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Let's Trade Options

  • #4,541
  • Aug 21, 2014 2:08pm Aug 21, 2014 2:08pm
Quoting njr
{quote} Hey SD, I don't normally buy options but I think this is a pretty good trade ...
Thanks, crossed fingers for that VIX trade.

I will watch that Karen video tomorrow. I registered myself on tastytrade site today... Watched dough TV today, love that Slim guy.

Today he had a list of stocks where he is bearish, and I looked at my charts also... Really like the situation on YUM and UPS, could be nice downfall price action there, so that made me think - OK, how would I trade that with options, using what I have learned so far?

Both stocks have very low IV, so I will exclude bear call spreads, right (or not?)... So what would I buy then? I recalled some of Cecil Gee ideas about butterflies, and wanted to make a put butterfly on those two, but the market is very wide there (big bid-ask spread), and option volume is pretty low. If those two were something else, more liquid, then I would be interested in YUM 68/70/72 put fly, and UPS 94/96/98... Conclusion: work with the most liquid names, and that's it.
Hope is dangerous in this game.
  • #4,542
  • Edited 2:31pm Aug 21, 2014 2:12pm | Edited 2:31pm
Quoting The Fool
{quote} I am looking for a huge dovish boost to smash SnP 2k on Friday, then a near vertical continuation next week. The SPY calls 9/5 $202.50 short/ 9/20 $205 long still nets $0.03 credit, sitting on hands....

Hey TF, but in that case isn't that short leg too close to the action then? Because SPY are almost at $200?

Edit: You have allready explained scenarios for SPY on previous page, my apologies. I am just too tired... can't wait for market to close, and to hit the sack.
Hope is dangerous in this game.
  • #4,543
  • Aug 21, 2014 3:09pm Aug 21, 2014 3:09pm
Quoting StrayDog
{quote} Hey TF, but in that case isn't that short leg too close to the action then? Because SPY are almost at $200?
Actually, I think it is too close now. SPY up $4 in the last 4 days. So I am looking for a penetration of $200.00 tomorrow, and to see what that does to $205/$207.50 perhaps for a diagonal with the same dates as above. I am still a bit lean on free margin, will get free of some spreads expiring Friday & be better off next week.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,544
  • Aug 21, 2014 11:31pm Aug 21, 2014 11:31pm
http://video.cnbc.com/gallery/?video=3000304219

Cashin makes a good point re: Draghi. What can he do? Only fail.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,545
  • Aug 21, 2014 11:39pm Aug 21, 2014 11:39pm
BAC Dec $18 calls for $0.19 are a steal...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-21_bac.png Size: 72 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,546
  • Aug 22, 2014 5:22am Aug 22, 2014 5:22am
Quoting Cecil Gee
{quote} $usd now needs to clear 82.48 for the above to materialise
had a high of 82.42 before retreating, I just wonder if we're in for a what happened to the USD day, needs to maintain and close above 81.64 to keep the charge to s/p 2000+
  • #4,547
  • Aug 22, 2014 7:33am Aug 22, 2014 7:33am
https://twitter.com/RANsquawk/status/502789418856742912

Attached Image
Hope is dangerous in this game.
  • #4,548
  • Aug 22, 2014 8:20am Aug 22, 2014 8:20am
expectations are skyhigh for Yellen/Draghi to deliver a hyper dovish message. If they don't come through at Jackson Hole, if either of them utter even the least bearish syllable, the markets will slide....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,549
  • Aug 22, 2014 8:46am Aug 22, 2014 8:46am
Hey Cecil, check out what was the biggest option trade yesterday, a call butterfly on YHOO

