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  • #2,581
  • Jan 20, 2014 3:48pm Jan 20, 2014 3:48pm
Quoting The Fool
http://ecx.images-amazon.com/images/...SH20_OU01_.jpg Bought this a while back and have been giving it a read this weekend. I scanned most of the front end and closely read the latter chapters, "Trading rhe Earnings Cycle", "Trading the Expiration Cycle", and "Building a Toolset". There was enough in the last 60 pages of the book to make it worth the $20-$30 I paid for it. The "Earnings Cycle" chapter describes trading strategies for two scenarios that typically...
McMillan has some interesting strategies for earnings that involve calendars.
I have no clue what I'm talking about.
  • #2,582
  • Edited 4:15pm Jan 20, 2014 3:49pm | Edited 4:15pm
Quoting Boy Wonder
{quote} I would've thought it NFLX drops hard your spread will be worth a lot more than $0.90. Basically you're gambling that they won't drop hard. If you win, you make up to 60c. If you lose you can lose up to $9.10. Is my understanding correct? If so it seems to me you're playing with fire. I came across news today of BBY getting hit on disappointing earnings, and I think other co'.s are getting hit despite coming in in-line. I don't much follow earnings but it seems from my woeful understanding of these matters that the market is not in a forgiving...
2/22 $295p bought for $4.37 now worth $8.40, 1/31 $305p sold for $5.28 now worth ($9.02). 1/31 puts falling down the decay curve and that helps me, but the 1/31 exp date for the $305 is a week past earnings, and that's a little dicey. If NFLX drops hard below $305 I will have to buy back the $305p for a loss. The $295's will be in better profit, but not enough to make much over the $305's. I can gamble a little between earnings day and 1/31 but that's not much time.

($8.40-$4.37)+($5.28-$9.02) = $0.29 credit at the moment

Best outcome for me is nFLX stays safely above $305 until 1/31, so I keep the $5.28 credit, then continues to slide toward $300 or below thereafter. Sure, that's what will happen, and I will make more than $10 on the spread - I don't do that very often or ever....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,583
  • Jan 20, 2014 4:13pm Jan 20, 2014 4:13pm
http://www.reuters.com/article/2014/...0KQ22520140120

"In the last week, S&P 500 companies that have seen the biggest increase in shares borrowed for short bets according to Markit include Borgwarner, BB&T Corp, and Best Buy, all of which recently touched 52-week highs.
Internet retailers TripAdvisor Inc and Expedia Inc , big winners in 2013, have seen an uptick in interest as well.

"There's growing interest on (shorting) a number of stocks, concentrated in areas that did well last year," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

In 2013, just one of Astec Analytics' 10 most shorted stocks of the year made it to Markit's list of top 20 performing North American shorts - department store group J.C. Penney.

Still, going short Penney, whose sales collapsed after bad missteps by management, was enough for some.

Suvretta Capital Management, founded by a former portfolio manager for top investors George Soros and Steven A. Cohen, told clients this week its bet against Penney shares helped contribute to solid returns for its long/short strategy in the last two years.

"On the short side, we have now generated profits three times (generating a total return of approximately 130 percent) in the past two years with our J.C. Penney positions," Suvretta Chief Investment Officer Aaron Cowen said in a client letter obtained by Reuters.

Ariad Pharma and Aveo Pharma, down 64 percent and 77 percent last year, respectively, were also among the few bets that worked for short sellers in 2013. Some see more opportunities in the sector.

"Biotech is in full bubble mode, meaning companies that have no prospects of a drug continue to grind higher," said John Hempton, chief investment officer and founder of Bronte Capital, a Sydney, Australia-based asset management firm that often takes short positions.

Short sellers say they believe bulls may be getting too confident. The S&P 500's forward price-to-earnings ratio is at its highest since mid-2007.

Goldman Sachs, in a recent note, expressed concern that investors expect P/E multiples to continue to expand to a level that would match the 1997-2000 technology bubble.

