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Let's Trade Options

  • #2,761
  • Feb 4, 2014 3:15pm Feb 4, 2014 3:15pm
Quoting The Fool
Stock futures all green, can look for quick retrace trades. UVXY will give back $10-$15, but would need to get in long puts in pre-market trade.
UVXY gave up $5-7 but has gotten back 1/2 of that AH. Short VIX is a dicey trade & probably will be until after NFP.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,762
  • Feb 4, 2014 3:33pm Feb 4, 2014 3:33pm
Quoting The Fool
{quote} You are looking at selling calls, I presume? I think there's a good possibility TWTR may put on a good show with a pop long. They are freeing up 10mio shares to be sold next week - these are shares held by insiders. (Do your own DD on this - it's just what I have read.) Wouldn't surprise me if it spikes up at earnings, holds til next week & then sells off. For that reason maybe I will think of selling 2/14 $85 calls, but I'd wait til after the move to get in. Of course, I could be wrong and it tanks on the ER.
Hi The Fool - Yes, selling the calls. Thanks for the head ups on the share to be sold next week. You are better informed that I am. I'll keep an eye on it and do a bit more research as you suggest. Thanks again....
  • #2,763
  • Feb 4, 2014 6:25pm Feb 4, 2014 6:25pm
3 month USDJPY strangle idea that I've priced up, looking to receive 125bps, with a net delta of 58k, 0 delta hedged at 102.7 or so.

But looking to buy small fwd position, to push 0 delta closer to 103.00/25 (so maybe 35k in spot)

vega/theta is about 18, so ideally at 9.5/11% vol its a little too low, but I'm ok holding a mtm loss. Will look to delta/gamma hedge around strikes though.
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY strang;e.png Size: 67 KB
  • #2,764
  • Feb 4, 2014 8:44pm Feb 4, 2014 8:44pm
Quoting The Fool
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 {image}
still looking good to me at $275/$245
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,765
  • Feb 4, 2014 10:05pm Feb 4, 2014 10:05pm
Hey, Jeremy.

What is that your using in the picture, I'm curious!
There are those who know, and there are those who don't know.
  • #2,766
  • Feb 5, 2014 3:49am Feb 5, 2014 3:49am
Quoting JeremyWS
3 month USDJPY strangle idea that I've priced up, looking to receive 125bps, with a net delta of 58k, 0 delta hedged at 102.7 or so. But looking to buy small fwd position, to push 0 delta closer to 103.00/25 (so maybe 35k in spot) vega/theta is about 18, so ideally at 9.5/11% vol its a little too low, but I'm ok holding a mtm loss. Will look to delta/gamma hedge around strikes though. {image}
Hey JerermyWS - Good to meet another options seller on this forum!!! I'm thinking of a similar strangle on this pair but I will wait post NFP report this Friday to see which short term direction is set and if I can leg in for a better premium. However, I am looking at a shorter timescale - somewhere around 45 to 50 DTE as Theta starts to decay around 45DTE
  • #2,767
  • Feb 5, 2014 4:36am Feb 5, 2014 4:36am
Quoting palabara
Hey, Jeremy. What is that your using in the picture, I'm curious!
it is an fx options calculator from reuters eikon
  • #2,768
  • Feb 5, 2014 7:04am Feb 5, 2014 7:04am
Quoting JeremyWS
{quote} it is an fx options calculator from reuters eikon
Ooh, What broker do you use for your Fx Options?
There are those who know, and there are those who don't know.
  • #2,769
  • Feb 5, 2014 9:18am Feb 5, 2014 9:18am
Quoting njr
{quote} Hi The Fool - Yes, selling the calls. Thanks for the head ups on the share to be sold next week. You are better informed that I am. I'll keep an eye on it and do a bit more research as you suggest. Thanks again....
Position Filled:

SOLD 105 TWTR Feb07'14 90 CALL @AMEX @ 0.15

Remaining 45 contracts pending.

Current is 65.88. Earnings would need to be dazzling enough to rocket the price by 36% to hit the 90 strike
  • #2,770
  • Feb 5, 2014 9:38am Feb 5, 2014 9:38am
Quoting njr
{quote} Position Filled: SOLD 105 TWTR Feb07'14 90 CALL @AMEX @ 0.15 Remaining 45 contracts pending. Current is 65.88. Earnings would need to be dazzling enough to rocket the price by 36% to hit the 90 strike

woooww! nice way to play with probabilities...
  • #2,771
  • Feb 5, 2014 9:45am Feb 5, 2014 9:45am
Quoting brokerr
{quote} woooww! nice way to play with probabilities...
At current probability levels, about 2 Standard Deviations out....i.e. 97.6% Probability that it will expire OTM and 2.4% probability that is will expire above 90 strike...
  • #2,772
  • Feb 5, 2014 10:24am Feb 5, 2014 10:24am
Quoting Cecil Gee;7259223[B
]Opened a new scalp 20 mins ago on LVS. long $73.50 put for Fridays expiration at $30 per contract or 30c[/b]. Current price on LVS is $75.09 Las Vegas Sands Corp. (LVS) -NYSE 75.09 {image} 0.58(0.78%) 20:49 - Nasdaq Real Time Price LVS Feb 2014 73.500 put (LVS140207P00073500) -OPR 0.30 {image} 0.46(60.53%) 20:16
Finally closed up the above trade, Closed for $260 per contract, I bought yesterday for $30 per contract making a 8x return on LVS.

