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Let's Trade Options

  • #2,721
  • Jan 31, 2014 2:39pm Jan 31, 2014 2:39pm
Quoting The Fool
How you doin' Cecil, what are you looking at for the coming month?
I'm ok, still looking for GS to go below $160 by Feb expiration, Rig to go below $40. I'm holding these positions from a few weeks ago. In the green on both but want to squeeze more. Looking for scalps now as many of the big cap stocks have had there earnings. looking to be more active with UNG in the future I like the way it moves. Also looking at long term plays on big caps when the price is cheap and hold into earnings next time round
  • #2,722
  • Jan 31, 2014 2:50pm Jan 31, 2014 2:50pm
Quoting Cecil Gee
{quote} I'm ok, still looking for GS to go below $160 by Feb expiration, Rig to go below $40. I'm holding these positions from a few weeks ago. In the green on both but want to squeeze more. Looking for scalps now as many of the big cap stocks have had there earnings. looking to be more active with UNG in the future I like the way it moves. Also looking at long term plays on big caps when the price is cheap and hold into earnings next time round
sounds good. UNG I hope to watch make another run toward $27 b4 I think about spreading on it, might work out per seasonal fundies I described above. I'm still tied up in spreads on YELP, NFLX, TWTR, etc. YELP & TWTR have earnings next week and looking forward to those. Have begun looking at scalps for next week or trades to catch moves after earnings. Looking at YUM for Monday...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,723
  • Jan 31, 2014 2:52pm Jan 31, 2014 2:52pm
TWTR is out next week Feb 5, I'm looking to go out 10 strikes on a long strangle and into March expiration but not paying more than $600 per strangle position

long call $75 for $3 and long put $2.90 if I can get it for Monday/ Tuesday
  • #2,724
  • Jan 31, 2014 2:53pm Jan 31, 2014 2:53pm
Quoting Cecil Gee
TWTR is out next week Feb 5, I'm looking to go out 10 strikes on a long strangle and into March expiration but not paying more than $600 per strangle position long call $75 for $3 and long put $2.90 if I can get it for Monday/ Tuesday
long $55 put
  • #2,725
  • Jan 31, 2014 2:56pm Jan 31, 2014 2:56pm
Quoting The Fool
gonna strangle AMD $3.50p/$4.50c...mostly I need the entertainment & can't look at porn while I'm at work. got in for 1/31 $0.08/$0.19 for $0.27 net debit, even money either side
Never quite got what I needed on AMD, finally sold the puts for $0.06 now. Options on very cheap stocks not worth the trouble.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,726
  • Jan 31, 2014 2:59pm Jan 31, 2014 2:59pm
Quoting The Fool
{quote} Never quite got what I needed on AMD, finally sold the puts for $0.06 now. Options on very cheap stocks not worth the trouble.
What NIR did today with GOOGLE was a great trade today, expensive stocks like that on Earnings day can pay extremely well when selling premium DOTM
  • #2,727
  • Edited 8:42pm Jan 31, 2014 3:12pm | Edited 8:42pm
Quoting Cecil Gee
{quote} What NIR did today with GOOGLE was a great trade today, expensive stocks like that on Earnings day can pay extremely well when selling premium DOTM
yup, hats off. Exactly how not to do it was illustrated by yours truly on CMG. Of course, if I had been another 2-3% out on my call sells I would have banked & been a genius too.

(CMG closed Friday at ~$552, 1.2% beyond my short puts strike at $545...)
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,728
  • Edited 10:10pm Jan 31, 2014 9:15pm | Edited 10:10pm
My tentative list of stocks on the earnings report radar for the next 1-2 weeks:

2/3: YUM
2/5: AKAM, ALL, BIDU, IRBT, MRO, P, YELP, TSO, GMCR, TWTR
2/6: EXPE, LNKD, NTGR, NUS, PM

2/10: Z
2/11: FOSL, HNT, TRIP
2/12: CTL, CSCO, WFM
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,729
  • Jan 31, 2014 9:21pm Jan 31, 2014 9:21pm
AKAM is an example of what I look for in ER trades:

- generally low volume ramps up to much higher volume at ER. You can see obviously where the ER's are on the volume axis.

- a history of large moves on ER's

- tradeable options volumes and spreads

Beyond that it's worth some effort to cultivate an educated guess re: what the sp will do on the ER. I don't have an opinion yet on AKAM. March options are not much more costly than the iv-jacked Feb's, so I might throw on a wide strangle with Mar strikes, get a quick fat winner on one side & then spread against the remainder for some added profit.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,730
  • Jan 31, 2014 10:05pm Jan 31, 2014 10:05pm
HerbalLife, Smash or Trash? Earnings out 2/18.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,731
  • Edited 10:43pm Jan 31, 2014 10:14pm | Edited 10:43pm
Fossil has got that thin volume, ER spikey look that is so fashionable.

