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Let's Trade Options

  • #2,441
  • Jan 10, 2014 1:18pm Jan 10, 2014 1:18pm
right near the close I longed next weeks twitter $55 puts for $1.30 or $130 per contract

TWTR Jan 2014 55.000 put (TWTR140118P00055000)
-OPR
1.30 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 0.35(21.21%) 8:54PM GMT



I'm looking for further downside to around $52




Twitter closed at $56.99


Twitter, Inc. (TWTR)
-NYSE

56.99 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.06(0.11%) 20:59|After Hours: : 57.00 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 0.01 (0.02%) 21:07 - Nasdaq Real Time Price
  • #2,442
  • Jan 10, 2014 10:12pm Jan 10, 2014 10:12pm
http://steadyoptions.com/articles/po...ouncements-r36
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,443
  • Jan 11, 2014 12:03am Jan 11, 2014 12:03am
ProShares splits.........includes UVXY, SVXY...

http://finance.yahoo.com/news/prosha...210000797.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,444
  • Jan 11, 2014 2:28am Jan 11, 2014 2:28am
Quoting The Fool
http://steadyoptions.com/articles/po...ouncements-r36
This is uncanny, having never seen this article this has similarities to what I'm trying to achieve with earnings
  • #2,445
  • Edited 11:08pm Jan 11, 2014 9:22pm | Edited 11:08pm
Quoting Cecil Gee
{quote} This is uncanny, having never seen this article this has similarities to what I'm trying to achieve with earnings
Do you mean the strategy that the reviewer cites?

"The baseline case is as follows: you enter long straddle position five days before the announcement, using the nearest month options, and close the position one day before the announcement. Using this strategy, they found out that the average return was -0.45%."

If so, how's that working out? It will be a simple thing to backtest, long straddle or strangle, bought X days or weeks pre-earnings, determine at what point the straddle/strangle breaks even. And the book that is the subject of the review seems to present the findings of just such an effort. If I can get it thru the local library I will read it...

As I have been journaling here, I have been concentrating on catching directional moves in the underlying at earnings and been making money doing it. Winning trades' ROI have been 2-3x that of losers. I have not been bookkeeping as well as I should, but I'd guess my results break down something like 25% losers, 25-35% at or near breakeven, 40-50% profitable.

I am going to start segregating weekly options trades in a separate account....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,446
  • Jan 11, 2014 11:14pm Jan 11, 2014 11:14pm
Quoting The Fool
ProShares splits.........includes UVXY, SVXY... http://finance.yahoo.com/news/prosha...210000797.html
..so, SVXY 2:1 and UVXY 1:4 - will bring them to within $10 of each other. Paring down SVXY especially welcome.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,447
  • Jan 12, 2014 8:10am Jan 12, 2014 8:10am
Quoting The Fool
{quote} Do you mean the strategy that the reviewer cites? "The baseline case is as follows: you enter long straddle position five days before the announcement, using the nearest month options, and close the position one day before the announcement. Using this strategy, they found out that the average return was -0.45%." If so, how's that working out? It will be a simple thing to backtest, long straddle or strangle, bought X days or weeks pre-earnings, determine at what point the straddle/strangle breaks even. And the book that is the subject of...
Entering long strangles 2-3 weeks prior to earnings but holding 2-3 weeks after too, only on selected stocks. Without giving too much away on a open forum I'm looking for 3-4x+ total outlay moves on every trade if possible. We should next week if it works, I'm more interested in when I LOSE as this brings me closer too that goal
  • #2,448
  • Jan 12, 2014 9:40am Jan 12, 2014 9:40am
Quoting Cecil Gee
{quote} Entering long strangles 2-3 weeks prior to earnings but holding 2-3 weeks after too, only on selected stocks. Without giving too much away on a open forum I'm looking for 3-4x+ total outlay moves on every trade if possible. We should next week if it works, I'm more interested in when I LOSE as this brings me closer too that goal
What are you in for earnings this week? Lots to choose from....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,449
  • Jan 12, 2014 9:44am Jan 12, 2014 9:44am
next FOMC 1/28-29, none in February

http://www.federalreserve.gov/moneta...dars.htm#20363
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,450
  • Jan 12, 2014 9:57am Jan 12, 2014 9:57am
For those that are interested, it turns out you can trade FX options with an FXDD account of minimum size $5k.
I can't find any other info on the site. It would be interesting to compare what they do with the FX spreadbet options offered by IGIndex (minimum account size of not very much at all) and the CME/Globex futures options.
One of the problems with IG is that when you open the account they allow you small bet sizes but after a couple or weeks or so they start ramping up the minimum bet sizes, which is a right old **** because it's likely you still have your training wheels on and probably will do for at least a good few months, and that's even if you're an experienced trader.

