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  • #3,741
  • May 26, 2014 1:10am May 26, 2014 1:10am
Quoting The Fool
{quote} http://www.federalreserve.gov/newsev.../20140430a.htm "Beginning in May, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $20 billion per month rather than $25 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $25 billion per month rather than $30 billion per month." Yes, the tapirs. As of this month $85bio/mo has been cut to $45bio/mo, and after the June 18 FOMC, we go to $35bio/mo, which paces out to $0bio/mo by Halloween, the...
As usual, good discussion BW and TF. My 2 cents is a blend of both of your views......

No one definitively knows where the market will go in a day, a week, 3 weeks, 6 months, etc, etc but it certainly seems that there is a lot of chatter about a 'significant' pullback coming. People are throwing numbers around like 25% to 10% drops, whilst others are saying we are still in a bull market but currently consolidating. In terms of the catalyst for a pullback, one could argue that it will be the taper, china slowdown, an escalation in the Ukraine situation, or another situation that is yet to appear....

My game plan at the moment is to play 'safer' than usual by selling calls on a 14 to 21 DTE horizon. I sold a bunch of them on Friday after the SPX hit the magic 1900!!! When the 'pullback' does happen, I agree BW that it will move fast and catch some of the option put sellers out, particularly those that sell close to the ATM strike. The positive side of a pullback would be that vol would spike and there would be much richer premium which I am craving! Hence, when it happens I will sell puts but make sure they are waaaaay OTM to try to avoid the velocity of the drop reaching my strike!
  • #3,742
  • May 26, 2014 1:21am May 26, 2014 1:21am
Quoting njr
{quote}.... My game plan at the moment is to play 'safer' than usual by selling calls on a 14 to 21 DTE horizon. I sold a bunch of them on Friday after the SPX hit the magic 1900!!! When the 'pullback' does happen, I agree BW that it will move fast and catch some of the option put sellers out, particularly those that sell close to the ATM strike. The positive side of a pullback would be that vol would spike and there would be much richer premium which I am craving! Hence, when it happens I will sell puts but make sure they are waaaaay OTM to try...
I am with you on the call selling mo, equities may put in some new highs but I bet it will be in slow incremental fashion, if at all, and not by big bounds. On bonds, which I am also trying to learn to trade (bond derivatives, that is), I think the US long bonds are going to have trouble pushing much higher, so I am looking to sell (TLT) calls there, too. That's the bulk of my volume - equity indices and TLT/TBT, and the rest I chat about here - ER plays on single names, natgas, some gold, various single names in equities, etc, etc, are just side plays I like to do. I will keep looking for common scenarios amongst the latter as those can produce some big short-term gains.

Cheers, njr & Happy Trades.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,743
  • May 26, 2014 1:36am May 26, 2014 1:36am
Quoting The Fool
{quote} flatlining gold making me money on GLD credit spreads. I'd rather see it move, though.
still flat, starting to make me nervous....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,744
  • May 26, 2014 2:11am May 26, 2014 2:11am
http://news.yahoo.com/far-national-f...181424443.html

"The French people "no longer want to be ruled from outside, to have to submit to laws they did not vote for or to obey (EU officials) who are not subject to the legitimacy of universal suffrage," she said."

...well, not sure I could argue with that. But will the EUR weaken?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,745
  • May 26, 2014 4:09am May 26, 2014 4:09am
Quoting njr
{quote} As usual, good discussion BW and TF. My 2 cents is a blend of both of your views...... No one definitively knows where the market will go in a day, a week, 3 weeks, 6 months, etc, etc but it certainly seems that there is a lot of chatter about a 'significant' pullback coming. People are throwing numbers around like 25% to 10% drops, whilst others are saying we are still in a bull market but currently consolidating. In terms of the catalyst for a pullback, one could argue that it will be the taper, china slowdown, an escalation in the Ukraine...
Yep, I'm selling calls on ES also. I don't care where they push it, I'll just keep on rollin', rollin', rollin' (..up and out..) until they expire worthless.
I have no clue what I'm talking about.
  • #3,746
  • May 26, 2014 4:17am May 26, 2014 4:17am
Quoting The Fool
{quote} I am with you on the call selling mo, equities may put in some new highs but I bet it will be in slow incremental fashion, if at all, and not by big bounds. On bonds, which I am also trying to learn to trade (bond derivatives, that is), I think the US long bonds are going to have trouble pushing much higher, so I am looking to sell (TLT) calls there, too. That's the bulk of my volume - equity indices and TLT/TBT, and the rest I chat about here - ER plays on single names, natgas, some gold, various single names in equities, etc, etc, are...
As per njr, crawling-higher equities is why I'm shorting the calls. There is just no gusto in this market on the topside. The probability of a sharp move higher seems to be me to be very low, hence why short calls are favoured. That said, we could see a spike higher, maybe 25 points in a week, but with conservative positioning that's not a problem. Just keep rollin', rollin', rollin'...

