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Let's Trade Options

  • #1,641
  • Nov 19, 2013 7:14am Nov 19, 2013 7:14am
Quoting Boy Wonder
{quote} It's a lot harder to write options (profitably) for time premium than many think.
'sup BW? - hope you're doing well. Gotta go out for a dam inspection, might make it back by the bell....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,642
  • Nov 19, 2013 7:48am Nov 19, 2013 7:48am
T.F. i agree with PIPPLE about considering writing just naked strangle options. Take a look at that strategy as opposed to buying and selling at the same time. For me I'm' comfortable with the gamma scalps directional moves but it took me 16 months to work out
  • #1,643
  • Nov 19, 2013 7:50am Nov 19, 2013 7:50am
Hey Fool. This guy is pretty good, some good educational stuff on options and futures. He does a show. Tom Sosnoff, Think-Or-Swim founder, sold to TD Ameritrade for 1/2 a billion. Now runs this network. When I wanted to expand my horizons with this stuff a little, I found it pretty good. Great idea for a thread BTW. We forexers are too segregated.


https://www.tastytrade.com/tt/shows
  • #1,644
  • Nov 19, 2013 8:15am Nov 19, 2013 8:15am
so much news coming out in the next 24 hours, we could see some explosive volatility. Already in strangles in TLT and GDX as posted yesterday
  • #1,645
  • Nov 19, 2013 8:43am Nov 19, 2013 8:43am
Quoting The Fool
{quote} 'sup BW? - hope you're doing well. Gotta go out for a dam inspection, might make it back by the bell....
Hi mate, just trying to sit back a bit. It's a mixed bag for me. I chose to be assigned on a bunch of short options over the last few weeks and am trying on many of them not to sell options against the delivered at what feels like precisely the wrong time. But the worst thing is then you look back at the end of the week and you think, gee, I could've sold those weeklies, they expired worthless in the end anyway.

It's a tough game this.
I have no clue what I'm talking about.
  • #1,646
  • Nov 19, 2013 9:37am Nov 19, 2013 9:37am
Im still sitting in crude. book looks like this currently
105 Jan calls sold for $410 worth $30 (1/3 the # of the 87.50/100 strangle)
100 Jan calls sold for $370 worth $150
87.50 Jan puts sold for $330 (or $340 depending on when I got in) now worth $300

even after taking a small loss in the SP everything looks good. I can help but feel bearish on crude, and I would love to write more calls, but the premium just isn't there to make me feel comfortable, so I will sit tight for now. If it starts to drop, I would need some momentum to be scared out, but remember that isn't necessarily a bad thing. We are at the point in this cycle where if I had to roll my puts down to an $85 or so then I would be more than comfortable with that......but for now nothing to do.
I don't count this other trade for what I am showing on here, since I only did it in a couple accounts, but for my larger people I sold some Feb 101 calls on 11/6 for $1070 each and they are now trading at $500. This is not typical of my strategy because the margin was so high on the position and it was more of a rogue trade not part of a bigger strangle, but again, its kind of all one position anyways.
I did that for lack of any good premium on any other calls. Right now I would have to write around a 97.50 or 98 to find around a $400 option for Jan calls, and I am uncomfortable with that right this second. That may change. As far as my entries go, I usually gravitate towards a $350-$550 crude option.
It would be nice to get a little pop up in crude over the next 48 hours or so. I would like to write more calls on Friday, but who knows.
  • #1,647
  • Nov 19, 2013 11:11am Nov 19, 2013 11:11am
Quoting pipple
Im still sitting in crude. book looks like this currently 105 Jan calls sold for $410 worth $30 (1/3 the # of the 87.50/100 strangle) 100 Jan calls sold for $370 worth $150 87.50 Jan puts sold for $330 (or $340 depending on when I got in) now worth $300 even after taking a small loss in the SP everything looks good. I can help but feel bearish on crude, and I would love to write more calls, but the premium just isn't there to make me feel comfortable, so I will sit tight for now. If it starts to drop, I would need some momentum to be scared out,...
Interesting to see your positioning. I'm currently long the underlying and short ATM calls. Seems the world and his wife are bearish crude; the time to be bearish was at $110 IMO not at $94.
I have no clue what I'm talking about.
  • #1,648
  • Nov 19, 2013 11:57am Nov 19, 2013 11:57am
Quoting Boy Wonder
{quote} Interesting to see your positioning. I'm currently long the underlying and short ATM calls. Seems the world and his wife are bearish crude; the time to be bearish was at $110 IMO not at $94.
crude ain't go anywhere yet is sitting right in between the 50 and 200 day and the range is getting tighter in there, 91.83 - 97.62. weekly chart
  • #1,649
  • Nov 19, 2013 12:04pm Nov 19, 2013 12:04pm
Quoting Boy Wonder
{quote} Interesting to see your positioning. I'm currently long the underlying and short ATM calls. Seems the world and his wife are bearish crude; the time to be bearish was at $110 IMO not at $94.
I was bearish then too. wrote a crapload of calls. even had to buy back and roll out my 92.50 puts for DEC, but still made money on the downside positions rolled to 89. wasn't naked for long....don't like to be
When I said bearish I didn't mean the bottom is falling out. price action is telling me there is a better chance to see 90 than 100 unless something fundamental happens. a few posts ago I explained that I am expecting some consolidation and bottoming out......which is what is happening. that is good option writing weather for me. while it is figuring itself out I will have a potential double digit % cycle of gains.

