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Let's Trade Options

  • #4,001
  • Jun 24, 2014 2:30pm Jun 24, 2014 2:30pm
Quoting StrayDog
Dow drops triple digits as Iraq fears undo data cheer http://www.cnbc.com/id/101784484 U.S. Stocks Decline Amid Tension in Middle East, Data http://www.bloomberg.com/news/2014-0...day-rally.html
Yup, we got a million articles in the financial press over the last week about how everybody hates the low volume, low volatility bull market, so luckily we have Iraq civil war to blame a nice correction on. I have sold IWM calls, TBT calls against long calls I had in those, will like maybe get short the S&P here before the close.

I have been mesmerized, hard to believe the shit could actually go down....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,002
  • Jun 24, 2014 2:46pm Jun 24, 2014 2:46pm
Quoting The Fool
I have been mesmerized, hard to believe the shit could actually go down....
Yup. I had QQQ puts that I closed for small profit half an hour BEFORE the waterfall.
Hope is dangerous in this game.
  • #4,003
  • Jun 24, 2014 2:50pm Jun 24, 2014 2:50pm
Quoting StrayDog
{quote} Yup. I had QQQ puts that I closed for small profit half an hour BEFORE the waterfall.
Well, we'll see if a string of down days can come to pass. I am net short IWM, TBT (long bonds), and now just edged short gold (GLD). If we get a true selling spree I don't think gold can put up the safe-haven numbers, but I could be wrong about that, so I'm ready to roll either direction.

Good Luck, StrayDog, I'm just glad to see some movement.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,004
  • Jun 24, 2014 11:26pm Jun 24, 2014 11:26pm
http://www.cnbc.com/id/101779998?__s...the%20%27ultim

Greece, Wilbur, really? IRE looks like it could scud around $14...or drop to $11 or lower....or rebound to $17....options a little too thin, though.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,005
  • Jun 25, 2014 10:27am Jun 25, 2014 10:27am
Quoting Cecil Gee
natural gas is looking very weak and we're almost in the second half of the year where demand normally tapers of, so hoping to get in a long $24 put for 8c or less on the open tomorrow. UNG closed today at $24.69 United States Natural Gas (UNG) -NYSEArca 24.69 {image} 0.59(2.33%) 23 Jun 21:00 |After Hours: : 24.59 {image} 0.10 (0.41%) 22:01 UNG Jun 2014 24.000 put (UNG140627P00024000) -OPR 0.08 {image} 0.02(33.33%) 23 Jun 20:57
with UNG around $25.15 the 6/27 $24.50 puts are $0.06/$0.07. Storage numbers out tomorrow could give us $24.50 - are you in?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,006
  • Jun 25, 2014 7:31pm Jun 25, 2014 7:31pm
Quoting The Fool
{quote} with UNG around $25.15 the 6/27 $24.50 puts are $0.06/$0.07. Storage numbers out tomorrow could give us $24.50 - are you in?
not yet, plan was to enter puts on Tuesday but lucky for me i didn't because I want to see price below $24.70 and hold there, so far its trading above $25, we'll see after the data where it trades
  • #4,007
  • Jun 25, 2014 7:35pm Jun 25, 2014 7:35pm
may enter TLT $112.50 puts for 20c or less tomorrow should we open just under the close of to day which was around $112.87 i think

TLT Jun 2014 112.500 put (TLT140627P00112500)
-OPR
0.23 https://s.yimg.com/lq/i/us/fi/03rd/down_r.gif 0.15(39.47%) 25 Jun 20:47
  • #4,008
  • Jun 26, 2014 2:26am Jun 26, 2014 2:26am
Quoting Cecil Gee
may enter TLT $112.50 puts for 20c or less tomorrow should we open just under the close of to day which was around $112.87 i think TLT Jun 2014 112.500 put (TLT140627P00112500) -OPR 0.23 {image} 0.15(39.47%) 25 Jun 20:47

