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Let's Trade Options

  • #901
  • Jun 30, 2013 11:55am Jun 30, 2013 11:55am
Hi ya,

If you don't mind answering a noobs question, how would I figure the cost of buying some fxb august 143 puts? I see the bid/ask is .30/.35. But I'm not sure what the size refers to. Is that the number of shares the contract "reserves" or all contracts 100 shares? Thanks in advance
  • #902
  • Jun 30, 2013 12:05pm Jun 30, 2013 12:05pm
Quoting The Fool
{quote} THE typical account balance you need to start in options I have seen is $2500. You need $25k to get past the pattern daytrading limitations. If you have <$25k you are limited to 3 round turn trades in any 5 running market days. You don't get leverage in options in the same way as in forex. However, "leverage" is built into the way options contracts are priced. For example, let's say you want to go long AAPL: right now AAPL is at $396. To buy 100 shares costs you $39,600. The Jul 20 $400 call sells for $8.24. Buying one contract costs you...
$2000 will get you an account with trademonster, i opened one with $500 through them using a broker i had previuosly dealt with. It also depends on strategy implied and level of clearence one is able to obtain, everything T.F. HAS SAID IS CORRECT . Tradeking also requires less but not sure
  • #903
  • Jun 30, 2013 12:07pm Jun 30, 2013 12:07pm
Quoting Starry
Cool!! New to options. Thanks for the awesome thread! Im going to try this trade out, see how it goes. Buy SPY put, $49 strike price, Expiration Sep 20 2013, take profit @ $43.30 {image} By the way, what is a NS option?
?
  • #904
  • Jun 30, 2013 12:11pm Jun 30, 2013 12:11pm
Everyone be careful trading this week as it is a short trading week due to Independence day, i may stay out of trading weekly options this week.
New weeklies may be created on wednesday instead of thursday as they tend to be due to this holiday.

Check previous graphs and assess if its worth it as sometimes we could get large volatility both ways killing your options in the process
  • #905
  • Jun 30, 2013 12:14pm Jun 30, 2013 12:14pm
china's manufacturing data due tonight, remember the drop last month in gold when this came out
  • #906
  • Jun 30, 2013 12:20pm Jun 30, 2013 12:20pm
T.F. did you notice the DOW closed beneath its 50 day, a whole candle
  • #907
  • Jun 30, 2013 12:24pm Jun 30, 2013 12:24pm
Quoting BoringIsGood
Hi ya, If you don't mind answering a noobs question, how would I figure the cost of buying some fxb august 143 puts? I see the bid/ask is .30/.35. But I'm not sure what the size refers to. Is that the number of shares the contract "reserves" or all contracts 100 shares? Thanks in advance
options cover 100 shares of the underlying. Buying 1 contract of FXB @ $0.35 will cost you $35 + commission
"If The Fool persists in his Folly he will become wise." - William Blake
  • #908
  • Jun 30, 2013 12:31pm Jun 30, 2013 12:31pm
Quoting Cecil Gee
T.F. did you notice the DOW closed beneath its 50 day, a whole candle
A bounce off the 200ma or a crash thru? I'm not sure meself. I'd bet on some good volatility in the coming week, though. Would you risk a bounce in GLD if we see good numbers out of China (not likely)?
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-06-30_dow.png Size: 59 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #909
  • Jun 30, 2013 12:42pm Jun 30, 2013 12:42pm
Quoting The Fool
{quote} A bounce off the 200ma or a crash thru? I'm not sure meself. I'd bet on some good volatility in the coming week, though. Would you risk a bounce in GLD if we see good numbers out of China (not likely)? {image}
looking on GLD monthly it just looks so bearish, may be we touch $100 on GLD in new month equivalent would be to test $1000 on Gold
  • #910
  • Jun 30, 2013 12:47pm Jun 30, 2013 12:47pm
Quoting The Fool
{quote} A bounce off the 200ma or a crash thru? I'm not sure meself. I'd bet on some good volatility in the coming week, though. Would you risk a bounce in GLD if we see good numbers out of China (not likely)? {image}
on your DOW chart it looks like a h/s formation to downside
  • #911
  • Jun 30, 2013 12:53pm Jun 30, 2013 12:53pm
Quoting The Fool
{quote} Hey, Starry, thanks for checking out the thread. Are you sure about the strike price on your SPY put? SPY trading at $160 now.... NS = "Non-Standard"....? Not sure beyond that....