"Short selling over the last two years has been a hedge against profits," said Douglas Kass of hedge fund Seabreeze Partners Management Inc. But he said recent disappointments from companies as varied as Ford, Intel, and Elizabeth Arden are signs that the "tide might be turning." "
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,584
  • Jan 20, 2014 5:06pm Jan 20, 2014 5:06pm
Quoting The Fool
{quote} 2/22 $295p bought for $4.37 now worth $8.40, 1/31 $305p sold for $5.28 now worth ($9.02). 1/31 puts falling down the decay curve and that helps me, but the 1/31 exp date for the $305 is a week past earnings, and that's a little dicey. If NFLX drops hard below $305 I will have to buy back the $305p for a loss. The $295's will be in better profit, but not enough to make much over the $305's. I can gamble a little between earnings day and 1/31 but that's not much time. ($8.40-$4.37)+($5.28-$9.02) = $0.29 credit at the moment Best outcome for...
Okay it's a calendar; I wasn't aware of that. I see your line of thinking now.
Yeah, you're right, it might work out that way (stay above 305 post earnings) and then drop thereafter. Or it might not LOL.
It's kinda funny, you've got a straight out gambler's bullish bet on on a volatile high beta stock that you are bearish on anyway in a market that you are heavily bearish on.
Anyway, good luck with it. If the P/C ratio is high I guess they'll support it post-earnings, at least long enough for you to get out.
I have no clue what I'm talking about.
  • #2,585
  • Jan 20, 2014 5:10pm Jan 20, 2014 5:10pm
Quoting The Fool
http://www.reuters.com/article/2014/...0KQ22520140120 "In the last week, S&P 500 companies that have seen the biggest increase in shares borrowed for short bets according to Markit include Borgwarner, BB&T Corp, and Best Buy, all of which recently touched 52-week highs. Internet retailers TripAdvisor Inc and Expedia Inc , big winners in 2013, have seen an uptick in interest as well. "There's growing interest on (shorting) a number of stocks, concentrated in areas that did well last year," said Brian Jacobsen,...
Yeah, most short-only hedge funds have got killed I think over the last year, or few years.
The best-performing stocks in 2013 were the crap heavily shorted ones...we all know that. I'm glad to have the experience to stay away or even long them (as I longed TWTR...but sadly using a fooked up LEAPS strategy that taught me a thing or two).
Gonna be a sideways year I think, great for just selling calls, puts, whatever, rolling them when you're wrong, kerching. Hopefully we get a bit more volatility though.
I have no clue what I'm talking about.
  • #2,586
  • Jan 20, 2014 5:16pm Jan 20, 2014 5:16pm
Quoting pipple
{quote} that is true what you say about different FCMs using different margins regardless of what CME says.....and you are also correct about IB being conservative. I have a client who has a separate account there besides what he has with me, and he showed me once when I had on a bunch of crude options that I was having around $1500 held up in margin per strangle that he put the same strangle on in his IB account and they held over $2400 per strangle! A little excessive maybe in some situations, but they don't want people to get caught sleeping...
Yeah IB, good old IB. I never made any money trading until I opened an IB account. Nice and conservative, just what I need. I need discipline, and only my broker will give it to me LOL. Go into margin deficit, you get about 10 mins, then whap, they start pulling positions! Tough love!

Seems strange that other brokers aren't allowing futures options selling. Selling options gives you a chance to hedge in a way that is virtually impossible without them afaik. But I guess maybe a lot of folks just get greedy and sell shitloads of calls and puts and then go belly up when Mr. Gamma Explosion comes a-knocking at their door. I've had him at my own door a few times now.
I have no clue what I'm talking about.
  • #2,587
  • Jan 20, 2014 7:47pm Jan 20, 2014 7:47pm
Quoting Boy Wonder
{quote} Okay it's a calendar; I wasn't aware of that. I see your line of thinking now.
Well, it was a good idea, only not so well executed. As NFLX began to drop I thought to make use of the long put margin and sell some puts for additional profit. $305 seemed pretty low when the stock was at $360. If I had waited about a week I could have caught further downside and sold 1/24 or 1/31 puts under the long put strike (<$295) for as much or more.

Or I could have laid off selling puts altogether and made >150% roi when NFLX dipped to $319 couple weeks ago....

Everything so clear with 20/20 hindsight.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,588
  • Jan 20, 2014 9:36pm Jan 20, 2014 9:36pm
Been going through my pharma stock lists, looking for candidates with good volume, tradeable optons, some discernable patterns of volatility. If anyone has any tips on pharma stock trading I'd be glad to hear them. From what I can surmise, many pharma stocks will make their major moves in response to announcements about drug trials results, FDA approvals, etc - and not so much re: earnings.

