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Let's Trade Options

  • #3,081
  • Feb 26, 2014 12:57am Feb 26, 2014 12:57am
CHK reports premarket Wed
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-02-25_CHK.png Size: 137 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,082
  • Feb 26, 2014 2:05am Feb 26, 2014 2:05am
Quoting The Fool
{quote} http://www.zacks.com/commentary/2228...-post-earnings
Hey TF - I like this approach and it makes sense to me! Thanks....
  • #3,083
  • Feb 26, 2014 2:06am Feb 26, 2014 2:06am
Quoting The Fool
{quote} gl, njr - no, I can't sell naked to any great effect in the accounts I have, so I have to look at credit spreads - might do one on TSLA, probly not, though, best deal I could swing for 2/28 was about $0.15, not bad, but I can maybe do a little better elsewhere. Good luck, though. I learned my lesson about putting any short action on TSLA the hard way in 2013....first started trading options on it when it was at $35....!....just a year ago. I might still watch the puts against a hard pullback...
Thanks TF...
  • #3,084
  • Feb 26, 2014 8:14am Feb 26, 2014 8:14am
Hello the fool,

Quite newbie to the option trade and just bought the books you recommend in the first page. Really want to drill down into this fantastic world.
Few questions, hope may receive your answer.

1. I am an intraday future traders and use the technical analysis like resistance, support, price action. Does option trader do not trade intraday? Since the spreads is a little bit larger than futures

2. Does the option trader user fundamental analysis not technical analysis? Bet on the financial report release on the company or some global financial conference or news?

Thanks a lot! Realy wants to know the trading style of the options.
  • #3,085
  • Feb 26, 2014 8:36am Feb 26, 2014 8:36am
Quoting windpower
Thanks a lot! Realy wants to know the trading style of the options.
there is not one way to trade options - there are countless ways. you just have to use what works for you.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,086
  • Feb 26, 2014 8:37am Feb 26, 2014 8:37am
Quoting The Fool
{quote} so if we are heading for a bond rout same as most of 2013 and bull market in equities as well, will gold fall back and resume its journey toward $1,000? I've been watching for DUST to dip below $20 and it was almost to $19.00 yesterday. June $40 calls are $0.90 {image}
let the record show I called the top for gold. first time for everything I guess....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,087
  • Feb 26, 2014 8:43am Feb 26, 2014 8:43am
My position: SOLD TSLA Feb28'14 290 CALL (TSLA) @AMEX @ 0.25 Did you get into the trade?[/quote]

Update on the position:

Position Closed. IB's margin requirements multiplied by a massive 35 overnight and my margin wouldn't hold. Closed the trade @ 0.4 for a total loss of 0.15 per contract or 0.68% of my portfolio. The options chain has now been extended to a 325 strike although at the time of writing this post I don't see any prices for them yet. I will look at the price of the Calls around the 325 strike and potentially look to re-enter the trade to recoup some or all of the loss. It seems that everyone is on this trade at the moment...
  • #3,088
  • Feb 26, 2014 8:49am Feb 26, 2014 8:49am
Quoting njr
My position: SOLD TSLA Feb28'14 290 CALL (TSLA) @AMEX @ 0.25 Did you get into the trade?
Update on the position: Position Closed. IB's margin requirements multiplied by a massive 35 overnight and my margin wouldn't hold. Closed the trade @ 0.4 for a total loss of 0.15 per contract or 0.68% of my portfolio. The options chain has now been extended to a 325 strike although at the time of writing this post I don't see any prices for them yet. I will look at the price of the Calls around the 325 strike and potentially look to re-enter the trade to recoup some or all of the loss. It seems that everyone is on this trade at the moment...[/quote]

sorry bout that, njr, I was wondering about it. Tesla has really captured the imagination of stock traders across the board and I would not get in front of the train. been there, done that. selling puts, maybe....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,089
  • Feb 26, 2014 8:56am Feb 26, 2014 8:56am
Quoting The Fool
{quote} Update on the position: Position Closed. IB's margin requirements multiplied by a massive 35 overnight and my margin wouldn't hold. Closed the trade @ 0.4 for a total loss of 0.15 per contract or 0.68% of my portfolio. The options chain has now been extended to a 325 strike although at the time of writing this post I don't see any prices for them yet. I will look at the price of the Calls around the 325 strike and potentially look to re-enter the trade to recoup some or all of the loss. It seems that everyone is on this trade at the moment...
sorry bout that, njr, I was wondering about it. Tesla has really captured the imagination of stock traders across the board and I would not get in front of the train. been there, done that. selling puts, maybe....[/quote]

