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Let's Trade Options

  • #4,361
  • Aug 11, 2014 10:11am Aug 11, 2014 10:11am
Quoting The Fool
here's my HLF vertical from last week. HLF bounced hard as I expected. Bid/ask spreads suck on this one though....I will wait and see.... {image}
Hey TF
Nice job on HLF !
The same and worse bid/ask spread is on NUS... bad options, but those stocks can really move. NUS only to downside though

I took a punt re CSCO ER's. Entered 25/25.50 Aug15 strangle for $1.03 debit.
Hope is dangerous in this game.
  • #4,362
  • Aug 11, 2014 12:01pm Aug 11, 2014 12:01pm
Quoting StrayDog
{quote} I took a punt re CSCO ER's. Entered 25/25.50 Aug15 strangle for $1.03 debit.
I strangled CSCO long 8/22 $24/$26 for $0.23/$0.32, $0.55 net debit, gonna be epic....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,363
  • Aug 11, 2014 12:15pm Aug 11, 2014 12:15pm
Quoting StrayDog
{quote} Hi CG, Thanks for reply. Traded GOOG a few times, in fact because of one loss playing the GOOG earnings wrong way, made me think that I dont really understand a thing in options world... and than I decided it is time to learn more. I still dont know much, but learned a lot more since then. Hey TF and njr, interesting stuff, good discussion, I will watch those videos too. Next step in my learning about options is diaginal spreads and butterflies. In the meantime I will do as much credit spreads and Iron Condors as I can.
Personally i wouldn't play earnings on Google purley from an expense point of view, goldman sachs is ok to do so, add CMG with priceline to that list, twice a year the options on these become so very cheap on a friday and with the movement they multiply 200 times plus
  • #4,364
  • Aug 11, 2014 12:20pm Aug 11, 2014 12:20pm
Quoting The Fool
{quote} I strangled CSCO long 8/22 $24/$26 for $0.23/$0.32, $0.55 net debit, gonna be epic....
sold SSO 9/20 $121 call against 9/20 $125 calls for $0.62, cash cow, will eat crow if S&P breaks over 2,000. Jackson Hole could do it....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,365
  • Aug 11, 2014 12:22pm Aug 11, 2014 12:22pm
Quoting StrayDog
{quote} I took a punt re CSCO ER's. Entered 25/25.50 Aug15 strangle for $1.03 debit.
Good Luck to us on CSCO. I am predicting a $2 pop minimum....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,366
  • Aug 11, 2014 12:36pm Aug 11, 2014 12:36pm
Estimated returns
GDX at $26.86 on 11th Aug 2014
Initial outlay: $34 (net debit)
Maximum risk: $35 at a price of $35 on day 11th Aug 2014
Maximum return: $116 at a price of $28.50 at expiry
Breakevens at expiry: $29.67, $27.33

above is a trade i have taken a short while ago for a short term bull otm butterfly on GDX as follows long $27 call short 2 $28.50 calls and long $30 call, all for 22 august expiry but will close sooner should i see more than 100% profit as GDX will struggle past 29.38 at first attempt
  • #4,367
  • Aug 11, 2014 12:40pm Aug 11, 2014 12:40pm
Quoting The Fool
{quote} Good Luck to us on CSCO. I am predicting a $2 pop minimum....
Fingers crossed for that!

Thinking about selling a strangle on AAPL. 1st dev wide, 85/105 Sep19



Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot - 11.8.2014 , 19_39_02.png Size: 82 KB
Hope is dangerous in this game.
  • #4,368
  • Aug 11, 2014 12:44pm Aug 11, 2014 12:44pm
Quoting Cecil Gee
{quote} Personally i wouldn't play earnings on Google purley from an expense point of view, goldman sachs is ok to do so, add CMG with priceline to that list, twice a year the options on these become so very cheap on a friday and with the movement they multiply 200 times plus
Ah the scalping on expiration day... That could be really huge...
Interesting trade you got there on GDX.
Hope is dangerous in this game.
  • #4,369
  • Aug 11, 2014 12:48pm Aug 11, 2014 12:48pm
Quoting StrayDog
{quote} Ah the scalping on expiration day... That could be really huge... Interesting trade you got there on GDX.
yep, you only need one but so tough to get it, GDX has a little up move left in it i think, not holding to expiration to gain max return, rather take what it gives
  • #4,370
  • Aug 11, 2014 1:25pm Aug 11, 2014 1:25pm
Quoting Cecil Gee
{quote} yep rejection from 1945/55 will be enough for me to do straight puts below 1900
got a high of 194.66 and know trading below 194, could be tempted into a OTM put butterfly later today
  • #4,371
  • Aug 11, 2014 1:28pm Aug 11, 2014 1:28pm
this is what I'm planning on doing if S/P closes below 194

