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Let's Trade Options

  • #4,321
  • Edited 11:45am Aug 8, 2014 11:28am | Edited 11:45am
A good spike in the market today apparently on the back of the potential withdrawal of Russian forces from the Ukraine boarder. Today is definitely an ES mini call selling day!
  • #4,322
  • Aug 8, 2014 12:13pm Aug 8, 2014 12:13pm
Quoting StrayDog
{quote} What are the other two? On PCLN I was thinking of IC right on the edges of estimated move. The so called "Chicken Iron Condor"... like 1195/1200 + 1350/1355 Aug15 ... for $2.10 credit. But no IC can make my year so you are probably thinking of something else. Did not enter any day trade with weeklies for some time. Missed TSLA today, which I like to trade.
GOOGLE and GS
  • #4,323
  • Aug 8, 2014 12:24pm Aug 8, 2014 12:24pm
Quoting StrayDog
{quote} What are the other two? On PCLN I was thinking of IC right on the edges of estimated move. The so called "Chicken Iron Condor"... like 1195/1200 + 1350/1355 Aug15 ... for $2.10 credit. But no IC can make my year so you are probably thinking of something else. Did not enter any day trade with weeklies for some time. Missed TSLA today, which I like to trade.
Hi SD,

Not sure if you are watching but fyi, the Tasty Trade people have just done an IC on PCLN on their live show. I can't recall the exact strikes but I think it was something like 1120/1125 + 1430/1435 (Aug 15 expiry) with a POP of around 90%. I think that it will go through their BOB application if you subscribe to it. Good luck with the trade if you decide to enter.
  • #4,324
  • Aug 8, 2014 12:58pm Aug 8, 2014 12:58pm
if NDX$ rejects of 3005 next week then i'm doing OTM put butterflys on AAPL
  • #4,325
  • Aug 8, 2014 1:00pm Aug 8, 2014 1:00pm
Quoting Cecil Gee
if NDX$ rejects of 3005 next week then i'm doing OTM put butterflys on AAPL
3905
  • #4,326
  • Aug 8, 2014 9:03pm Aug 8, 2014 9:03pm
Quoting The Fool
{quote} Yes, many many traders (including me) have been losing money trying to short the long bond. You can correlate ^TYX directly m/l to TLT, and bond bulls think ^TYX will keep dropping to below 3.00% before any kind of bottom is in. And that corresponds to TLT > $120 somewhere. My take is that TLT will stay m/l sideways or slide a bit in a riskon market and will keep rising in riskoff. I have been selling bull put spreads on TLT and doing well.
Another note on trading TLT: you should watch where the 30y T-bond auctions are (there's one 8/14) - if there are unexpected results at the auction TLT can move hard.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,327
  • Aug 8, 2014 9:09pm Aug 8, 2014 9:09pm
Quoting StrayDog
I took a trade from dough... IWM bear call spread 115/117 Sep19 expiration for $0.65 credit.
Beware Jackson Hole!

http://www.kc.frb.org/publications/r...-hole-info.cfm
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,328
  • Aug 9, 2014 1:28am Aug 9, 2014 1:28am
http://finance.yahoo.com/news/theres...181642109.html

"Cisco has a history of announcing job cuts in the summer, around the time its fiscal year ends. In addition to the 4,000 jobs cut announced in August 2013, Cisco cut 2% of its workforce in July 2012. Routine layoffs have been going on since 2011, when the company launched a program called "the Accelerated Cisco Transformation Program (ACT)," run by Senior Vice President Angel Mendez."

..last Aug ER CSCO showed a $2 quick drop. I am looking for that kind of move this August, too. ER's 8/13
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,329
  • Aug 9, 2014 9:33am Aug 9, 2014 9:33am
Quoting njr
{quote} Hi SD, Not sure if you are watching but fyi, the Tasty Trade people have just done an IC on PCLN on their live show. I can't recall the exact strikes but I think it was something like 1120/1125 + 1430/1435 (Aug 15 expiry) with a POP of around 90%. I think that it will go through their BOB application if you subscribe to it. Good luck with the trade if you decide to enter.
I was just looking thru the 8/16 call condors and I couldn't find any with a positive credit on just $5 spread, although there were some with credits on a $10 spread. Definitely easier instruments to trade.... bid/ask spreads on PCLN are atrocious due to thin volume. I don't like the ER date, either.... 8/11 a Monday...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_pcln.png Size: 105 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,330
  • Edited 12:40pm Aug 9, 2014 11:27am | Edited 12:40pm
Expensive stock options plays are attractive yes of course they can pay really well, but the options trade in most of the names is thin, and you have to trade some wide spreads usually to get that high return. Trade volume in the underlying shares is often thin, too, so you can see some big moves that scorch your bum if you have it hanging out short. The crummy (bid/ask) spreads really ruin the allure of spreading on these names as you find out when you have to buy back your short legs...

Nevertheless, here are the most expensive stocks with tradeable options, in descending order by share price:

PCLN, CMG, GOOGL/GOOG, NFLX, AMZN, TSLA, BIDU, V, LNKD, WYNN, SPY, IBM, GS, DIA....gets ya down to about $150/share.