I am long ZB again though via 50/50 short puts and outright longs, at least for a test of the highs (138? not got TWS open right now). There is I think still room on the downside for bond yields, but clearly it's not as easy a trade as when yields hit 4%. I did say I had a target of 117-ish on TLT months ago and I still see that as doable although I haven't revisited the chart in the last few days.

Quite possibly I'm going to be wrong on both ends but eh, that's trading, it's all guesswork at the end of the day. Thank the Lord we can sell options and thank him again when we can roll them over.
I have no clue what I'm talking about.
  • #3,747
  • May 26, 2014 5:48am May 26, 2014 5:48am
Oh dear, it looks like I am wrong here on the indexes : http://www.investing.com/news/econom...s-surge-286196
I have no clue what I'm talking about.
  • #3,748
  • May 26, 2014 6:56am May 26, 2014 6:56am
Quoting Boy Wonder
{quote} As per njr, crawling-higher equities is why I'm shorting the calls. There is just no gusto in this market on the topside. The probability of a sharp move higher seems to be me to be very low, hence why short calls are favoured. That said, we could see a spike higher, maybe 25 points in a week, but with conservative positioning that's not a problem. Just keep rollin', rollin', rollin'... I am long ZB again though via 50/50 short puts and outright longs, at least for a test of the highs (138? not got TWS open right now). There is I think still...
"Just keep rollin', rollin', rollin'..."

  • #3,749
  • May 26, 2014 9:57am May 26, 2014 9:57am
Quoting Boy Wonder
Oh dear, it looks like I am wrong here on the indexes : http://www.investing.com/news/econom...s-surge-286196
ES @ 1903.50.....it'll be interesting to see where it trades tomorrow when US and UK are back in full swing.....
  • #3,750
  • May 26, 2014 12:19pm May 26, 2014 12:19pm
Quoting njr
{quote} ES @ 1903.50.....it'll be interesting to see where it trades tomorrow when US and UK are back in full swing.....
http://finance.yahoo.com/news/5-bull...155359961.html

On the wire now I see " Ukraine's military launched airstrikes Monday against separatists who had taken over the airport in the eastern capital of Donetsk ..." and it seems that there is a slow but steady escalation in the use of military hardware. No words from Putin, though. Maybe he got a truckload of chocolate....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,751
  • May 26, 2014 12:23pm May 26, 2014 12:23pm
Quoting The Fool
{quote} http://finance.yahoo.com/news/5-bull...155359961.html On the wire now I see " Ukraine's military launched airstrikes Monday against separatists who had taken over the airport in the eastern capital of Donetsk ..." and it seems that there is a slow but steady escalation in the use of military hardware.
Yup, hit the wires here as well....

