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Let's Trade Options

  • #1,961
  • Dec 2, 2013 3:18pm Dec 2, 2013 3:18pm
Quoting pipple
{quote} that would be the worst thing ever for me Cecil so I hope this thing just keeps riding itself down. not that I wont turn a profit if it does that.....but I will have to work harder for it.....and who the hell likes to do that.
I've said it before, this is why selling options for time premium is a very hard game, whether you sell at the money, out of the money or far out of the money. You think it's easy until bam, the market reverses hard in one direction and you're left feeling like a eejut for selling calls or puts at what turn out to have been very cheap prices indeed. There's no free lunch. Deltas of 20% etc. give a misleading sense of security. You gotta expect every time that this time may be that one in 5 time that prices go ballistic in one direction.
I'm speaking for myself by the way. I thought I'd found the path to riches writing options but that is very far from the case. It's fookin difficult.
There's this geezer on the USDJPY board who sells the far OTM JPY options, who posted a couple of weeks or so back something along the lines of "the options market blah blah is saying x% chance of 101 in the next two weeks" blah blah, as if to say, "the options market is saying it ain't going there so it ain't going there" I thought bullshit mate, the options market ain't no special prognosticator when it comes to movement, save perhaps for pre-earnings when they'll ramp up the prices so high that it's very difficult to make money by buying options.

Just my 2 cents on this crazy game we call writing options. Best of luck to all
I have no clue what I'm talking about.
  • #1,962
  • Dec 2, 2013 3:32pm Dec 2, 2013 3:32pm
I'm in nothing new, just keeping an eye on the indices. I'm generally short the market, with spreads hedging the short positions. So I'll do great if everything slides...just don't slide too far too fast.

Heavy dayjob workload now, I might be scarce - have a good week everybody.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,963
  • Dec 2, 2013 4:16pm Dec 2, 2013 4:16pm
Quoting Boy Wonder
{quote} I've said it before, this is why selling options for time premium is a very hard game, whether you sell at the money, out of the money or far out of the money. You think it's easy until bam, the market reverses hard in one direction and you're left feeling like a eejut for selling calls or puts at what turn out to have been very cheap prices indeed. There's no free lunch. Deltas of 20% etc. give a misleading sense of security. You gotta expect every time that this time may be that one in 5 time that prices go ballistic in one direction....
I dislike those % probability systems. I never can reconcile in my head where they justify telling people these #s on those things.
Crude is at a pivotal point on my chart right now......even still....I like where Im at.
remember you cant just jam up the account with a 90% M/E ratio.......don't misconstrue me saying anything negative about crude's movement as that I am worried over this......this movement is necessary most times to make money.
you cant run from it......most times the fearless selling of call into a rising market or a put into a falling market turns out to be awesome in the end. just don't get married to the trade......roll it and don't sweat it.
market cant be 2 places at once......and expiration day will come! tick tick tick tick tick.
  • #1,964
  • Dec 2, 2013 7:01pm Dec 2, 2013 7:01pm
Quoting pipple
......most times the fearless selling of call into a rising market or a put into a falling market turns out to be awesome in the end. just don't get married to the trade......roll it and don't sweat it. market cant be 2 places at once......and expiration day will come! tick tick tick tick tick.
I am making an ark of pipple's nuggets of wisdom, choice few right there.

Go Hawks!
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,965
  • Dec 2, 2013 8:54pm Dec 2, 2013 8:54pm
Quoting The Fool
{quote} I am making an ark of pipple's nuggets of wisdom, choice few right there. Go Hawks!
haha thanks buddy.
truth be told this is the hardest part of trading. anyone can get in....then what.....and the people who wanna trade for themselves think there is something they just don't get or that there is this system or holy grail blah blah blah. the truth is it is just as crazy and hard as you think it is, and nobody has the perfect system.
for my options approach its kind of like, ok here's your position....now manage the risk.
as I post on here I am trying to be transparent and show the losses as well as the wins.....to prove that the losses, the anxiety, and the messes are necessary (in my opinion) to any long term success in any market.
by all means if someone has a better plan and wants to share....I am all ears....I just don't know any better way than to do it the way I currently do, and it may seem aggressive at times, but I swear it works if you are honest (with yourself) and consistent.
as it sits now:
the same positions as my last update all still exist, except the 3 puts at 1290 have been rolled to 4 puts at 1260 for $562.50 each
now hopefully crude stops running so much in the overnight.....and I can enjoy the rest of this game
  • #1,966
  • Dec 2, 2013 9:28pm Dec 2, 2013 9:28pm
Quoting pipple
{quote} the truth is it is just as crazy and hard as you think it is, and nobody has the perfect system. for my options approach its kind of like, ok here's your position....now manage the risk.
right on. What I like about options is you have (yep) options, great flexibility allowed to work your trade. I think I remember you saying you used to (or still do) enter trades at random then see how you could work your way into or out of them in the best way? And you're not the first pro trader I have heard say that, either, so that must be some old trader boot camp basics, applies to any market. Anyway, I am working the trades I am in - it's nuts for several of my accounts though because they're well under the daytrader limit, so doing 3 rt/week obviously leaves alot to be desired. Nothing to be done tho except work/wait til they grow.