A jul '14 $3/$10 long strangle is $0.15+$0.60 = $0.75, a lot to pay for a $7+ stock, so would prolly sell 7/14 $12 calls for $0.35 for a little help...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,589
  • Edited Jan 21, 2014 1:26am Jan 20, 2014 9:57pm | Edited Jan 21, 2014 1:26am
http://www.thestreet.com/story/12187...o&cm_ven=YAHOO

my sweet tooth for shorts is starting to throb...

http://www.thestreet.com/story/12211...o&cm_ven=YAHOO
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,590
  • Jan 20, 2014 10:06pm Jan 20, 2014 10:06pm
$2Bio market cap and no revenue? Mar $20 puts are a buck....

http://seekingalpha.com/article/1932...r?source=yahoo
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,591
  • Jan 20, 2014 11:20pm Jan 20, 2014 11:20pm
some only fit to be sold....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,592
  • Jan 20, 2014 11:25pm Jan 20, 2014 11:25pm
you have to be patient with these, sometimes it takes nearly a year for the stock to go up 1,000%...such a bother....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,593
  • Jan 20, 2014 11:40pm Jan 20, 2014 11:40pm
am looking for candle stick charts for stocks and low commission spread broker do you know any it must be non US and with good leverage.
  • #2,594
  • Jan 20, 2014 11:45pm Jan 20, 2014 11:45pm
Quoting XharpScalper
am looking for candle stick charts for stocks and low commission spread broker do you know any it must be non US and with good leverage.
no sorry, I just trade US exchange-traded products thru discount brokers.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,595
  • Jan 21, 2014 9:29am Jan 21, 2014 9:29am
Just sold one 95.5C Mar CL for 1.62, as CL is getting a bit of a bump up here.
I have existing short puts and calls, and short the u/l, so I'm getting a bit more short here.
In the worst case scenario I see CL getting up to around 98, but I see that as a low probability event (which means little of course...it's all just guesswork lol), and even if so, that means I "lose" (on paper) just 0.8. I reckon there's a good chance we see chop between 92 and 95 over the coming month or two, but let's see. Hope to hold to expiry or close quite close thereto, and if it goes ITM at expiry, a-rolling I shall go.
I have no clue what I'm talking about.
  • #2,596
  • Jan 21, 2014 9:36am Jan 21, 2014 9:36am
Quoting Cecil Gee
{quote} did not get in as the price was too high last night so I've longed a strangle for next week now IV has fallen. SLB has already come out but I still can't see a clear direction with this stock hence the strangle. Long Jan 24 exp - $90 call for 86c and Long SLB $87 put. Price SLB $88.70 as of writing Schlumberger Limited (SLB) -NYSE 88.70 {image} 0.09(0.10%) 3:10PM GMT - Nasdaq Real Time Price SLB Jan 2014 87.000 put (SLB140124P00087000) -OPR 0.30 {image} 0.61(67.03%) 14:40 SLB Jan 2014 90.000 put (SLB140118P00090000)...
Closed earlier the above long strangle trade for total of $$242, I had originally bought it for $116 for every strangle, 100% up plus add commissions

SLB Jan 2014 90.000 call (SLB140131C00090000)
-OPR
2.30 http://l.yimg.com/a/i/us/fi/03rd/up_g.gif 1.10(91.67%) 15:08



SLB Jan 2014 87.000 put (SLB140124P00087000)
-OPR

0.12 0.00(0.00%) 15:08
  • #2,597
  • Jan 21, 2014 9:41am Jan 21, 2014 9:41am
Quoting Cecil Gee
{quote} the more I look at haliburton the more I think it will have a big move on earnings tomorrow, glad I'm in SLB as it will have an affect on it. Hope to see some good volatility on crude, hope its to the upside as SLB broke to the upside on there earnings
already moved over $2, has more to go in the next few days
  • #2,598
  • Jan 21, 2014 9:42am Jan 21, 2014 9:42am
Bought 100ABX, sold Feb 21 19C, Feb 21 19P, for net 17.61 on a $19 and change stock. Unfortunately I was lazy today and having just logged on I see the stock is up 2%. However, the stock closed above its 200DMA on Friday, is pushing ahead strongly today, and everybody likes to hate ABX; it's a dog of a stock but hey, I like these set-ups, so let's see.
I was going to do this with LEAPS, but the patience involved in making near-certain money would kill me, so I'm doing a monthly instead.
I have no clue what I'm talking about.
  • #2,599
  • Jan 21, 2014 9:43am Jan 21, 2014 9:43am
Big opening reversal on ES, looks like we could be set for a visit to 1820 this week...hope so.
I have no clue what I'm talking about.
  • #2,600
  • Edited 11:04am Jan 21, 2014 10:20am | Edited 11:04am
From Jan 2nd...
Quoting JoeNY
I'm in on RF. $9 Feb CALL... Earnings the week of Jan 21st... I'm out of the trade at my target % or before earnings release, whichever comes first... Riding a nice .81 Delta.. {image}
I forgot to exit on earnings. Yikes.. This could have gone real bad... Well I'm going to exit before the close just in case investors digest the transcripts tonight and change their minds tomorrow... LOL

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