LVS Feb 2014 73.500 put (LVS140207P00073500)

-OPR

2.60 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 2.30(766.67%) 15:52


LVS opened well below at $71.24 and preceded go to down further to $69.26 before bouncing back and is now trading at $73.08, was a little late in closing and missed getting out at $400 per contract but still happy

Las Vegas Sands Corp. (LVS)

-NYSE

73.08 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 1.95(2.60%) 4:21PM GMT - Nasdaq Real Time Price
  • #2,773
  • Feb 5, 2014 10:26am Feb 5, 2014 10:26am
Quoting njr
{quote} Position Filled: SOLD 105 TWTR Feb07'14 90 CALL @AMEX @ 0.15 Remaining 45 contracts pending. Current is 65.88. Earnings would need to be dazzling enough to rocket the price by 36% to hit the 90 strike
How much margin was required for the above trade.
  • #2,774
  • Feb 5, 2014 10:34am Feb 5, 2014 10:34am
Quoting Cecil Gee
{quote} How much margin was required for the above trade.

27k
  • #2,775
  • Feb 5, 2014 11:45am Feb 5, 2014 11:45am
Quoting njr
{quote} Position Filled: SOLD 105 TWTR Feb07'14 90 CALL @AMEX @ 0.15 Remaining 45 contracts pending. Current is 65.88. Earnings would need to be dazzling enough to rocket the price by 36% to hit the 90 strike
That's the way to do it (for those that have the free margin....and the right broker). My broker doesn't even have TWTR 2/7 $105c in the chain, best I can do is sell 2/7 $90c @ $0.15, which I am tempted to do. For 2/14 they only offer up to $80 calls!
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,776
  • Feb 5, 2014 11:47am Feb 5, 2014 11:47am
Quoting Cecil Gee
{quote} Finally closed up the above trade, Closed for $260 per contract, I bought yesterday for $30 per contract making a 8x return on LVS.


Seems like you've been hitting lots of these babies lately, CG.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,777
  • Feb 5, 2014 12:02pm Feb 5, 2014 12:02pm
Quoting The Fool
{quote} That's the way to do it (for those that have the free margin....and the right broker). My broker doesn't even have TWTR 2/7 $105c in the chain, best I can do is sell 2/7 $90c @ $0.15, which I am tempted to do. For 2/14 they only offer up to $80 calls!
Hey The Fool. I use IB and the chain for TWTR for 2/7 shows calls up to 90 and not up to 105. The 90 calls are the same price at what you've written above ($0.15) which matches exactly what your broker is offering.
  • #2,778
  • Feb 5, 2014 12:11pm Feb 5, 2014 12:11pm
Quoting njr
{quote} Hey The Fool. I use IB and the chain for TWTR for 2/7 shows calls up to 90 and not up to 105. The 90 calls are the same price at what you've written above ($0.15) which matches exactly what your broker is offering.
hey njr, sorry - I misread your trade - you sold 105 @ $90c - I must have thought I saw $105 calls sold - my bad.

Hard to say what TWTR could do - no chart history, really. A 2-1/2 handle spike up would be something to see. Might be safer to sell puts for 2/7. I am still mulling, currently sitting on 2/22 $75 calls.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #2,779
  • Feb 5, 2014 1:38pm Feb 5, 2014 1:38pm
Quoting njr
{quote} Hey The Fool. I use IB and the chain for TWTR for 2/7 shows calls up to 90 and not up to 105. The 90 calls are the same price at what you've written above ($0.15) which matches exactly what your broker is offering.

watch also the one of EXPEDIA (EXPE), the BID for the 80 CALL STRIKE is at 0.15, earnings tomorrow, very unlikely it will hit it...
  • #2,780
  • Feb 5, 2014 1:53pm Feb 5, 2014 1:53pm
Quoting brokerr
{quote} watch also the one of EXPEDIA (EXPE), the BID for the 80 CALL STRIKE is at 0.15, earnings tomorrow, very unlikely it will hit it...
LNKD also has ER out tomorrow, anything past $255-$260 a safe bet for 2/7 call selling
"If The Fool persists in his Folly he will become wise." - William Blake
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