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Let's Trade Options

  • #741
  • Jun 21, 2013 2:51pm Jun 21, 2013 2:51pm
Quoting Cecil Gee
{quote} I might too on AIG on the put side, it looks as though it will retrace higher at the open but if it falls below 44.49 then I'll look to buy the $44 put for todays expiration. This all depends on the volume and how high we have retraced from yesterdays close of 44.27. Or I may take a trade for next week on this American International Group, Inc. (AIG) -NYSE 44.27 Jun 20, 4:00PM EDT
i didn't take the above trade as i've had a good week and thought not not to take any more risk. The trade work exactly as written above. AIG went to 44.66 then down to 43.33 and is now trading at 43.90. The OPTION was a 4;1 return had i taken it.

American International Group, Inc. (AIG)
-NYSE
43.90 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 0.38(0.85%) 3:42PM EDT - Nasdaq Real Time Price

Prev Close:
44.27
Open:
44.60
Bid:
43.91 x 2500
Ask:
43.92 x 800
1y Target Est:
48.08
Beta:
1.77
Next Earnings Date:
29-Jul-13http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png
Day's Range:
43.33 - 44.66
52wk Range:
29.90 - 46.46
Volume:
16,440,918
Avg Vol (3m):
16,747,600
Market Cap:
64.80B
P/E (ttm):
28.73
EPS (ttm):
1.53
  • #742
  • Jun 21, 2013 3:04pm Jun 21, 2013 3:04pm
Quoting The Fool
{quote} good read CG, I see several of the financials sliding, see C. ...also, WFC on a bounce, might provide a good put entry
seen it and that was the trade to make us a whole load of money today, the $47 put opened for 5c and went as high as $1.43
simple terms $5 became $143 per contract during the day and we missed it!!

C Jun 2013 47.000 put (C130622P00047000)
-OPR
0.14 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.01(7.69%) 3:43PM EDT


Prev Close:
0.13
Open:
0.12
Bid:
0.17
Ask:
0.19
Strike:
47.00
Expire Date:
21-Jun-13
Day's Range:

0.05 - 1.43
Contract Range:
N/A - N/A
Volume:
8,690
Open Interest:
7,465
  • #743
  • Jun 21, 2013 3:15pm Jun 21, 2013 3:15pm
Quoting The Fool
{quote} one thing I saw re: VXX is the very large spreads that show with increased volatility....given that, it might be cheaper to play one of the liquid leveraged ETF's instead my Sep $100 TLT puts are $0.20 itm, I wonder if the Fed will screw me...
T.F. you must be more ITM now on TLT,
  • #744
  • Jun 21, 2013 3:20pm Jun 21, 2013 3:20pm
I'm glad I came across this thread.

I've been so focused on FX the last few years that I've completely forgotten about options, and how much fun (yes fun) they can be to trade.

One question I have though, for the people who are contributing to this thread, is where are you trading? Since I've moved out of the U.S. there seems to be a lot less options (no pun intended) for trading options. I used to trade optionhouse. Most of the options places that come up in google search now is binary options, which I personally don't care for.

What would really be nice if there was a broker that gave you the choice of trading spot forex and options in the same account, or at least same brokerage. Anyone seen this?

If not where you do you trade, especially if outside US?
  • #745
  • Jun 21, 2013 3:20pm Jun 21, 2013 3:20pm
Quoting Cecil Gee
If google doesn't bounce soon then there next for some put plays, it closed at $884 today
Google closed $880, its on the brink for some put action. $878 or lower should do it next week
  • #746
  • Jun 21, 2013 3:24pm Jun 21, 2013 3:24pm
Quoting MicksMoney
I'm glad I came across this thread. I've been so focused on FX the last few years that I've completely forgotten about options, and how much fun (yes fun) they can be to trade. One question I have though, for the people who are contributing to this thread, is where are you trading? Since I've moved out of the U.S. there seems to be a lot less options (no pun intended) for trading options. I used to trade optionhouse. Most of the options places that come up in google search now is binary options, which I personally don't care for. What would really...
the only one i know about is interactive brokers that do both, don't know about there commissions
  • #747
  • Jun 21, 2013 3:32pm Jun 21, 2013 3:32pm
Quoting Cecil Gee
{quote} seen it and that was the trade to make us a whole load of money today, the $47 put opened for 5c and went as high as $1.43 simple terms $5 became $143 per contract during the day and we missed it!!
Hey CG - never fear, there will be more. Glad you turned me on to these & I am starting to tune in to the process.