How bout Russell Wilson, though? 2nd year guy taking D. Brees to school. Are you old enough to remember Fran Tarkenton? RW reminds me of him...if Brees can work out of a 20 point hole and win this game in freezingass rainy deafening Seattle I will be truly amazed.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,967
  • Dec 2, 2013 10:19pm Dec 2, 2013 10:19pm
Quoting The Fool
{quote} right on. What I like about options is you have (yep) options, great flexibility allowed to work your trade. I think I remember you saying you used to (or still do) enter trades at random then see how you could work your way into or out of them in the best way? And you're not the first pro trader I have heard say that, either, so that must be some old trader boot camp basics, applies to any market. Anyway, I am working the trades I am in - it's nuts for several of my accounts though because they're well under the daytrader limit, so doing...
Yes, absolutely to the trading out of random positions thing. One of the few guys who taught me any actionable skills in this business introduced me to doing that.....that singular action alone is worth its weight in gold. As a general exercise I recommend that to anyone serious about this stuff. Its akin to going to the driving range though. You think you've got it down, but the lies are never that perfect on a real course.
I never saw Tarkenton live, but as a big NFL history buff I know him well. Wilson is just underwhelming enough sometimes to make all the talking heads question him. Seattle is tough. Kinda like a better version of KC. On my short list of superbowl contenders. I do however need N.O. to win, or a total of 55 points and a Seattle win, for gambling purposes of course...lol.
  • #1,968
  • Dec 2, 2013 11:09pm Dec 2, 2013 11:09pm
Quoting pipple
Yes, absolutely to the trading out of random positions thing. One of the few guys who taught me any actionable skills in this business introduced me to doing that.....that singular action alone is worth its weight in gold. As a general exercise I recommend that to anyone serious about this stuff.
OK, I am going to do some in real time here. Probly not this week though, screen time limited.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,969
  • Dec 3, 2013 9:39am Dec 3, 2013 9:39am
Quoting Cecil Gee
{quote} had to take this but in for 17c, USO is trading at $33.71 USO Dec 2013 34.000 call (USO131206C00034000) -OPR 0.17 {image} 0.03(21.43%) 20:25 33.71 {image} 0.25(0.75%) 20:41 - Nasdaq Real Time Price
will be looking to close out this trade once I see over 40c/$40 per contract, current USO price is $34.20. I bought yesterday for 17c/ $17 per contract

United States Oil (USO)
-NYSEArca
34.20 http://l.yimg.com/a/i/us/fi/03rd/up_g.gif 0.52(1.54%) 3:37PM GMT - Nasdaq Real Time Price
  • #1,970
  • Dec 3, 2013 10:09am Dec 3, 2013 10:09am
Quoting Cecil Gee
{quote} will be looking to close out this trade once I see over 40c/$40 per contract, current USO price is $34.20. I bought yesterday for 17c/ $17 per contract United States Oil (USO) -NYSEArca 34.20 {image} 0.52(1.54%) 3:37PM GMT - Nasdaq Real Time Price
closed out the trade at 52c or $52 per contract, USO at $34.38 went as high as $34.47