http://finance.yahoo.com/tumblr/blog...134038805.html

from text:
1. YHOO - Bullish trade in YHOO printed in the morning – buyer of 21,500 x 43,000 x 21,500 of the Oct 40/43/46 call butterfly to open for $0.38. More of that butterfly traded later in the session. YHOO remains near its highest level since mid-March, though the $40 level is important resistance that has not been touched since March 5th. 30 day implied volatility in YHOO is around 42.50, near a 6 month high, in anticipation of the Alibaba IPO expected in mid-September.
Hope is dangerous in this game.
  • #4,550
  • Aug 22, 2014 9:09am Aug 22, 2014 9:09am
I have never traded options,can some one give me advise on how they work,all that keeps popping up over the web is binary options...are the options ye are all trading basically the same???
  • #4,551
  • Aug 22, 2014 9:35am Aug 22, 2014 9:35am
Quoting StrayDog
Sold strangle on AAPL, 89/106 Sep26 for $1.23 credit
That was last Thursday... when AAPL was $97.50... and 89 put was $0.62, 106 call was $0.61... Since then AAPL is moving up, and put side lost 2/3 of the value. The whole strangle was break/even or underwater, because call side was gaining more value than put side would loose. So i decided to close 89 put, since not that much juice left, and bought it back for $0.22. Then I sold another put, this time put 94 Sep26 for $0.71 credit, to keep position live. Idea is to grab a $0.40 profit from previous put, and to sell a more juicy one

Was that a good decision? Time will tell. Currently this is how AAPL stands
https://www.tradingview.com/x/LZvOH6Nu/

Blue line was previous ATH, and that is around $100.70 split adjusted, and red lines are my current 94/106 Sep26 short strangle.
The price was respecting that black channel, but for how long...
Hope is dangerous in this game.
  • #4,552
  • Aug 22, 2014 9:36am Aug 22, 2014 9:36am
Quoting pj9999
I have never traded options,can some one give me advise on how they work,all that keeps popping up over the web is binary options...are the options ye are all trading basically the same???
http://www.cboe.com/LearnCenter/
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,553
  • Aug 22, 2014 9:43am Aug 22, 2014 9:43am
Quoting The Fool
{quote} http://www.cboe.com/LearnCenter/
Thanks mate
  • #4,554
  • Aug 22, 2014 9:58am Aug 22, 2014 9:58am
Interesting situation in DDD... which I completely forgot about and today it is up 3% so far.
I am getting old.
Here is the weekly chart. Price flirted with support there... Bullish put spread like 45/47...

https://www.tradingview.com/x/5cPGfLiF/

And yeah, I completely forgot about GPS ER's ... made a note in my ER's Excel sheet: "Not expecting a big move, try to make a Iron Condor"...
Hope is dangerous in this game.
  • #4,555
  • Aug 22, 2014 11:39am Aug 22, 2014 11:39am
Quoting pj9999
I have never traded options,can some one give me advise on how they work,all that keeps popping up over the web is binary options...are the options ye are all trading basically the same???
https://www.tastytrade.com/tt/shows/...s?locale=en-US
  • #4,556
  • Aug 22, 2014 12:22pm Aug 22, 2014 12:22pm
Interesting opinion.........."Here’s what it will take to trigger the next stock market correction"

http://blogs.reuters.com/anatole-kal...-just-not-yet/
  • #4,557
  • Aug 22, 2014 1:22pm Aug 22, 2014 1:22pm
Quoting njr
Interesting opinion.........."Here’s what it will take to trigger the next stock market correction" http://blogs.reuters.com/anatole-kal...-just-not-yet/
JY kinda whiffed. But Draghi up to bat next, see him warming up over there with the big wood? He could announce a Jubilee and hand over the Eurozone to Father Christmas. Or I dunno wtf. That's what we need though, a general reset. Can't find the button on the pinball machine? It's the one marked "W-A-R".....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,558
  • Aug 22, 2014 1:36pm Aug 22, 2014 1:36pm
Quoting The Fool
{quote} JY kinda whiffed. But Draghi up to bat next, see him warming up over there with the big wood? He could announce a Jubilee and hand over the Eurozone to Father Christmas. Or I dunno wtf. That's what we need though, a general reset. Can't find the button on the pinball machine? It's the one marked "W-A-R".....
The speech!

http://www.ecb.europa.eu/press/key/d...140822.en.html
  • #4,559
  • Aug 22, 2014 1:39pm Aug 22, 2014 1:39pm
Quoting njr
{quote} The speech! http://www.ecb.europa.eu/press/key/d...140822.en.html
lotsa graphs....fell asleep...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-08-22_draghi01.png Size: 21 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,560
  • Aug 22, 2014 1:52pm Aug 22, 2014 1:52pm
Quoting The Fool
{quote} lotsa graphs....fell asleep... {image}
Pretty muted response so far.....zzzzzzzzzzz
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