Of the above, SPY by far the easiest thing to trade. Here's a bet that the SnP won't put in a new all-time high within the next 6 weeks:
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_spy.png Size: 62 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,331
  • Edited 12:32pm Aug 9, 2014 11:44am | Edited 12:32pm
Quoting The Fool
Expensive stock options plays are attractive yes of course they can pay really well, but...
To tell you the truth, I keep coming to the realization that the best way to trade options is to stick with the most liquid instruments, namely the most liquid index etf's or corresponding futures. It's noteworthy that this is how Karen the SuperTrader trades (as does our friend, njr). It takes alot of time to do research in the various stock/etf names, get sucked into the casino games around the earnings releases, the buyout rumors, etc, etc. So much easier to just take a broad view of the markets: risk on/risk off, what else do you need to know? So, I know I've said it before, so shame on me, but I am getting out of the broad market approach to options trading that I have been addicted to, and will just try to concentrate on the most liquid instruments. And, somebody, please berate me if I backslide.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,332
  • Aug 9, 2014 12:02pm Aug 9, 2014 12:02pm
Quoting The Fool
{quote} I am getting out of the broad market approach to options trading that I have been addicted to, and will just try to concentrate on the most liquid instruments.
Like this:
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2014-08-09_etf-price.png Size: 33 KB
Click to Enlarge Name: 2014-08-09_etfs-vol.png Size: 84 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,333
  • Aug 9, 2014 12:12pm Aug 9, 2014 12:12pm
Quoting The Fool
Here's a bet that the SnP won't put in a new all-time high within the next 6 weeks: {image}
9/20 SPY $205/$200 is a crowded trade, it seems....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_spy205.png Size: 54 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,334
  • Aug 9, 2014 12:30pm Aug 9, 2014 12:30pm
Quoting The Fool
{quote} 9/20 SPY $205/$200 is a crowded trade, it seems.... {image}
SnP will probably rally back above 1,950 in the coming week or so if the geopoli news risk-o-meter cools down. I will be looking for a better entry on a SPY bear call spread in the coming week....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_snp.png Size: 25 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,335
  • Aug 9, 2014 1:02pm Aug 9, 2014 1:02pm
Quoting The Fool
Expensive stock options plays are attractive yes of course they can pay really well, but the options trade in most of the names is thin, and you have to trade some wide spreads usually to get that high return. Trade volume in the underlying shares is often thin, too, so you can see some big moves that scorch your bum if you have it hanging out short. The crummy (bid/ask) spreads really ruin the allure of spreading on these names as you find out when you have to buy back your short legs... Nevertheless, here are the most expensive stocks with tradeable...
the only one I personally would ignore deom that list is IBM because its not as volatile as the others
  • #4,336
  • Aug 9, 2014 1:05pm Aug 9, 2014 1:05pm
Quoting The Fool
{quote} SnP will probably rally back above 1,950 in the coming week or so if the geopoli news risk-o-meter cools down. I will be looking for a better entry on a SPY bear call spread in the coming week.... {image}
yep rejection from 1945/55 will be enough for me to do straight puts below 1900
  • #4,337
  • Aug 9, 2014 1:44pm Aug 9, 2014 1:44pm
Quoting Cecil Gee
{quote} the only one I personally would ignore deom that list is IBM because its not as volatile as the others
idk, I kinda liked the look of IBM. You could do bear call spreads with short calls >$195 and bull put spreads with short puts down at $175-$170. IBM never traded for more than a week or so above $210 ever....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_ibm.png Size: 26 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,338
  • Aug 9, 2014 10:16pm Aug 9, 2014 10:16pm
I'm glad some of you have been mentioning dough.com - I checked it out again after ignoring it for several months. Below is my SPY vertical mentioned above. Platform is cool, but maybe too simplified? Where are the greeks? I see in the upper right there under the " symbol, you can expand the chart for SPY and a few details are given - the iv and iv rank. Am I missing something?
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09doughspy.png Size: 250 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,339
  • Aug 9, 2014 10:30pm Aug 9, 2014 10:30pm
Quoting The Fool
dough.com - Am I missing something? {image}
oh, I see if you toggle on the "leg" button you get delta's for each leg...kindof....

Well, I have it linked to my TDA Roth IRA account, but it's nothing like ToS. And I ain't paying the BoB subscription fee....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-09_doughspy2.png Size: 206 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,340
  • Aug 10, 2014 12:54am Aug 10, 2014 12:54am
Quoting The Fool
{quote} To tell you the truth, I keep coming to the realization that the best way to trade options is to stick with the most liquid instruments, namely the most liquid index etf's or corresponding futures. It's noteworthy that this is how Karen the SuperTrader trades (as does our friend, njr). It takes alot of time to do research in the various stock/etf names, get sucked into the casino games around the earnings releases, the buyout rumors, etc, etc. So much easier to just take a broad view of the markets: risk on/risk off, what else do you need...
Totally agree with you there TF. It took me some time to come to the same realization but I'd say from about May this year onwards I have done only this 'type' of trading principally in the ES mini's, (occasionally the JPY.USD). ES mini's are very liquid (thanks High Frequency Traders ) and the best thing is that I don't need to worry about specific stocks & significant moves due earnings, news announcements, take overs, mergers, etc, etc. I sleep well at night!

My hard lesson which pushed me to this type of trading was my 2% loss (of total portfolio value) from the TSLA gigafactory announcements earlier in the year (I posted on FF details of what happened with the vol expansion)!!!! I am not one to boast but I can honestly say that this type of trading has been the most consistently profitable for me and I really don't think I'll return to trading on individual stocks, earnings, etc. Also, for anyone considering this type of trading, I would say that the size of the account does help. I have a portfolio margin which allows me a higher margin plus some other benefits. All the best to anyone willing to try this......
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