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Let's Trade Options

  • #5,701
  • Oct 30, 2014 9:16am Oct 30, 2014 9:16am
Too late on TWTR... In premarket I read that 2 top executives were leaving the company, and immediately pictured myself as a buyer of OTM weekly puts .
Note to myself: drink more coffee, multitask you lazy f...

Well.... never mind, but again - LNKD ER's today AH. And I am bearish.

Lets see how similar companies price action after ER's was:
- TWTR down big 15%, and down today
- FB down 10% in AH

More internet companies
- GOOGL & BIDU no mover
- NFLX gigantic down move
- AMZN down
- YELP down
- YHOO up (mostly on BABA frenzy)

So 5 out of 8 down, 2 no-movers, only 1 up....
FB and TWTR both are bigger social media companies... So why would LNKD price go up? In fact it is going down right now.
I am thinking about DIRECTIONAL bearish play, like selling a call spread. Just a few bucks above current price half an hour before close, with risk / reward as close as possible to 1:1.
Hope is dangerous in this game.
  • #5,702
  • Oct 30, 2014 9:20am Oct 30, 2014 9:20am
Looking at LNKD, don't like the $2.50 spreads there....I might save out my margin for a BABA/YHOO play of some kind next week...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,703
  • Oct 30, 2014 9:28am Oct 30, 2014 9:28am
Quoting StrayDog
Calendars example TWTR Oct31/Nov7 41 put calendar... was bought for $0.16, sold today for $0.42... now trades for $0.53... So it can be used for earnings, directionally... Will try that same combo, with weeklies, for some other stock. Also - what would happen in case of no-move? On Single and Double Calendars? Since on diagram biggest wins are if stock moves almost to the short strike.
Now, when TWTR is passed short strikes, and trading @ $40.30 - that calendar is trading for $0.60...

So maybe LNKD could be traded like that also. Short strike Nov7, long strike Nov14 options?
BUT LNKD has much much bigger bid/ask spread, which might be very big problem.

Attached Image (click to enlarge)
Click to Enlarge Name: LNKD-put-calendar.png Size: 75 KB
Hope is dangerous in this game.
  • #5,704
  • Oct 30, 2014 9:40am Oct 30, 2014 9:40am
Quoting The Fool
Watching FB, I still have Nov $71 long puts & they are worth selling, maybe do that today if FB can push down toward $73. Thought about doing a UVXY bull put spread, price of the puts jumps around on that crazy shit.
FB dropping like a brick & my $0.15 sell was hit, maybe shoulda held out for more, but 10/31 expiry & glad to recoup something on that. FB IC worked out pretty well....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,705
  • Oct 30, 2014 9:49am Oct 30, 2014 9:49am
Quoting The Fool
{quote} FB dropping like a brick & my $0.15 sell was hit, maybe shoulda held out for more, but 10/31 expiry & glad to recoup something on that. FB IC worked out pretty well....
good one. Now we will find another winner. I will look for ER's next week now.

Other than LNKD I am interested in SBUX for today.

Also there are GPRO and GRPN today AH, and CVX and XOM torrow BMO.
Hope is dangerous in this game.
  • #5,706
  • Oct 30, 2014 9:50am Oct 30, 2014 9:50am
Quoting StrayDog
TWTR down big 15%, and down today - FB down 10% in AH More internet companies - GOOGL & BIDU no mover - NFLX gigantic down move - AMZN down - YELP down - YHOO up (mostly on BABA frenzy) So 5 out of 8 down, 2 no-movers, only 1 up.... FB and TWTR both are bigger social media companies... So why would LNKD price go up? In fact it is going down right now. I am thinking about DIRECTIONAL bearish play, like selling a call spread. Just a few bucks above current price half an hour before close, with risk / reward as close as possible to 1:1.
Everybody is selling old news social stocks so they can pile in BABA - somebody said it would pop >$125 on next week's ER. It was on the internet so it must be true.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,707
  • Oct 30, 2014 9:59am Oct 30, 2014 9:59am
Quoting The Fool
Thought about doing a UVXY bull put spread, price of the puts jumps around on that crazy shit.
Did a Nov $22/$20 UVXY vertical put spread for $0.57 credit. A bet that S&P will not be making new highs in the next few weeks....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,708
  • Oct 30, 2014 10:07am Oct 30, 2014 10:07am
Quoting The Fool
{quote} Everybody is selling old news social stocks so they can pile in BABA - somebody said it would pop >$125 on next week's ER. It was on the internet so it must be true.
I am certain there is true in first part... sell XYZ to buy BABA. I think this first US ER's - it will be a big move.
Unlike AMZN, BABA which is copy/paste AMZN businesses, proved that it can also be profitable.
Chinese school of copying everything, like GOOGL / BIDU, YHOO / QHOO, NFLX / YOKU... then SFUN and many many names...
AMZN position trimming would be the first thing I would do to get that BABA.