Woops sorry i meant 149. silly me ! no, not doing the non-standard options, im not exactly sure what they are actually. I have edited the post.
  • #912
  • Jun 30, 2013 12:56pm Jun 30, 2013 12:56pm
Quoting Cecil Gee
{quote} looking on GLD monthly it just looks so bearish, may be we touch $100 on GLD in new month equivalent would be to test $1000 on Gold
in the "most active" options for the week I see: GDX Sep 13 $25 put and GLD Oct 13 $140 call. It has been amusing to watch the talking heads in the financial press throw up their hands and admit that they have no clue what's going on with gold.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #913
  • Jun 30, 2013 1:03pm Jun 30, 2013 1:03pm
Quoting BoringIsGood
Hi ya, If you don't mind answering a noobs question, how would I figure the cost of buying some fxb august 143 puts? I see the bid/ask is .30/.35. But I'm not sure what the size refers to. Is that the number of shares the contract "reserves" or all contracts 100 shares? Thanks in advance
Ooh my favorite, basic options are so easy to underestand ! I know its already answered , but here is my answer.

1 contract is 100 units, and it is the smallest size you can buy. So 1 contract for a put would be 35 dollars for your option.

Options are divided into a time value and a price value. The time value decreases to 0 when the contract expires. The price value of the option is the current price - strike price (for calls) or strike-current price (for puts).

Then, your minimum percent gain, assuming the price reaches your take profit at the expiration date, is (strike-current)/(ask price bought at). Your maximum loss is the amount you payed for the option.

To figure out the price of the option at any time (it includes time value), take a look at this free tool. If you set the days to expiration to 0, you will get a price of (strike-current price) for puts.

http://www.cboe.com/framed/IVolframe...ity%20Services
  • #914
  • Jun 30, 2013 1:15pm Jun 30, 2013 1:15pm
Quoting Starry
Cool!! New to options. Thanks for the awesome thread! Im going to try this trade out, see how it goes. Buy SPY put, $149 strike price, Expiration Sep 20 2013, take profit @ $143.30 {image} By the way, what is a NS option?
I am betting on the Fed following through at Jackson Hole with some confirmation about taking away the QE crack pipe. I don't expect to see big market drops until the Fall. Volatile ranging maybe, with a downtrend maybe, for the Summer.

Good luck with that trade, though.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #915
  • Edited Jul 1, 2013 8:40am Jun 30, 2013 1:44pm | Edited Jul 1, 2013 8:40am
Quoting The Fool
{quote} I am betting on the Fed following through at Jackson Hole with some confirmation about taking away the QE crack pipe. I don't expect to see big market drops until the Fall. Volatile ranging maybe, with a downtrend maybe, for the Summer. Good luck with that trade, though.

Thanks man! I expect gold is going up and i suspect an inverse relationship of gold with the rest of stocks and therefore SPY.Its small cash, no big deal.... unless i get profit ...
  • #916
  • Jun 30, 2013 2:26pm Jun 30, 2013 2:26pm
Quoting Starry
{quote} Thanks man! I expect gold is going up and i suspect an inverse relationship of gold with the rest of stocks and therefore SPY.Its small cash, no big deal.... unless i get profit, since its a 27 x trade mwahaha anyways ...
DUST weekly chart would indicate that, just spotted it
  • #917
  • Jun 30, 2013 3:19pm Jun 30, 2013 3:19pm
Quoting Cecil Gee
Everyone be careful trading this week as it is a short trading week due to Independence day, i may stay out of trading weekly options this week. New weeklies may be created on wednesday instead of thursday as they tend to be due to this holiday. Check previous graphs and assess if its worth it as sometimes we could get large volatility both ways killing your options in the process
on the other hand i may take NFLX $190 PUT for 15c or lower if price is below $207 or may not even get a chance if china print a manufacturing number below 50 today, then the market may tank in pre market tomorrow

Anyway Netflix closed at 211 ish on friday and the option
$190 put closed for 20c

NFLX Jul 2013 190.000 put (NFLX130705P00190000)
-OPR
0.20 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.05(20.00%) Jun 28
  • #918
  • Jun 30, 2013 4:04pm Jun 30, 2013 4:04pm
Quoting The Fool
{quote} options cover 100 shares of the underlying. Buying 1 contract of FXB @ $0.35 will cost you $35 + commission
Quoting Starry
{quote} Ooh my favorite, basic options are so easy to underestand ! I know its already answered , but here is my answer. 1 contract is 100 units...
thanks for the replies fellas.
  • #919
  • Jun 30, 2013 9:07pm Jun 30, 2013 9:07pm
GOLD bouncing in early Asia, good to see. I have NUGT $6 July calls and I'd like to see those profit early this week, will get out with something decent.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #920
  • Jul 1, 2013 4:50am Jul 1, 2013 4:50am
Quoting The Fool
GOLD bouncing in early Asia, good to see. I have NUGT $6 July calls and I'd like to see those profit early this week, will get out with something decent.
I have $21 and $20 calls on SLW that i hope to take profit sometime next week, july 10th at the latest. well see!
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