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Let's Trade Options

  • #581
  • Jun 7, 2013 3:23pm Jun 7, 2013 3:23pm
Quoting The Fool
my paper TLT $114 w puts I said I'd be happy with a double went to triple - live & learn
Nice
  • #582
  • Jun 7, 2013 3:30pm Jun 7, 2013 3:30pm
See you later T.F.
  • #583
  • Jun 7, 2013 3:58pm Jun 7, 2013 3:58pm
Quoting Cecil Gee
See you later T.F.
cya bud have a great weekend
"If The Fool persists in his Folly he will become wise." - William Blake
  • #584
  • Jun 8, 2013 10:31am Jun 8, 2013 10:31am
Another good educational video by these guys. Vertical spreads

Inserted Video
  • #585
  • Jun 8, 2013 1:11pm Jun 8, 2013 1:11pm
Quoting Cecil Gee
Another good educational video by these guys. Vertical spreads https://www.youtube.com/watch?v=HaoM4nqxYhU
THANKS, CG, I was thinking about MSFT for the exact reasons they discuss. I will throw up my stab at a good vertical MSFT spread this weekend.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #586
  • Jun 8, 2013 1:17pm Jun 8, 2013 1:17pm
I've been having a little trouble understanding options, mainly how the money is made. I know the strike price is the underlying stock price plus the contract price or premium, if that's what it's called. I know that it's usually 100 contracts per lot or whatever it's called if it's different in the options market. Now, let's say I'm looking at an imaginary ABC priced at $50 with contracts going for $1 at the strike price of $51. (i think) Now, when I bet, my loss would only be the premium x whatever my size is, right? And for the contract to break even, I'd need ABC to reach $52? And then after that, the greek stuff starts coming into play determining how much the premium goes up per underlying price?

So, if the premium went from $1 to $5 and the underlying price went from $50 to $60, I would be looking at $400 profit excluding the commissions? Sorry if this is confusing, cause I'm already confused!
Play the players, not the cards.
  • #587
  • Jun 8, 2013 1:41pm Jun 8, 2013 1:41pm
Quoting GnarlyPips
I've been having a little trouble understanding options, mainly how the money is made. I know the strike price is the underlying stock price plus the contract price or premium, if that's what it's called. I know that it's usually 100 contracts per lot or whatever it's called if it's different in the options market. Now, let's say I'm looking at an imaginary ABC priced at $50 with contracts going for $1 at the strike price of $51. (i think) Now, when I bet, my loss would only be the premium x whatever my size is, right? And for the contract to break...
Hi Gnarly, strike price refers to the price of the underlying - which might be a stock or futures contract or etf or whatever. An options contract on MSFT deals with 100 shares MSFT, for instance. The options contract has intrinsic value and extrinsic (or time) value. Options are tradable instruments, and an options contract may trade higher that what you bought it for before it gets to the strike price. There's not space in the thread to lay out all the basics of options trading, tho, so I recommend you get a good intro book - here's the best seller on Amazon:


http://ecx.images-amazon.com/images/...SH20_OU01_.jpg
"If The Fool persists in his Folly he will become wise." - William Blake
  • #588
  • Jun 8, 2013 6:22pm Jun 8, 2013 6:22pm
Paid for both of the options books you recomended, Should be here Monday!
  • #589
  • Edited Jun 9, 2013 12:37am Jun 8, 2013 11:11pm | Edited Jun 9, 2013 12:37am
I only read a few blogs regularly - Marc's being one.

http://www.marctomarket.com/2013/06/...chnical_8.html

He forecasts:

"...a somewhat firmer dollar, and better performing emerging market currencies and a recovery in equities in the days ahead."

"We look for a return to the JPY100 area."

...also continuing AUD weakness...

I keep thinking there will be a re-emergence of emerging market stocks and look for a trade that way. EDZ is another Direxion 3x leveraged etf that had a recent split, I might try a bear spread of some kind on it. Low volume, options are thin, but it's tradeable.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #590
  • Jun 9, 2013 12:22am Jun 9, 2013 12:22am
EEM maybe a better play for an emer markets stock turn, much better liquidity & cheaper options

Maybe I will sell Jun 22 $39.00 puts @ $0.42 and buy Jul 20 $42 calls @ $0.41
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #591
  • Jun 9, 2013 12:31am Jun 9, 2013 12:31am
Quoting Soundz
Paid for both of the options books you recomended, Should be here Monday!
Hey. good luck with your studies. Those are good books and will serve you well if you are going to trade options. Another one that I am just reading now is this one, which has the most thorough explanation of options Greeks that have found. And that might be all the books a newbie needs, that and watch all the Tastytrade vids as you are getting up to speed by papertrading.