Hey TF - There is certainly TSLA fever out there at the moment and all the talk of the gigafactory and the deal with Panasonic is roaring the stock north again. As they say, you win some and you loose some. Fortunately the loss is small and I'm still up on the month. Looking for the next opportunity though
  • #3,090
  • Feb 26, 2014 9:22am Feb 26, 2014 9:22am
Quoting The Fool
CHK reports premarket Wed {image}
watching to fade the drop if it goes to $24.00 or below.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,091
  • Feb 26, 2014 9:26am Feb 26, 2014 9:26am
Quoting The Fool
{quote} I had a thought. (I know, right?) Maybe a better way to play earnings spikes is to sell the dotm puts/calls AFTER the ER spike is in. Get a spike up, say, then look for nearest expiry dotm calls to sell after they have benefitted from the move up - which is, let us hope (and often it seems the way it plays out) an exhaustive move. Example: FSLR, which has dropped 13%+ AH, will now be a ripe candidate for 2/28 put selling. More later...
FSLR got a 10%+ beatdown, bounced a few $, but may not hold....I am watching to fade this one too, looking for the sp to settle < $50
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,092
  • Feb 26, 2014 11:12am Feb 26, 2014 11:12am
Quoting The Fool
{quote} so if we are heading for a bond rout same as most of 2013 and bull market in equities as well, will gold fall back and resume its journey toward $1,000? I've been watching for DUST to dip below $20 and it was almost to $19.00 yesterday. June $40 calls are $0.90 {image}
took a shot here with a calendar spread, DUST 3/22 $30c short, 4/19 $31c long +$0.27(-$0.84) - net debit $0.57. I think gold is gonna slide, we'll see if I'm right.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,093
  • Feb 26, 2014 12:03pm Feb 26, 2014 12:03pm
Quoting Cecil Gee
Quoting Cecil Gee
I will be looking to take a trade on AAPL today for some short term explosive volatility moves over a ten day period. APPL closing price was $544 yesterday so I will be looking to to set a long strangle $15 or $20 out each way, this will make it $565 and $525 give or take, In taking this the option prices can not exceed $2.20 for each leg lower the better. From last nights close I have $565 call at $2,00 and the $525 at $2.10 making the total at $4.10 or $410 per long strangle position. Prices are below. Hope to get them
...
Apple long strangle trade as above is currently worth over $1200 per position, my original cost was a total of $566 per position trade. Iwill hold out for a little more but if It falls to $1000 i will close, still have two days to expiration

AAPL Feb 2014 530.000 put (AAPL140228P00530000)
-OPR
12.00 http://l.yimg.com/os/mit/media/m/bas...nt-1093278.png 3.00(33.33%) 17:30
  • #3,094
  • Feb 26, 2014 12:49pm Feb 26, 2014 12:49pm
Quoting Cecil Gee
{quote}{quote} Apple long strangle trade as above is currently worth over $1200 per position, my original cost was a total of $566 per position trade. Iwill hold out for a little more but if It falls to $1000 i will close, still have two days to expiration AAPL Feb 2014 530.000 put (AAPL140228P00530000) -OPR 12.00 {image} 3.00(33.33%) 17:30
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,095
  • Feb 26, 2014 1:42pm Feb 26, 2014 1:42pm
Quoting The Fool
looking at HAL, looks set for a fall, will consider Apr $50/$60 long strangle, shoot the $50 puts Wed if Hal will pop higher. Also watching the ^TNX and TLT/TBT. TLT finished today at $107.50, I'll be looking for long puts if we can get a dollar higher.....
now at least treasurys and equities appear to be on the same page. TLT moving on $108 with ^TNX at 2.67%. MaYellen knows she must keep the bond wolfs at bay, but ohshit, she's out of silver bullets. I don't think ^TNX can stay pushed down to 2.5x territory, even if it makes it, so I'm still looking to buy TLT puts if it flirts with $109
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,096
  • Feb 26, 2014 1:43pm Feb 26, 2014 1:43pm
whatup, njr - did you find anything to sell?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,097
  • Feb 26, 2014 1:44pm Feb 26, 2014 1:44pm
Quoting njr
My position: SOLD TSLA Feb28'14 290 CALL (TSLA) @AMEX @ 0.25 Did you get into the trade?
Update on the position: Position Closed. IB's margin requirements multiplied by a massive 35 overnight and my margin wouldn't hold. Closed the trade @ 0.4 for a total loss of 0.15 per contract or 0.68% of my portfolio. The options chain has now been extended to a 325 strike although at the time of writing this post I don't see any prices for them yet. I will look at the price of the Calls around the 325 strike and potentially look to re-enter the trade to recoup some or all of the loss. It seems that everyone is on this trade at the moment...[/quote]


Ouch - watching the price of TSLA falling and the 290 call options dropping as well. Still perplexed how IB increased margin requirements from last night to opening today by a factor of 35! Oh well, a little lesson in position sizing.....
  • #3,098
  • Feb 26, 2014 1:51pm Feb 26, 2014 1:51pm
Quoting The Fool
whatup, njr - did you find anything to sell?
Hey TF,

I'm looking at SHLD. Earnings tomorrow and the market is expecting a big move either 20 up/down. Current price is 40 and I am looking at the 70 or 72.5 strikes to sell.
I'm also looking at CRM and DECK

I'll keep an eye on the above and see what ma Yellen brings tomorrow as well...
  • #3,099
  • Feb 26, 2014 1:53pm Feb 26, 2014 1:53pm
Quoting njr
{quote} Hey TF, I'm looking at SHLD. Earnings tomorrow and the market is expecting a big move either 20 up/down. Current price is 40 and I am looking at the 70 or 72.5 strikes to sell. I'm also looking at CRM and DECK I'll keep an eye on the above and see what ma Yellen brings tomorrow as well...

New position:

SOLD SHLD Mar21'14 72.5 CALL (SHLD) @AMEX @ 0.03
  • #3,100
  • Feb 26, 2014 2:09pm Feb 26, 2014 2:09pm
Quoting njr
{quote} New position: SOLD SHLD Mar21'14 72.5 CALL (SHLD) @AMEX @ 0.03
@ $72.50 that has got to be 3 cents in the bag. Retailers have been flailing.
"If The Fool persists in his Folly he will become wise." - William Blake
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