http://www.reuters.com/article/2014/...A4M05420140526
  • #3,752
  • May 26, 2014 1:51pm May 26, 2014 1:51pm
Quoting njr
{quote} ES @ 1903.50.....it'll be interesting to see where it trades tomorrow when US and UK are back in full swing.....
Tempted to add another short at 1904, but..but..must..maintain..discipline...oh sod it...
Oh wait, the futures are not open.
I have no clue what I'm talking about.
  • #3,753
  • May 26, 2014 7:48pm May 26, 2014 7:48pm
Quoting Boy Wonder
{quote} Tempted to add another short at 1904, but..but..must..maintain..discipline...oh sod it... Oh wait, the futures are not open.
I reckon we see a good pop from here to make sure it stays over 1900, I would wait before entering short just yet. Making yearly highs now. 1930-1940 should be a good short entry. My $.02...
  • #3,754
  • May 26, 2014 11:12pm May 26, 2014 11:12pm
Quoting stylinex
{quote} I reckon we see a good pop from here to make sure it stays over 1900, I would wait before entering short just yet. Making yearly highs now. 1930-1940 should be a good short entry. My $.02...
I'd like to see some movement up....or down....I really don't care, just need to see some movement. I will be selling calls in SPY (or SSO) via credit spreads, ratio spreads, calendar spreads, cheese spreads, whatever, so I don't mind if the S&P hikes uphill, just so's it's not a sprint, and as we've all surmised, that seems unlikely from here. But we'll see.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3,755
  • May 27, 2014 8:47am May 27, 2014 8:47am
Market off to a strong start with ES rocking up 9 points. My calls I sold on friday are still well OTM so I'll keep them open and depending on the strength of today upswing I may sell some more calls.....
  • #3,756
  • May 27, 2014 8:59am May 27, 2014 8:59am
Quoting njr
Market off to a strong start with ES rocking up 9 points. My calls I sold on friday are still well OTM so I'll keep them open and depending on the strength of today upswing I may sell some more calls.....
Yup. Trannies putting in another strong day (so far) and looking like they are going parabolic, up and over 8k for the first time in history (I think).
I see IWM is 30c below its 50dma and a dollar above that is the 100dma. I expect that may become a target on the upside.
Seems like 1920 is about right on the upside on ES. Half of me wants them to take it there so I can deploy some good shorts; the other half says, "be careful what ye wish for, for ye might just get it and more besides".

I did add another short at 1904 (I know, I know, bad trader...thwack). Looks like that's gonna be underwater for a while. But fuck it LOL.
I have no clue what I'm talking about.
  • #3,757
  • May 27, 2014 9:17am May 27, 2014 9:17am
Sold a bunch of bear call spreads on XOP, 75.5/76 for 14c each (i.e. credit).
Over the weekend I figured by restricting myself to ES I was
a) missing out on other, potentially better opportunities
b) being lazy

I sell futures options because the bang per buck is very good. Conversely the ROC selling stock options is as we all know crap. But the solution to that is to sell spreads. So that's what I'm doing.
I have no clue what I'm talking about.
  • #3,758
  • May 27, 2014 9:17am May 27, 2014 9:17am
Quoting Boy Wonder
{quote} Yup. Trannies putting in another strong day (so far) and looking like they are going parabolic, up and over 8k for the first time in history (I think). I see IWM is 30c below its 50dma and a dollar above that is the 100dma. I expect that may become a target on the upside. Seems like 1920 is about right on the upside on ES. Half of me wants them to take it there so I can deploy some good shorts; the other half says, "be careful what ye wish for, for ye might just get it and more besides". I did add another short at 1904 (I know, I know, bad...
Lol - I admit that I was also very tempted to sell some more calls at 1904 and almost did the same but just before hitting the transmit button, I changed my mind and though it best to save my gunpowder for future upside on a day like today. I can handle 1920 but above this will make me a little nervous and I'll probably roll out/up. My calls expire on 6 June so it'll be a fun 2 weeks...
  • #3,759
  • May 27, 2014 9:19am May 27, 2014 9:19am
Quoting njr
{quote} Lol - I admit that I was also very tempted to sell some more calls at 1904 and almost did the same but just before hitting the transmit button, I changed my mind and though it best to save my gunpowder for future upside on a day like today. I can handle 1920 but above this will make me a little nervous and I'll probably roll out/up. My calls expire on 6 June so it'll be a fun 2 weeks...
I suppose what you do is sell well OTM but in volume, is that right?
I have no clue what I'm talking about.
  • #3,760
  • May 27, 2014 9:24am May 27, 2014 9:24am
Quoting njr
Market off to a strong start with ES rocking up 9 points. My calls I sold on friday are still well OTM so I'll keep them open and depending on the strength of today upswing I may sell some more calls.....
S&P looking to make some fat gains, I legged into calls on SSO near the open (long Jul 19 $115 @ $1.08) & will look for quick gains before I sell the credit leg.

Watching gold, finally getting a little movement, given the thin range over the last many weeks, a small move could turn into a laaarge one.
"If The Fool persists in his Folly he will become wise." - William Blake
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