http://ecx.images-amazon.com/images/...SH20_OU01_.jpg
"If The Fool persists in his Folly he will become wise." - William Blake
  • #592
  • Jun 9, 2013 12:52am Jun 9, 2013 12:52am
Quoting The Fool
{quote} THANKS, CG, I was thinking about MSFT for the exact reasons they discuss. I will throw up my stab at a good vertical MSFT spread this weekend.
idk maybe buy the Jul 20 $37 calls @ $0.87 and sell the Jun 22 $35 puts @ $0.31 for a bullish play, only that seems a lil too aggressive for MSFT - i'm not on it enough to know whether to be long or short.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #593
  • Jun 9, 2013 1:08am Jun 9, 2013 1:08am
Quoting Cecil Gee
Anyone with spread experience what do you think on buying JULY TLT $110 puts for 97c and selling August $103 puts for 40c making a debit cost of 57c
maybe sell the nearer puts and buy the next month puts

sell Jul puts buy Aug puts
$102 $0.15 $108 $1.23
$103 $0.17 $107 $1.01
$104 $0.22 $106 $0.82
$105 $0.29 $105 $0.67
$104 $0.54

I might do the $105 calendar or go $105 front $104 next, just a first glance

I think $105 to sell the front month would be safe
"If The Fool persists in his Folly he will become wise." - William Blake
  • #594
  • Jun 9, 2013 1:40am Jun 9, 2013 1:40am
AUD/USD some smart people say is going to $0.65. When, they didn't say. The FXA thingy here is pretty thin. If I could sell calls I would sell Sep $99.00 @ $0.55 to fund Jan '14 $88 puts @ $1.80.

What liquid instrument with cheap options will correlate well with AUD? This is another one of those dope trades that could pay off the mortgage. Maybe.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #595
  • Jun 9, 2013 1:57am Jun 9, 2013 1:57am
I picked up Dec 101 Call for FXY @ 1.45 a week or two back. Currently in the green and I'm gonna see if it can make its way up to 110.

Also have QQQ July 71 Put @ 0.85. I think equities are due for a down turn...

I'm itching to go short on FXA with puts but I need a retracement for entry.. $99 would be nice!
  • #596
  • Jun 9, 2013 2:04am Jun 9, 2013 2:04am
Quoting biDc
I picked up Dec 101 Call for FXY @ 1.45 a week or two back. Currently in the green and I'm gonna see if it can make its way up to 110. Also have QQQ July 71 Put @ 0.85. I think equities are due for a down turn... I'm itching to go short on FXA with puts but I need a retracement for entry.. $99 would be nice!
idk about that much pullback in JPY, and I think equities are gonna go sideways, but that AUD short might be one of the easiest trades to be found
"If The Fool persists in his Folly he will become wise." - William Blake
  • #597
  • Edited 11:04am Jun 9, 2013 10:23am | Edited 11:04am
Just a quick question, what broker do you guys use for options, and what broker has a wide range of FX options with the actual price not a different price/charts concocted by the broker, sorry if this question has been answered before, thanks.
  • #598
  • Jun 9, 2013 11:15am Jun 9, 2013 11:15am
Quoting pip miner
Just a quick question, what broker do you guys use for options, and what broker has a wide range of FX options with the actual price not a different price/charts concocted by the broker, sorry if this question has been answered before, thanks.
options are exchange traded, prices are gonna be virtually the same across the board. Where you trade depends on how you trade - if you're loading up lots of contracts it will pay to be at one of the deep discounted brokers. Some traders here I know favor Interactive Brokers, others Trade Monster. I trade out of some IRA's mostly - you can find those everywhere, I use the discount multiservice ones like Etrade & TDAmeritrade
"If The Fool persists in his Folly he will become wise." - William Blake
  • #599
  • Jun 9, 2013 11:25am Jun 9, 2013 11:25am
Quoting The Fool
AUD/USD some smart people say is going to $0.65. When, they didn't say. The FXA thingy here is pretty thin. If I could sell calls I would sell Sep $99.00 @ $0.55 to fund Jan '14 $88 puts @ $1.80. What liquid instrument with cheap options will correlate well with AUD? This is another one of those dope trades that could pay off the mortgage. Maybe. {image}
verticle put spread maybe better
  • #600
  • Jun 9, 2013 12:01pm Jun 9, 2013 12:01pm
T.F. edz IS NOT LIQUID ENOUGH even though it has some good movement, it bid/ask spread is wide.
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