. Morgan Asset Management looked at the relationship between the 10-year Treasury yield and the Standard & Poor's 500 index over the past 50 years, and the results were not what I expected. Instead of seeing a negative relationship between the two, they actually found there was a fairly strong, positive relationship in certain situations.


When the 10-year Treasury yield was below 5 percent, rising interest rates were generally associated with rising stock prices. Why, you ask? If the economy has slowed down and the Federal Reserve is taking steps to try to revive it, they will lower interest rates for the reasons above. But once the Fed sees signs of a recovery, they will reverse their course and raise rates, which signals investors that the problems plaguing the economy are starting to ease. With interest rates as low as they are and the stock market as high as it is, it will be interesting to see if this relationship holds true moving forward."

long bond short could pay off my house
"If The Fool persists in his Folly he will become wise." - William Blake
  • #269
  • Edited 11:31am May 25, 2013 12:35am | Edited 11:31am
lots of interesting little clips on The MoneyShow

http://www.moneyshow.com/marketdata/...?s=v&q=Options

http://www.moneyshow.com/video/Video...Trade-the-VIX/

in the vix video, McMillan talks about VXX options being used mostly as a hedge by inst. traders, says "weekly options are for selling, not buying"
"If The Fool persists in his Folly he will become wise." - William Blake
  • #270
  • May 25, 2013 2:26am May 25, 2013 2:26am
Quoting The Fool
lots of interesting little clips on The MoneyShow http://www.moneyshow.com/marketdata/...?s=v&q=Options http://www.moneyshow.com/video/Video...Trade-the-VIX/
T.F. / WILFGAR check your p.m.
  • #271
  • May 25, 2013 11:15am May 25, 2013 11:15am
Quoting Cecil Gee
{quote} T.F. / WILFGAR check your p.m.
Thanks, mate! Will be studying over the long weekend.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #272
  • May 25, 2013 8:25pm May 25, 2013 8:25pm
Quoting The Fool
lots of interesting little clips on The MoneyShow http://www.moneyshow.com/marketdata/...?s=v&q=Options http://www.moneyshow.com/video/Video...Trade-the-VIX/ in the vix video, McMillan talks about VXX options being used mostly as a hedge by inst. traders, says "weekly options are for selling, not buying"
he is correct to a certain degree, you only look to buy puts because vxx has a natural decay, pull up a long term chart
  • #273
  • Edited May 26, 2013 12:20am May 25, 2013 11:56pm | Edited May 26, 2013 12:20am
I made good money on this etf long outright earlier this year. Looks like a good one for selling calls above a $120 strike. Would just need to hedge against a major gold takedown - the only thing that could send DUST to new highs. $130 Jun '13 calls ($28 otm) are $5.60.
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #274
  • Edited 1:43am May 26, 2013 1:16am | Edited 1:43am
The companion 3x bull goldminers etf is NUGT. Looks like theres a 1.5:1 factor DUST:NUGT in % movement. So, sell $130 DUST calls hedge with long puts in NUGT.

(Well after poking around I didn't find any free lunch here...)
Attached Image(s) (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #275
  • May 26, 2013 6:03am May 26, 2013 6:03am
Quoting The Fool
The companion 3x bull goldminers etf is NUGT. Looks like theres a 1.5:1 factor DUST:NUGT in % movement. So, sell $130 DUST calls hedge with long puts in NUGT. (Well after poking around I didn't find any free lunch here...) {image} {image}
you need to check the spreads and liquid in option terms, yes good% movement but we need see if we can get filled easily on the close of the optiobn. i'm not so sure
  • #276
  • May 26, 2013 11:47am May 26, 2013 11:47am
Got a few books yesterday & have started on them. Pasarelli one is good. Also got two by Jeff Augen - "The Volatility Edge in Options Trading" and "Options Traders Workbook." So, I'm set for books. Now just need to put in the work, study, and practice. Or maybe I'll win the lotto. Lotto budget is $25/week. Got 5/6 a couple months ago and won $1,000. Stuck it in an IRA.

http://ecx.images-amazon.com/images/...SH20_OU01_.jpg
"If The Fool persists in his Folly he will become wise." - William Blake
  • #277
  • May 26, 2013 11:50am May 26, 2013 11:50am
Quoting The Fool
Got a few books yesterday & have started on them. Pasarelli one is good. Also got two by Jeff Augen - "The Volatility Edge in Options Trading" and "Options Traders Workbook." So, I'm set for books. Now just need to put in the work, study, and practice. Or maybe I'll win the lotto. Lotto budget is $25/week. Got 5/6 a couple months ago and won $1,000. Stuck it in an IRA. http://ecx.images-amazon.com/images/...SH20_OU01_.jpg
I gotta check my lotto tix today actually

If i won... to hell with trading

lemme know how those books r brother
  • #278
  • May 26, 2013 12:46pm May 26, 2013 12:46pm
bond bubble talk is all the rage. Of course, that's been going on long time. Still, open interest peaks in the Sep '13 puts in the bond instruments across the board. Everybody looking at Jackson Hole.

http://www.kc.frb.org/publications/r...cp/archive.cfm

I've been looking for a muni bond etf with liquid options but there doesn't seem to be one.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #279
  • May 26, 2013 2:22pm May 26, 2013 2:22pm
being long the underlying and long 3-4 months further down the curve 10-15 delta puts as a hedge ALWAYS works
why? here is why:
1. you enjoy the benefit of flat price rallying
2. your teenie puts do NOT lose as much value as your outright position gains due to the fact of being long LONG dated options, where your worst enemy is not time decay but the vega in the option itself, longer-dated derivatives have enormous amounts of inherent vega risk while theta is small, hence the tradeoff.
3.in case of a sharp selloff, your teenie puts WILL explode, literary explode due to the implied volatility being bid thru the roof by institutions... see here is the little caveat about options, you can win ONLY so much money on the underlying, but option bidding could be ENDLESS, thus raising the explicit value of any OTM thru high heavens.
4.when institutions pile up on the bid for straddles strangles and beefy(40 delta puts) market makers have no option but to keep raising their option offers thus artificially raising the implied intraday vol in the options pit and the "screen" (internet) this spills over GLOBEX and the whole world (herd) follows by lifting exorbitantly high offers for option du jour
5. this is the most basic form of hedging where you stand to make money, your worst enemy....implied vol leves get really monkey hammered by institutions, funds and CBs even. then you lose erode your options out of your bottom and have little gain or small loss to show for the underlying that are long

another very very profitable way to trade is to buy a straddle and start gamma scalping your delta position (hedging) at support and resistance, this is a very lucrative sport as long as you do not buy options at the high of VIX, OVX and other vol instruments which are also traded on a chart, but is a whole different topic
Thank you Malcolm, Belekas, Jim, raczekfx and Ryanmcd !
  • #280
  • May 26, 2013 2:41pm May 26, 2013 2:41pm
Quoting djambazov84
being long the underlying and long 3-4 months further down the curve 10-15 delta puts as a hedge ALWAYS workswhy?

....another very very profitable way to trade is to buy a straddle and start gamma scalping your delta position (hedging) at support and resistance, this is a very lucrative sport as long as you do not buy options at the high of VIX, OVX and other vol instruments which are also traded on a chart, but is a whole different topic
AWESOME djambazo you sound like a pro. gamma scalping I am def into but not quite well-capitalized for yet. Long underlying with long puts out a ways I have played before, not enough to say ALWAYS but I ain't arguing. I am looking at FB for that maybe....
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"If The Fool persists in his Folly he will become wise." - William Blake
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