Let's Trade Options | Page 89 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

BELLA SYSTEM. Let's try it, let's improve it! 118 replies

Let's Trade The News V 0.4 ! 479 replies

Any Options, Bull Options & Option Bit 39 replies

Let's Trade The News! 46 replies

Let a trade develop? 17 replies

Attachments: Let's Trade Options
Exit Attachments

Let's Trade Options

  • #1,761
  • Nov 24, 2013 1:50am Nov 24, 2013 1:50am
Quoting pipple
{quote} I would agree with that not being the best idea......part of the reason I have had good results from my strategy is I have time to put Band-Aids on boo-boos...if you will. Weeklies probably aren't as forgiving to an initial fast moving market as when I initiate a strangle in crude with 20 trading days left. I have found certain time periods....
Cecil is right about it being best to enter the weeklies early. I like being non-directional and the strangles of course give you some "insurance" against being wrong. It's tricky, though - in the TGT earnings release long strangle I showed a page or so ago I strangled, and the price went all the way to my put strike (I was "right"), but it did so too slowly and the put decayed so I lost money anyway.

You'll see Cecil's mo is typically to get in for mere pennies. In that case, you could argue that it's a waste to buy "insurance" via another leg in a strangle since your premium loss is so low anyway. However, ask CG if he ever strung together enough of those small losses to hurt and see what he says.

I am still experimenting with the weeklies. For me, it's kind of an extrapolation for the mindset I developed scalping forex. So, if I see earnings or econ news releases or event scenarios unfolding it's natural to think of short term plays to profit from those and the weeklies offer some really explosive possibilities to do that. I need variety and the weeklies will keep you on your toes, so I will keep trading them I'm sure.

Really, though, I like to focus on a rolling 30-60d + timeframe. Much more forgiving. Offers potential for spreading, which I have learned how to do well enough to save my ass somewhat when I screw up, and to multiply my profits when I am right.

Cool thing about options is there are lots of ways to skin the cat & just like in all trading you eventually find what works for you and what does not. If you have been trading e-mini options you could walk right over and do SPY options pretty much the same way. Beyond that, you'd have to experiment with some of the most liquid stock and index options to do what you do.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,762
  • Nov 24, 2013 1:58am Nov 24, 2013 1:58am
Quoting The Fool
{quote} TSLA is giving back what he took from me early in the year, when I was dumber. I can see far otm puts that are worth a write for Dec 22: $80p go for $0.42....TSLA closed the week @ $121.28
...early Monday, will prolly sell the Dec 21 $77.50 put for $0.39 to make TSLA put spread net ~$0.15 credit.