Yep, TLT sep $100 puts are @ $1.12 - I paid $0.60.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #748
  • Jun 21, 2013 3:33pm Jun 21, 2013 3:33pm
I just discover this treat for options.
I was a daytrading in futures for 5 years but now move to options world.
I will be here next week share ideas and learn from all real traders.
thanks in advance.
  • #749
  • Jun 21, 2013 3:34pm Jun 21, 2013 3:34pm
Quoting The Fool
{quote} Hey CG - never fear, there will be more. Glad you turned me on to these & I am starting to tune in to the process. Yep, TLT sep $100 puts are @ $1.12 - I paid $0.60.
Thats what i like to hear, good stuff
  • #750
  • Jun 21, 2013 3:35pm Jun 21, 2013 3:35pm
Quoting successlife
I just discover this treat for options. I was a daytrading in futures for 5 years but now move to options world. I will be here next week share ideas and learn from all real traders. thanks in advance.
your welcome
  • #751
  • Jun 21, 2013 3:39pm Jun 21, 2013 3:39pm
Quoting Cecil Gee
{quote} the only one i know about is interactive brokers that do both, don't know about there commissions
yes IB will set you up in an account where you can trade common equity across all instruments (they used to call it a "Universal Account"), I think the min. balance to start is $10k, but check the website.

I have an IRA I want to transfer to IB to take advantage of their low comm's, hope to get that done soon.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #752
  • Jun 21, 2013 3:44pm Jun 21, 2013 3:44pm
Quoting successlife
I just discover this treat for options. I was a daytrading in futures for 5 years but now move to options world. I will be here next week share ideas and learn from all real traders. thanks in advance.
yep, welcome, share anytime, cya next week
"If The Fool persists in his Folly he will become wise." - William Blake
  • #753
  • Jun 22, 2013 9:00am Jun 22, 2013 9:00am
sat here wondering if the option method we use for large volatile moves could be used to trade forex major currencies
  • #754
  • Jun 22, 2013 9:55am Jun 22, 2013 9:55am
VZ (VERIZON) looks good for $48 put come next week, just hope they don't move it before the market opens on monday

$48 put option is priced at 15c. with any luck the underly moves up a little then down a little so a little more time decay can take effect making that option cheaper to buy. We shall see

Verizon Communications Inc. (VZ)
-NYSE
49.52 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.56(1.14%) Jun 21, 4:04PM EDT|After Hours : 49.50 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.02 (0.04%) Jun 21, 7:27PM EDT
  • #755
  • Jun 22, 2013 11:56am Jun 22, 2013 11:56am
Quoting Cecil Gee
sat here wondering if the option method we use for large volatile moves could be used to trade forex major currencies
similar method in fx is fishing breakouts with tight stops. how tight is "tight"? Well that is a matter of skill. You can identify channels with a good possibility of breakouts to either side. Define the channel by various means, typically Boll bands with a 2 sd setting. Set your entry on the top of the band, the middle, or the bottom - all might work for an expected breakout to the topside, for instance, but the key is the stop. Setting a tight stop will mean your stop is on the other side of the expected move and (hopefully) outside the range of the false move or fakeout the other way. If you have a 20-pip band then you should be able to catch a breakout move north from the bottom of the band with a 20-pip stop below. If you get in that way and your coin moves 200 pips away from your stop, quite doable in a good day or so, then r:r @ 1:10 is in the ballpark of your options method. Hang on for a 500+ pip run with 100:1 leverage would be a great trade, but the kind of trade that you can catch several times a year...watch your account grow exponentially...

Stair-step patterns with iterative breakouts up/down are even better, but less common. There you can tighten up your stop for even better r:r.

You can scalp into a strong trending move with tight stops and similar results.

You can play event or news-based breakouts. This s a really fun way to fish. It really is just like fishing - you have to bring a bucket full of bait (entries with tight - 5-10 pip - stops) in hopes of catching a few big fish, or big moves.