I may short futures if it gets high enough. somewhere around 94.50.....we will see. maybe write deeper OTM calls. I doubt I can get enough for a 99 to make it worth my trouble, but ya never know. Price action will dictate what I do. I am amazed at how much juice has already come out of my 100s. market telling us something?? floor telling us something?? kind of like last week when soybeans ran real hard but the options didn't barely move at all....now beans dropped. the story is in the price action and the options pricing chain.
im pissed I took off my SP strangle, but probably better off. im being transparent so other traders who manage their own accounts can see that you cant get married to this stuff..........admit defeat often for the greater good.
  • #1,650
  • Nov 19, 2013 12:07pm Nov 19, 2013 12:07pm
Quoting Cecil Gee
{quote} crude ain't go anywhere yet is sitting right in between the 50 and 200 day and the range is getting tighter in there, 91.83 - 97.62. weekly chart
I hope it goes somewhere short term....so I can write something deeper. I might just write some cheapies in high quantity on Friday. if I can get $300 for a 99....I may do it.
I also might just sit back and collect my ransom
  • #1,651
  • Nov 19, 2013 12:48pm Nov 19, 2013 12:48pm
Quoting pipple
{quote} I was bearish then too. wrote a crapload of calls. even had to buy back and roll out my 92.50 puts for DEC, but still made money on the downside positions rolled to 89. wasn't naked for long....don't like to be When I said bearish I didn't mean the bottom is falling out. price action is telling me there is a better chance to see 90 than 100 unless something fundamental happens. a few posts ago I explained that I am expecting some consolidation and bottoming out......which is what is happening. that is good option writing weather for me....
All good points. TBH 90 does look a reasonable odds target.
I have no clue what I'm talking about.
  • #1,652
  • Nov 19, 2013 12:58pm Nov 19, 2013 12:58pm
a'ight I'm with my man Cecil in a 11/22 TLT long strangle, got in $103.50/$105.50 for $0.12/side. Let's see if the Fed heads can move the bond market...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,653
  • Nov 19, 2013 1:43pm Nov 19, 2013 1:43pm
USD/JPY H4 CHART

It is time for sudden drops to the 96.15
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpyh4.png Size: 48 KB
  • #1,654
  • Nov 19, 2013 2:10pm Nov 19, 2013 2:10pm
Quoting davidsayli
USD/JPY H4 CHART It is time for sudden drops to the 96.15 {image}
possible if we get a sudden dose of riskoff
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,655
  • Nov 19, 2013 3:09pm Nov 19, 2013 3:09pm
What happend to ONVO..?
  • #1,656
  • Nov 19, 2013 3:42pm Nov 19, 2013 3:42pm
Quoting Brasil
What happend to ONVO..?
Somebody made some money, somebody lost some. 30MM shares traded with only 78MM outstanding...

http://www.fool.com/investing/genera...rganovo-h.aspx
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,657
  • Nov 19, 2013 3:46pm Nov 19, 2013 3:46pm
Quoting davidsayli
USD/JPY H4 CHART It is time for sudden drops to the 96.15 {image}
That does look good David. might be a good time to write some puts on the fx futures (inverted JPY/USD) (6J)
just priced out a 96.50 was $337.50.........may even go further out. see what it looks like tomorrow.
  • #1,658
  • Nov 19, 2013 4:04pm Nov 19, 2013 4:04pm
How we can trade the (usd/jpy) in option?
  • #1,659
  • Nov 19, 2013 7:18pm Nov 19, 2013 7:18pm
Quoting Brasil
How we can trade the (usd/jpy) in option?
look for the 6J on your futures platform, but remember that it is inverted for fx futures, so if you want the forex to go down, the futures you would want to go up......so, if you were going to agree with what David is saying, you could write a put, or buy a call
I would stick with January....which trades off the March contract. 6JF14 should be the symbol....or obviously you could go as far out as you wish.
currency options tend to give very little bang for the buck IMO when selling. For example, today a January 96.50 put (when the market was at 99.88) was only trading for $337.50 roughly......which I don't think is real sexy for being so damn close to spot price, but to each his own.
it almost seems like a better risk/reward to buy a deeper OTM call for a further away month, hoping for future appreciation.....and maybe tackle it that way. I haven't looked at it yet, but I will tomorrow, and if the crappy premium that the puts have is any indication of the rest of the options, it may just make sense. cant hurt to buy 1 right??? I am certain I have thrown more money at way worse ideas in my life.
  • #1,660
  • Nov 19, 2013 7:30pm Nov 19, 2013 7:30pm
Quoting pipple
{quote} look for the 6J on your futures platform.....
it's all one trade. long yen is probably going to be short risk, so short indices or long VIX, or.... anyway, with decent leverage still available for fx trading in many countries i'd tip the balance toward just trading spot for the currencies. Liquidity, ability to micro-adjust positions, etc. I just can't trade fx with leverage in the retirement accounts, otherwise I would trade fx still...
"If The Fool persists in his Folly he will become wise." - William Blake
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