USO Dec 2013 34.000 call (USO131206C00034000)
-OPR
0.52 http://l.yimg.com/a/i/us/fi/03rd/up_g.gif 0.35(205.88%) 15:48
United States Oil (USO)
-NYSEArca
34.38 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.70(2.08%) 16:06 - Nasdaq Real Time Price
  • #1,971
  • Dec 3, 2013 10:14am Dec 3, 2013 10:14am
Apart from the cold weather I think this increase in crude may have something to do with the big increase sales in mobile and online shopping which would mean much more transportation in movement more demand for fuel
  • #1,972
  • Dec 3, 2013 10:27am Dec 3, 2013 10:27am
USD is looking weak to me so it may bring crude down a little, wonder if the currencies will go higher? eur and gbp. To much data out in the next few days
  • #1,973
  • Dec 3, 2013 10:45am Dec 3, 2013 10:45am
I am still in the HPQ 22p/28c Dec 21 strangle from last week. Had a few chances to sell the call leg for near be on the whole strangle, but kept thinking it looked like it would break out and get to a new year's high (>$27.78). Did that this morning and promptly got sold back down to $27.40. I shoulda sold the calls the first time I got to be and been done with it....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,974
  • Dec 3, 2013 10:59am Dec 3, 2013 10:59am
Quoting Cecil Gee
To much data out in the next few days
Any kind of shock low or high in the NFP I believe will sink the US indices. Might be worth playing some cheap strangles for following (12/13) week expiry. Likely candidates are.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,975
  • Dec 3, 2013 11:04am Dec 3, 2013 11:04am
Quoting The Fool
{quote} Any kind of shock low or high in the NFP I believe will sink the US indices. Might be worth playing some cheap strangles for following (12/13) week expiry. Likely candidates are.....
Any close below 1787 I'll be shorting on the S&P even before the data is released we're at 1792 today, as stated earlier the $ looking too weak. Just a waiting game for now
  • #1,976
  • Dec 3, 2013 11:07am Dec 3, 2013 11:07am
Quoting Cecil Gee
{quote} Any close below 1787 I'll be shorting on the S&P even before the data is released we're at 1792 today, as stated earlier the $ looking too weak. Just a waiting game for now
meant to say longing puts, we're option traders
  • #1,977
  • Dec 3, 2013 12:19pm Dec 3, 2013 12:19pm
well that was a fun little move.
I bought back all the 99s at $500 so the loss on those was around $250 roughly each.....and even though I wasn't planning on it I sold 91.50s for $230 each but also bought back the 87.50s at $40 each for a $290 profit per contract.
so now I sit with 100s for calls
91.50s for puts
plus all the soybeans.
officially at a loss for the cycle(on paper)....still 9 days left and a ton of margin.
may sound stupid to some that I bought back the 87.50s at $40 each....but think of it like this.....I booked a nice profit, and cant give any of that back now. Sure I left $40 per option on the table.....but now that I have re-strangled and fully expect to be more active in the next few days......I think it was for the best.
every time still to this day that I am forced to reposition like that it still rattles you.....I don't care how long I have done it or will do it....it feels awful at the time. But....it has to be done....exp is coming one of these days right.
I still have enough short option value alive to turn a profit out of this, and I am far from done writing options. I actually like the 91.50s and 100s better than the other strangle considering where we are for spot. lot of action to be almost breakeven. should have just not traded at all right? haha
  • #1,978
  • Dec 3, 2013 12:45pm Dec 3, 2013 12:45pm
May have to take some positions sooner than I thought, considering longing puts on SPY and FB (s&p) and Facebook, there also a few others

SPY is trading at 179.41 and facebook is trading at $46.42

SPDR S&P 500 (SPY)
-NYSEArca
179.41 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 1.12(0.62%) 18:39 - Nasdaq Real Time Price
Facebook, Inc. (FB)
-NasdaqGS
46.43 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 0.63(1.34%) 18:43 - Nasdaq Real Time Price
  • #1,979
  • Dec 3, 2013 3:27pm Dec 3, 2013 3:27pm
Quoting The Fool
I am still in the HPQ 22p/28c Dec 21 strangle from last week. Had a few chances to sell the call leg for near be on the whole strangle, but kept thinking it looked like it would break out and get to a new year's high (>$27.78). Did that this morning and promptly got sold back down to $27.40. I shoulda sold the calls the first time I got to be and been done with it....
still flirting with be on the HPQ strangle, just a small trade. Bigger news in my book is TSLA, it up 14% today, lt at $144.40. So I have a spread I've been working - currently long Dec 21 $100p (bought for $0.85 now worth $0.21) and Dec 13 $106p sold for $0.60 now worth $0.08. Will be watching tomorrow for any further upside and will buy back 12/13 $106p for >$0.50 net gain, & immediately sell 12/13 $118p for $0.25-$0.30.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #1,980
  • Dec 3, 2013 3:44pm Dec 3, 2013 3:44pm
this is just crazy with the oil today. good thing for beans.
this changed the whole landscape of the options chain in hours. I mean really changed it. totally nuts.
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