Mar $135c long/Feb $130c short goes $1.00/$0.90 - net debit $0.10; Mar $90p long/Feb $95p short goes $1.10/$1.00, net debit $0.10.
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,732
  • Edited Feb 1, 2014 12:50am Jan 31, 2014 11:02pm | Edited Feb 1, 2014 12:50am
Quoting Cecil Gee
TWTR is out next week Feb 5, I'm looking to go out 10 strikes on a long strangle and into March expiration but not paying more than $600 per strangle position long call $75 for $3 and long put $2.90 if I can get it for Monday/ Tuesday
I am spread on TWTR Feb 7 $75c short, Feb 22 $75c long ($1.90/$5.45) - net debit $3.55. I can talk myself into believing Twitter will blow up on ER either long or short. Not much to go on with 3 months of chart. Xmas week drop shows what can happen. With the small float and current resiliency of the sp, I'd have to bet on TWTR putting in a leg up next week, though, and I wouldn't be surprised at like 2 handles. Need to do something about my crippled spread & I believe I might just double down on otm calls and try to fund them selling put premium for credit in a put spread.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,733
  • Feb 1, 2014 2:10am Feb 1, 2014 2:10am
Quoting Cecil Gee
{quote} What NIR did today with GOOGLE was a great trade today, expensive stocks like that on Earnings day can pay extremely well when selling premium DOTM
Thanks Cecil Gee - I decided to not wait until just before closing as I didn't want to take the risk of loosing a relatively higher premium at the time. Happy I did as I sold at 0.4 and noted the price just before earnings was 0.2 so I would have halved my profit if I waited until then...

I do like the higher IV during earnings season.....
  • #2,734
  • Feb 1, 2014 8:33am Feb 1, 2014 8:33am
Quoting njr
{quote} Thanks Cecil Gee - I decided to not wait until just before closing as I didn't want to take the risk of loosing a relatively higher premium at the time. Happy I did as I sold at 0.4 and noted the price just before earnings was 0.2 so I would have halved my profit if I waited until then... I do like the higher IV during earnings season.....

This has taught me if your you want to sell premium better do it 2 days prior to earnings = maximum return
  • #2,735
  • Feb 1, 2014 10:21am Feb 1, 2014 10:21am
YELP earnings out 2/5 and I am in the hole on 2/22 $65 long puts. YELP is a company that doesn't make anything, sells advertising on its websites which feature gossip. So, of course the company should be worth more than the GDP of most third-world nations.

I can get $0.80 for the $60 2/7 short puts, probably what I will do on Monday, will look to see if share price move down helps that prospect.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,736
  • Feb 1, 2014 10:36am Feb 1, 2014 10:36am
Quoting The Fool
My tentative list of stocks on the earnings report radar for the next 1-2 weeks: 2/3: YUM 2/5: AKAM, ALL, BIDU, IRBT, MRO, P, YELP, TSO, GMCR, TWTR 2/6: EXPE, LNKD, NTGR, NUS, PM 2/10: Z 2/11: FOSL, HNT, TRIP 2/12: CTL, CSCO, WFM
2/5-6 is looking like a busy stretch, with several hot booteek tech stock putting out their ER's (BIDU, P, YELP, TWTR, EXPE, LNKD).

Then NFP on 2/7.

I am thinking the last 3-days of the week might well see some good sized VIX swings, so I will be looking for a VIX pullback to exploit Mon-Tue.

Closing week was a good one for VIX scalpers - >$20 range on UVXY, ~$7 on VXX...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,737
  • Feb 1, 2014 10:52am Feb 1, 2014 10:52am
http://www.cnbc.com/id/101381590?__s...ahead+as+marke

So Yellen in, bye bye B.B. If the Feb NFP numbers are strong, "the market" will presume the Fed will likely stay on track with its incremental QE taper and stocks will continue to range down, "flight to safety blah blah", and Treasurys will keep tracking up.

If there's another "anomalous" NFP number - say a miss of 25,000 or more, then maybe Yellen puts the tapirs at bay and we're back (somewhat) to the 2013 MO - stocks rally, treasurys drop.

TLT now back to the highs of November.... ....Mar $104 puts now $0.54 ...we were just there 1/15....

I want to bite the head off this chicken so am watching hungrily, also TBT...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,738
  • Edited 12:48pm Feb 1, 2014 12:36pm | Edited 12:48pm
LNKD ER out 2/6, looks like a good target for some 2/7 call sales.

10% out gets you to ~$237, 15% to ~$248.

2/7 $235c get $4.25, $240/$3.15, $245/$2.30, $250/$1.62, $255/$1.19, $260/$0.83, $265/$0.57, $270/$0.37. $275/$0.25

...see it put on a $30 (+15%) pop long on the Aug '13 ER --- I might spread $245/$275 or $250/$275
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,739
  • Feb 1, 2014 1:23pm Feb 1, 2014 1:23pm
EXPE ER out 2/6. I am doubtful about EXPE being able to grow sp in what is getting to be a really crowded space of online companies all doing the same thing. I might put on a Feb put spread $50p short/$55p long for $0.80 debit +/-
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,740
  • Feb 1, 2014 3:20pm Feb 1, 2014 3:20pm
Quoting The Fool
http://www.cnbc.com/id/101381590?__s...ahead+as+marke So Yellen in, bye bye B.B. If the Feb NFP numbers are strong, "the market" will presume the Fed will likely stay on track with its incremental QE taper and stocks will continue to range down, "flight to safety blah blah", and Treasurys will keep tracking up. If there's another "anomalous" NFP number - say a miss of 25,000 or more, then maybe Yellen puts the tapirs at bay and we're back (somewhat)...

I think TLT will surpass $110 and head for $115
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