I think the IGIndex options might be based on the futures whereas the FX options offered by FXDD may or may not be something different as per http://www.investopedia.com/articles...-investing.asp.
I have no clue what I'm talking about.
  • #2,451
  • Jan 12, 2014 10:29am Jan 12, 2014 10:29am
Quoting The Fool
{quote} What are you in for earnings this week? Lots to choose from....
I've been in Citi form $51.99 on page 116/117 and GS on page 118 plus I'm FCX from page 119 I think. Check them out
  • #2,452
  • Jan 12, 2014 1:10pm Jan 12, 2014 1:10pm
Quoting Boy Wonder
For those that are interested, it turns out you can trade FX options with an FXDD account of minimum size $5k.
http://www.infinitytrading.com/futur...uro-fx-futures

not sure about that FXDD stuff, but if you want to trade CME fx futures and futures options, many (most?) of the futures brokers will accommodate you. I am assuming margin requirements are similar to what they are for the futures maintenance margin requirements, which vary per instrument - usually around $1,500 minimum for the euro e-mini FX contract.

I think at IB you can trade everything from a common equity pool if you have a minimum account size (just $10k, I think, need to verify)

https://www.interactivebrokers.com/e...b_entity%3Dllc

...good way to go if you want to trade everything, can trade futures and hedge with correlated equity options, etc.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,453
  • Jan 12, 2014 1:12pm Jan 12, 2014 1:12pm
Quoting Cecil Gee
{quote} I've been in Citi form $51.99 on page 116/117 and GS on page 118 plus I'm FCX from page 119 I think. Check them out
thanks, Cecil, I will go back & look, couldn't remember if you were out of those yet or not. Let's compare notes on C, I will probably be a scalper on it this week
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,454
  • Jan 12, 2014 2:52pm Jan 12, 2014 2:52pm
Quoting The Fool
{quote} http://www.infinitytrading.com/futur...uro-fx-futures not sure about that FXDD stuff, but if you want to trade CME fx futures and futures options, many (most?) of the futures brokers will accommodate you. I am assuming margin requirements are similar to what they are for the futures maintenance margin requirements, which vary per instrument - usually around $1,500 minimum for the euro e-mini FX contract. I think at IB you can trade everything from a common equity pool if you have a minimum account size (just...
It might be possible to trade futures with $10k with IB but I think the pattern day trader rules also apply to futures trading.
I have no clue what I'm talking about.
  • #2,455
  • Jan 12, 2014 5:10pm Jan 12, 2014 5:10pm
http://www.patterndaytraderrule.com/

http://www.sec.gov/investor/alerts/daytrading.pdf

well thanks for bringing it up again BW, made me look at the FINRA & SEC bulletins.

Evidently, they define "day trade" as buying and selling a security on the same day - trades held overnight and longer than a day are not considered "day trades"

So, I must ask the brokers again about this but it appears pretty clear that I have misapplying the rule to myself: it's not 4 or more trades in a 5-day period, rather it's 4 or more "day trades" in a 5-day period that makes you a "day trader"

I rarely have options trades open for less than 48 hours....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,456
  • Jan 12, 2014 9:07pm Jan 12, 2014 9:07pm
Quoting The Fool
{quote} What are you in for earnings this week? Lots to choose from....
JPM announces 0700 Tuesday, position before close on Monday. Seems like all the financials are sitting within 1% of their 52-wk highs....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,457
  • Jan 12, 2014 9:22pm Jan 12, 2014 9:22pm
AMD before the bell 1/21. $1 moves on a $4 stock...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-01-12_amd.png Size: 63 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,458
  • Jan 12, 2014 9:44pm Jan 12, 2014 9:44pm
earnings....also of interest week of 1/20:

V: 1/21
EBAY: 1/22
NFLX: 1/22
MSFT: 1/23
CAT: 1/27
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,459
  • Jan 12, 2014 10:06pm Jan 12, 2014 10:06pm
Quoting Cecil Gee
{quote} Opening up a trade on Citi when markets opens tomorrow, will look at volume and spreads as it will be thinly traded. Looking to long a strangle $55 call and $49 put for a total cost of $1.20 and this will be Feb 22 2014 options expiry, so plenty of time. Today's closing price was $51.92, this will be a earnings strategy Citigroup, Inc. (C) -NYSE 51.92 {image} 0.34(0.65%) 21:00|After Hours: : 51.92 0.00 (0.00%) 23:06
looks like you are itm on the strangle with $55 call @ $1.45 & $49 put @ $0.20. Are you gonna let em ride?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,460
  • Jan 13, 2014 6:40am Jan 13, 2014 6:40am
Quoting The Fool
{quote} looks like you are itm on the strangle with $55 call @ $1.45 & $49 put @ $0.20. Are you gonna let em ride?
Its Feb 22 2014 expiration. calls $152.50 are at $2.95 and Jan 24 expiration put at 46c. originally I had the $50 put for feb 22 exp but bought it back and rolled up to the 53.50 put but took the closer expiration on it as Citi had moved more than anticipated from where i purchased at $51.99. All are Longs
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