Take NFP, for instance, (or FOMC, or Brit GDP, or various CB rate set decisions, etc etc) and E/U or U/J or any pair that will move hard on news. PA will be constrained leading up to the news, so you can take a position in the minutes before, when the spreads are still normal. To catch a good move north, say, set your entry above the pre-news level with a very tight stop, then wait. Fishing. How far above and how tight a stop? Well, you will learn the traits of your fish by experience. You can scalp into huge moves this way with tiny stops. If you were wrong in the direction, then you're out a 0.5% or 1% chunk of your account that the stop represents - whatever risk you like. A safer way to play is to set your bait with tight stop and a set profit, because often there are moves either side of news level. You have to catch a good move with momentum, because the spreads will widen so much that tight stops will be swept up in a move that is jagging around... You can play either side of a move simultaneously with the same pair, if your broker will allow, or with negatively correlated pairs....

These tight stop scalps, with risk set at .01(total equity), or $100, or whatever, on 1 10-pip stop (or whatever) can hurt you by 1,000 cuts if you're unlucky, but you just need to catch a small percentage that run in your favor to make up for the losses. I used to trade this way all the time. If it were allowed in my IRA's I'd do so again..
"If The Fool persists in his Folly he will become wise." - William Blake
  • #756
  • Jun 22, 2013 12:15pm Jun 22, 2013 12:15pm
Quoting The Fool
{quote} similar method in fx is fishing breakouts with tight stops. how tight is "tight"? Well that is a matter of skill. You can identify channels with a good possibility of breakouts to either side. Define the channel by various means, typically Boll bands with a 2 sd setting. Set your entry on the top of the band, the middle, or the bottom - all might work for an expected breakout to the topside, for instance, but the key is the stop. Setting a tight stop will mean your stop is on the other side of the expected move and (hopefully) outside...
Hey T.F., thanks for the detail reply. i understood all you wrote and i'm looking for 200-500 pip moves risking only 10 pips as a stop, its just a work in progress at the moment and i think you can time the moves. As you may of figured out with trading options you have quite a lot of time available. i KNOW 10 PIPS IS TIGHT as there are lots of false moves but its the method behind the appraoch i'm working with.
  • #757
  • Jun 22, 2013 1:07pm Jun 22, 2013 1:07pm
Quoting Cecil Gee
{quote} Hey T.F., thanks for the detail reply. i understood all you wrote and i'm looking for 200-500 pip moves risking only 10 pips as a stop, its just a work in progress at the moment and i think you can time the moves. As you may of figured out with trading options you have quite a lot of time available. i KNOW 10 PIPS IS TIGHT as there are lots of false moves but its the method behind the appraoch i'm working with.
definitely doable, examples I gave above are just some of many, lotsa guys have their methods on display here on FF. Pretty easy to try the news-trade thing, just keep your risk low and keep throwing that worm out there.

Best to pick just 1 or 2 of the most liquid pairs and study the moves on the low tf charts. I used to overlay charts down to the 5-second. I love scalping fx but it becomes too labor intensive. Options is a more gentlemanly pursuit.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #758
  • Jun 22, 2013 2:54pm Jun 22, 2013 2:54pm
Itīs good time to sell volatility ?
VIX are more than 15% above SMA 10 of vix.
Joe Corona in his Master Course use buy SPY when this happen.
Last week I had plans for sell Iron Condor en AIG, but with the FED I canīt do.
Do you have any candidates for monday ?
  • #759
  • Jun 23, 2013 1:10am Jun 23, 2013 1:10am
http://news.yahoo.com/markets-weekah...051038814.html

Speaking of breakouts, USD/INR at multi-year highs. ETF EPI has tradeable options, has broken thru support @ $16, could be heading lower fast.

Or, shoot for a rebound? Oct '13 $20 calls last traded at $0.10. EPI traded above $19 jus 4 weeks ago...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2013-06-22_usdinr.png Size: 44 KB
Click to Enlarge Name: 2013-06-22_epi.png Size: 50 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #760
  • Jun 23, 2013 1:33am Jun 23, 2013 1:33am
http://blogs.barrons.com/emergingmar...d=yahoobarrons

Also watching EWW, looking for long entries if it drops below $55, will consider some vertical spread also, Mexico will bounce with the US, if and when...
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-06-22_eww.png Size: 49 KB
"If The Fool persists in his Folly he will become wise." - William Blake
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