could be, I am zoomed out much more on TLT and looking at long Dec puts down around $102. Would like to get those for < $0.75. Will diagonalize short puts against those multiple times, first maybe Aug $107 for > $0.25. I am looking for a moderate descent in TLT down to around $106 by about September, to $102 or lower by the end of the year. Interest rate chickens gonna come home to roost sooner or later, I like mine fried....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,009
  • Jun 26, 2014 4:14am Jun 26, 2014 4:14am
Trading options too, for currency. Vanilla options at SaxoBank.
Haven't got the time to read the thread. Option trading is rare here, so I decided to make an appearance .
No diagonal spreads though. Just selling single puts and calls here and there for some theta . Would be grateful to see description of your work.
I wish profits and successful trading to all.
  • #4,010
  • Jun 26, 2014 2:39pm Jun 26, 2014 2:39pm
Quoting The Fool
{quote} could be, I am zoomed out much more on TLT and looking at long Dec puts down around $102. Would like to get those for < $0.75. Will diagonalize short puts against those multiple times, first maybe Aug $107 for > $0.25. I am looking for a moderate descent in TLT down to around $106 by about September, to $102 or lower by the end of the year. Interest rate chickens gonna come home to roost sooner or later, I like mine fried....
got in Oct $106 TLT puts for $0.67, will look for Jul or Aug short put leg tomorrow
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,011
  • Jun 26, 2014 2:41pm Jun 26, 2014 2:41pm
Quoting Dostoevsky
Trading options too, for currency. Vanilla options at SaxoBank. Haven't got the time to read the thread. Option trading is rare here, so I decided to make an appearance . No diagonal spreads though. Just selling single puts and calls here and there for some theta . Would be grateful to see description of your work.
Hi Dostoevsky and welcome to the thread. I have been a little scarce lately. It's construction season and my hours are stretched. But I am still trading, hoping to see some market volatility return. Put up some of your trade ideas sometime so we can see what you're up to....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,012
  • Jun 26, 2014 7:56pm Jun 26, 2014 7:56pm
Quoting Cecil Gee
may enter TLT $112.50 puts for 20c or less tomorrow should we open just under the close of to day which was around $112.87 i think TLT Jun 2014 112.500 put (TLT140627P00112500) -OPR 0.23 {image} 0.15(39.47%) 25 Jun 20:47
TLT was a no go as it opened higher
  • #4,013
  • Jun 27, 2014 4:58am Jun 27, 2014 4:58am
UNG may be on today, a little retracement then long $24.50 put if it opens below 24.50 then the $24 put is on for 2c
  • #4,014
  • Jun 27, 2014 5:26am Jun 27, 2014 5:26am
may look for long calls on VXX and TLT, COULD BE A EXCELLENT SCALP DAY
  • #4,015
  • Jun 27, 2014 6:19am Jun 27, 2014 6:19am
I'm currently selling various calls on gbpusd - waiting for it to go down at least slightly.
Sold put on usdcad - it's okay for now, but usdcad isn't going up for some time.
I wish profits and successful trading to all.
  • #4,016
  • Jun 27, 2014 6:20am Jun 27, 2014 6:20am
Quoting Dostoevsky
Trading options too, for currency. Vanilla options at SaxoBank. Haven't got the time to read the thread. Option trading is rare here, so I decided to make an appearance . No diagonal spreads though. Just selling single puts and calls here and there for some theta . Would be grateful to see description of your work.
Hi Dostoevsky - welcome! Good to see another 'theta' trader here :-) Keep us posted of the trades you put on as it is always good to exchange ideas. I generally trade the ES mini as the margin requirements are lower on future options. I occasionally trade the currency futures, particularly on the Yen (6J). I aim for around 30-70% max profit on my trades and trade around 45 to 55 DTE to capitalize on the theta decay. At the moment my only positions are I sold PUTs at 1850 for expiry 3rd July. I just placed a limit order on JPY.USD (6J) for 8th Aug expiry (0.0101 strike) which I hope will be filled today. There is good support for USD.JPY at the 100 level so I'm expecting this to hold if this drops further.....
  • #4,017
  • Jun 27, 2014 6:28am Jun 27, 2014 6:28am
Quoting njr
{quote} Hi Dostoevsky - welcome!
Thanks man!
Let me understand your terminology. Maybe in Russian language its something different.
30-70% max profit - you mean when you sell option for 100 points, you think it's okay to close profit when option costs 70-30 points. Correct?
45 to 55 DTE - you mean delta 0.45 to 0.55?

Trading CME options is cool, I must say. But I don't have big enough deposit for my MM (I trade 5 currencies - /6e, /6b, /6a, /6c, /6n, but using vanilla saxo forex options). I use TOS for profile analyze. I prefer delta to be about 0.32-0.38; because I want to be cautious. I look at 2008 and want to live through another one.

ES mini - it's like S&P but with less point cost? How do you analyze it? I use CME daily bulletin and COT for my analysis.
I wish profits and successful trading to all.
  • #4,018
  • Jun 27, 2014 6:43am Jun 27, 2014 6:43am
Quoting Dostoevsky
{quote} Thanks man! Let me understand your terminology. Maybe in Russian language its something different. 30-70% max profit - you mean when you sell option for 100 points, you think it's okay to close profit when option costs 70-30 points. Correct? 45 to 55 DTE - you mean delta 0.45 to 0.55? Trading CME options is cool, I must say. But I don't have big enough deposit for my MM (I trade 5 currencies - /6e, /6b, /6a, /6c, /6n, but using vanilla saxo forex options). I use TOS for profile analyze. I prefer delta to be about 0.32-0.38; because I want...
Hi,

Answers below

Max profit. For example, say I sell a PUT for $5 then 50% max profit will be when I can close the position when the price is $2.5.
DTE - Days to expiration. Theta decays the fastest from around 60 DTE to around 25 DTE.
TOS / Dough is pretty good for visually analyzing the strategy. I generally aim for deltas around 0.05 to about 0.2.
ES mini: http://www.marketwatch.com/investing/future/esu4, http://www.cmegroup.com/trading/equi...fications.html
  • #4,019
  • Jun 27, 2014 6:49am Jun 27, 2014 6:49am
Quoting njr
{quote} I generally aim for deltas around 0.05 to about 0.2. ES mini:
Wow, that's pretty low delta. That means you have low drawdowns then?
But if you have 60 DTE and delta about 0.2 on /6J, how much points will you get? Like 30? Strike is quite far, yes, but what do you do in case of big move not in your favor?

Have you considered trading spreads like - when you sell put, you just sell call with same DTE and delta? More theta that way?
I wish profits and successful trading to all.
  • #4,020
  • Jun 27, 2014 6:59am Jun 27, 2014 6:59am
Quoting Dostoevsky
{quote} Wow, that's pretty low delta. That means you have low drawdowns then? But if you have 60 DTE and delta about 0.2 on /6J, how much points will you get? Like 30? Strike is quite far, yes, but what do you do in case of big move not in your favor? Have you considered trading spreads like - when you sell put, you just sell call with same DTE and delta? More theta that way?
Currently 6J at Aug 8 expiry (0.0101 strike) is 0.000013. If there is a large move and my position gets 'tested' to a level I am not comfortable with then I will either roll up/out/down depending on the position. I do short strangles selling calls and puts, however given the 'meltup' in the market over the past few months it's been difficult to sell calls with DTE greater than about 20. I've shorted the timescale to around 14 DTE for the calls and even with this short duration they've been tested!
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