If TSLA breaks down even more with profit taking in early Dec and nears my $100 long put strike I might net >$5.00, would b a really nice Christmas present...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,763
  • Nov 24, 2013 2:06am Nov 24, 2013 2:06am
Quoting The Fool
{quote} one way I might try to catch a rotation out of spec small cap stocks into large cap is via TZA, which returns 3x % inverse of the ^RUT: ....did it, long 12/21 TZA $24 calls for $0.36
this was a mistake, shoulda been another month out, no weeklies to help me spread. Just not thought out well enough. TZA has dropped about $2 from where I bought the calls. If I can get some riskoff action in the coming week I might sell otm Dec 21 calls to try to help myself.... Dec rally might be in the cards & I'll be SOL...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,764
  • Nov 24, 2013 3:50am Nov 24, 2013 3:50am
You know, I never knew you could actually take options seriously. Most everyone says they're a bad bargain and you'll lose everything - yet here I see this detailed journal on what else.. yeah I don't know what to believe anymore <_<
uphill battle
  • #1,765
  • Nov 24, 2013 6:06am Nov 24, 2013 6:06am
Quoting The Fool
{quote} Cecil is right about it being best to enter the weeklies early. I like being non-directional and the strangles of course give you some "insurance" against being wrong. It's tricky, though - in the TGT earnings release long strangle I showed a page or so ago I strangled, and the price went all the way to my put strike (I was "right"), but it did so too slowly and the put decayed so I lost money anyway.[b][color=black] You'll see Cecil's mo is typically to get in for mere pennies. In that case, you could argue that it's a waste to buy "insurance"...
simple answer to that is NO, I have to have many many losses in a row to have a negative impact on account, don't get me wrong it can happen but this is where the power of money management and trade size comes into play. Take last weeks trades, 2 wins and 2 losses but still managed to stay ahead almost double my trade sizes. How many times have I shown trades that have move 30/40/50x + in a day in size value.
  • #1,766
  • Nov 24, 2013 10:28am Nov 24, 2013 10:28am
Quoting Cecil Gee
Just been researching AAPL, I think it due some kid of move that could be $20 each way of it current price of $519. The IV and historical volatility is fairly low making it options prices quite attractive on the weekly $525 call closed at $1.90 on Friday and the $5.15 put closed at $2.10, if on Monday I could buy the strangle for the pair for around $3.10 then I'm buying them. so i would be long the strangle position. AAPL Nov 2013 525.000 call (AAPL131129C00525000) -OPR 1.90 {image} 0.99(34.26%) 22 Nov 20:59 AAPL Nov 2013 515.000 put (AAPL131129P00515000)...
I may take a two expiry on AAPL as I've just seen there is a public holiday in the US this week. As long as I can get the long strangle for around $3 then a $20 move in either direction will more than make up for the leg that respire worthless
  • #1,767
  • Nov 24, 2013 10:31am Nov 24, 2013 10:31am
Quoting Cecil Gee
{quote} Been looking at crude and in my opinion writing calls at $105 is the better than writing puts, there's a pattern forming on the weekly chart, crude could fall to $80 in a few months time, first crude may want to test $98 and if we see a rejection from there then I stand by $80
hmm this irainian deal may just help even though its not that big of a deal as it was on the charts anyway
  • #1,768
  • Nov 24, 2013 11:10am Nov 24, 2013 11:10am
Quoting The Fool
{quote} I have not dug into the details of the deal yet. I was always just assuming it would include some opening of the oil pipe out of Iran. Could be wrong. I was kinda waiting til Sunday morning to read the news, which is what I usually do Sunday mornings...to find out. I'm not in any crude positions, but have been watching USO with an eye to short it via puts if this came through. It'll all be clear pretty soon I guess...
Fool there may be some binary options you can use to do this if you don't wanna get into the big contract. the dailies...etc. you guys seem to like those. I just don't know where besides a couple websites a few clients told me about.

don't know how liquid etc....but I imagine theres plenty of action.
I am really hoping for some action on Monday or even tonight.....if this starts moving I may just throw some limit orders in there at areas I would love to sell options at and see if I can get lucky....works sometimes.
  • #1,769
  • Nov 24, 2013 12:53pm Nov 24, 2013 12:53pm
Quoting Cecil Gee
{quote} simple answer to that is NO, I have to have many many losses in a row to have a negative impact on account, don't get me wrong it can happen but this is where the power of money management and trade size comes into play.
I believe ya buddy.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,770
  • Nov 24, 2013 12:56pm Nov 24, 2013 12:56pm
Quoting Cecil Gee
{quote} hmm this irainian deal may just help even though its not that big of a deal as it was on the charts anyway
We'll see soon enough, crude futures charts will tell the tale, probably starting in Asian Monday...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,771
  • Nov 24, 2013 1:01pm Nov 24, 2013 1:01pm
Quoting Cecil Gee
{quote} I may take a two expiry on AAPL as I've just seen there is a public holiday in the US this week. As long as I can get the long strangle for around $3 then a $20 move in either direction will more than make up for the leg that respire worthless
you mean looking out to 11/29, right? Yup, this is a very short week for traders in the US. Thursday is Thanksgiving - the exchanges are all closed. The following Friday they often run a short day, closing around noon. At any rate, most traders will be like everyone else and take Thur-Fri off together for a 4-day weekend.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,772
  • Edited 1:50pm Nov 24, 2013 1:09pm | Edited 1:50pm
Quoting Gizmosis350k
You know, I never knew you could actually take options seriously. Most everyone says they're a bad bargain and you'll lose everything - yet here I see this detailed journal on what else.. yeah I don't know what to believe anymore <_<
Personally I think that after you have moved up the options learning curve a ways it is easier to manage risk with options than with anything else. Probably options are unpopular with the masses because a) the learning curve is steep and daunting at first, and b) the entry fee to get beyond daytrader limits is kinda high (min $25k balance)
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,773
  • Nov 24, 2013 1:11pm Nov 24, 2013 1:11pm
Quoting The Fool
{quote} you mean looking out to 11/29, right? .
oops I meant 12/06...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,774
  • Edited Nov 25, 2013 1:00am Nov 24, 2013 1:44pm | Edited Nov 25, 2013 1:00am
Quoting The Fool
My to-do list for the week: 1) sell put leg of TSLA credit spread, look for 11/22 or 11/29 and min $0.15 credit. 2) sell SSO puts, another leg of a debit spread with Jan $82 long puts, look at 11/29, 12/06 or later, debit now $1.00 down from $1.44 3) this week's earnings: GMCR, consider a wide short strangle; HD (11/19); TGT (11/21); P (11/21); CRM (action b4 close Monday) 4) Close watch: MJN, UNG, USO, GDX, NUGT, DUST, GLD, PHM, TLT, TBT, SDS, SSO, FB, etc 5) Consider 60 - 90 day long calls maybe strangles on EWZ, FXI
To-do for short week of 11/25:

1) sell another put leg of TSLA credit spread, look at 11/29 $105 lt $0.36; 12/06 $95p lt $0.46, 12/13 $90 lt $0.61; watch for moves down Mon-Tue
2) sell SSO puts, another leg of a debit spread with Jan $82 long puts, look at 12/06 $92, lt $0.25; watch for moves down Mon-Tue
3) Look to sell TZA Dec calls on any move up
4) watch USO & other US oil patch stocks, consider XLE
5) consider HPQ for an earnings release play (~23/27 12/21 long strangle @ $0.65 net debit would get >$1.00 if either strike hit in a week.)
6) consider TLT/TBT strangles for Jan or later
7) Consider RENN or ZNGA strangles with 2+ month out expiries
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,775
  • Nov 24, 2013 2:24pm Nov 24, 2013 2:24pm
XLE looks set for a $4 drop by yearend
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-11-24_xle.png Size: 49 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,776
  • Nov 24, 2013 3:58pm Nov 24, 2013 3:58pm
Quoting pipple
{quote} I think this may be the final thing this crude market needs to justify moving it down more and settling it into a lower range. I still don't trust it, and would not be surprised if a bounce up then down happens. Regardless, I am positioned with 2 calls for every 1 put (roughly) because I was expecting this as well. Just didn't know when. I have a few landmen oil clients who keep telling me they are pulling the stuff out of the ground at alarming rates.....and they expect the 80s for WTI in no time.....and for the spread between Brent and...
I think also, that with agree with Iran, mots things are quite in region.
So, with oil sands and boost in xale gas in US, and some descrease in some economys... I think Oil go down.
  • #1,777
  • Nov 24, 2013 7:33pm Nov 24, 2013 7:33pm
Quoting Gizmosis350k
You know, I never knew you could actually take options seriously. Most everyone says they're a bad bargain and you'll lose everything - yet here I see this detailed journal on what else.. yeah I don't know what to believe anymore <_<
put it this way Giz....I have been so happy with what options have done for me over the years in commodities that I came fishing around this thread to find out more about stocks and ETFs....there is definitely money in them....you have to use good money management and like I say over and over again....equal parts humble and aggressive.
Cecil and Fool buy more options than I ever did...but they actually have me looking at buying some cheapies in the commodities market here and there. the risk is low, and pre-defined....and no margin.
I kind of have been somewhat swayed by their approach....not that I will abandon something that has worked for me for so long.....but I think there is something to it.
When I entered this thread I said "buying options is a suckers bet"....and I meant commodities....but I never really considered doing it the way they do it.....kind of stark opposite to my strategy.....but nothing wrong with taking a shot here and there when you are up. I kinda like it. Sort of like a futures contract with a pre-defined stop that you might not get whipsawed out of (if you can follow that)
  • #1,778
  • Nov 24, 2013 7:37pm Nov 24, 2013 7:37pm
already seeing a lot of action in oil.....I am thankful that I am so far away in puts....gives me time to adjust if need be. I feel like this may jerk back up and bounce off those big MAs....then down for the count
I will surely short a futures if this goes up far enough....hell I may just short one anyway at some point and just hold it longer term. In the morning when the market settles in I will give you guys an account snapshot....show where I stand/what Im gonna do/what I may have done overnight
now Im gonna watch broncos/pats, and the oil charts of course
  • #1,779
  • Nov 24, 2013 7:58pm Nov 24, 2013 7:58pm
actually just threw in some GTC orders to buy back the 105s I had left over at $10....should have a fill by tomorrow end of trade I imagine. wanna free up the margin.
  • #1,780
  • Nov 24, 2013 11:31pm Nov 24, 2013 11:31pm
Quoting pipple
now Im gonna watch broncos/pats, and the oil charts of course
what a war, huh? I'm counting down 8 days til Saints vs Seahawks.
"If The Fool persists in his Folly he will become wise." - William Blake
11 traders viewing now