Estimated returns
SPY at $194.19 on 11th Aug 2014
Initial outlay: $40 (net debit)
Maximum risk: $40 at a price of $193 at expiry
Maximum return: $260 at a price of $190 at expiry
Breakevens at expiry: $192.60, $187.40
  • #4,372
  • Aug 11, 2014 1:29pm Aug 11, 2014 1:29pm
QQQ is other one looking good for puts should we close red
  • #4,373
  • Aug 11, 2014 1:42pm Aug 11, 2014 1:42pm
Watch if this VIX bounces back above $15 by close of today, if it does then we may see some red days in equities coming to theatre near you
  • #4,374
  • Aug 11, 2014 1:53pm Aug 11, 2014 1:53pm
Quoting StrayDog
{quote} ...Thinking about selling a strangle on AAPL. 1st dev wide, 85/105 Sep19
Well, I just sold my first strangle on live acc. Got $1.01 credit for it ($0.40 for 85 put and $0.61 for 105 call)
I can handle AAPL. Not a big margin requirement.
I was thinking to go naked on something for a while. So why not a wide strangle then...
Hope is dangerous in this game.
  • #4,375
  • Aug 11, 2014 1:56pm Aug 11, 2014 1:56pm
Quoting Cecil Gee
Watch if this VIX bounces back above $15 by close of today, if it does then we may see some red days in equities coming to theatre near you
Red is good. I have always prefered puts over calls anyway.

Now seriously, in this thread there is a very good post about calls vs. puts and vertical spreads by one guy, he had only a few posts, I think his nick is somethng like "money-comes-to-me" or something...
Hope is dangerous in this game.
  • #4,376
  • Aug 11, 2014 1:58pm Aug 11, 2014 1:58pm
Quoting StrayDog
{quote} Well, I just sold my first strangle on live acc. Got $1.01 credit for it. I can handle AAPL. Not a big margin requirement. I was thinking to go naked on something for a while. So why not a wide strangle then...
width is good, expiry date?
  • #4,377
  • Aug 11, 2014 2:00pm Aug 11, 2014 2:00pm
Quoting Cecil Gee
{quote} width is good, expiry date?
I have just edited that post with put and call price, and expiry is Sep19th
Hope is dangerous in this game.
  • #4,378
  • Aug 11, 2014 2:18pm Aug 11, 2014 2:18pm
Quoting StrayDog
{quote} I have just edited that post with put and call price, and expiry is Sep19th
looks good
  • #4,379
  • Aug 11, 2014 2:56pm Aug 11, 2014 2:56pm
Quoting Cecil Gee
Watch if this VIX bounces back above $15 by close of today, if it does then we may see some red days in equities coming to theatre near you
no bounce so in limbo land for now, no trade on S/P and QQQ today
  • #4,380
  • Aug 11, 2014 9:44pm Aug 11, 2014 9:44pm
Quoting djambazov84
being long the underlying and long 3-4 months further down the curve 10-15 delta puts as a hedge ALWAYS works why? here is why: 1. you enjoy the benefit of flat price rallying 2. your teenie puts do NOT lose as much value as your outright position gains due to the fact of being long LONG dated options, where your worst enemy is not time decay but the vega in the option itself, longer-dated derivatives have enormous amounts of inherent vega risk while theta is small, hence the tradeoff. 3.in case of a sharp selloff, your teenie puts WILL explode,...
just scrolled thru first 20 pages, looking for the trader StrayDog was trying to recall. There have been some good traders check in, the above guy seemed to know his stuff, he's still around. I miss Wulfgar, never knew what happened to him. And there was pipple, it was great to see him come through here. Cecil Gee has been here from the beginning - thanks bro.

Problem with the thread is it was started by a rank beginner. But I keep bumbling towards competency. And I have learned a lot from those who come through and the regulars - thanks StrayDog, njr, etc. It's good to be able to bounce ideas off you all.

Someday I must find time to go back and read through the entire thread....
"If The Fool persists in his Folly he will become wise." - William Blake
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