Client / broker relationship
- JUST GIVE ME A PIECE OF BABA!!! YO BROKER - SELL SOMETHING AND GET ME BABA!! NOW!!! IT IS GOING TO THE ROOF.
- What positions would you like me to sell, sir?
- JUST F....NG SELL 10% OF EVERYTHING AND GIVE ME BABA!!! I WAN'T BABA!!!
- Copy that sir. Consider it done.
Hope is dangerous in this game.
  • #5,709
  • Oct 30, 2014 10:15am Oct 30, 2014 10:15am
Quoting The Fool
{quote} Did a Nov $22/$20 UVXY vertical put spread for $0.57 credit. A bet that S&P will not be making new highs in the next few weeks....
I am thinking of Nov bear call spreads
- 201/203 for SPY ($0.65 or so credit) and
- 116/118 for IWM ($0.60 credit)
Hope is dangerous in this game.
  • #5,710
  • Oct 30, 2014 12:14pm Oct 30, 2014 12:14pm
Looking at SBUX, but this is confusing on dough about IVR. I get that on lots of stocks.

Attached Image (click to enlarge)
Click to Enlarge Name: SBUX-ivr.PNG Size: 45 KB
Hope is dangerous in this game.
  • #5,711
  • Oct 30, 2014 1:02pm Oct 30, 2014 1:02pm
Quoting StrayDog
{quote} I am thinking of Nov bear call spreads - 201/203 for SPY ($0.65 or so credit) and - 116/118 for IWM ($0.60 credit)
I hope you held off on these...?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,712
  • Oct 30, 2014 1:14pm Oct 30, 2014 1:14pm
Bears may as well start hibernating early.

http://www.zerohedge.com/news/2014-1...und-allocation
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,713
  • Oct 30, 2014 1:45pm Oct 30, 2014 1:45pm
Quoting The Fool
{quote} I hope you held off on these...?
Yep, didn't take any of those.

But hey, I found some e-mail that I sent to myself from my former work on June... with some good tastytrade vids on calendars:

Option Trading Strategies - Calendar Spreads
Inserted Video


In Low IV, Should You Trade Calendars or Debit Spreads?
Inserted Video


Using Calendar spreads in your option strategy
Inserted Video


Calendar Spreads - Why Tom Sosnoff Doesn't Trade Calendar Spreads
Inserted Video
Hope is dangerous in this game.
  • #5,714
  • Oct 30, 2014 1:56pm Oct 30, 2014 1:56pm
Looking at LNKD Nov7 options, and the bid/ask spreads are horrible on every strike.

I am thinking about short strangle 160/240 Nov21 for $2.10 credit. Estimated move for LNKD is about $16 or so.
With LNKD around $200, this would be $40 away, POP 85-86%... Like that short strangle I did on BIDU. But somehow I do not get god vibes out of this.
Can it drop 20%? I don't know. Can it go up 20% - probably not. Rather would play bearish directionally.
Anyway, weeklies got just shitty bid/ask spreads, (which is too bad since IV on them is very very high)... so best to stick with monthly options.
Hope is dangerous in this game.
  • #5,715
  • Oct 30, 2014 2:10pm Oct 30, 2014 2:10pm
Quoting StrayDog
Looking at LNKD Nov7 options, and the bid/ask spreads are horrible on every strike.

I can't stomach the bs options on LNKD, will sit on dry powder. Holy Smokes, SDog, did they decide to run the bull trap to SnP 2k and then dump? I can't really do anything today as I am locked out of platforms, under the gun at work. Maybe just as well....

I am looking to do something on BABA, maybe BABA/YHOO proxy.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,716
  • Oct 30, 2014 2:37pm Oct 30, 2014 2:37pm
Quoting StrayDog
Looking at LNKD Nov7 options, and the bid/ask spreads are horrible on every strike. I am thinking about short strangle 160/240 Nov21 for $2.10 credit.
Hm... that LNKD strangle just traded for $2.59 credit, thanks to rising price of calls ??? Calls IV is lower than on puts, so there must be some buyers...
Yeah this thing gotta be entered in last half an hour of RTH. Buying a 20% OTM call option? Well that is a cheap shot.

I will not enter anything. Gave up of SBUX Iron Condor, since there is a strike on call side that is missing for me to place that IC like I want.

Looked at CVX and XOM, big skew in option prices there, meaning that puts are much much more expensive than calls with same distance of current price.
That must be effect of oil and those oil stocks recent price action, or sinking like a brick.

I will see tomorrow what lies ahead for next week. Just give us something liquid.
Hope is dangerous in this game.
  • #5,717
  • Oct 30, 2014 2:42pm Oct 30, 2014 2:42pm
Hm...

Attached Image
Hope is dangerous in this game.
  • #5,718
  • Oct 30, 2014 2:42pm Oct 30, 2014 2:42pm
Quoting The Fool
Brazil CB surprises with a 25 bp hike to the SELIC - wow 11.25% - and that is supposedly market-friendly.....
I am not going to argue with the Brazil bulls, EWZ poked above $43 today, if that trend up can continue for a few weeks, my EWZ Nov/Jan calendars are going to hit the jackpot. I did one nearterm EWZ calendar - 10/31/Dec $47, and that is sitting at 2x. I have babysat these things for so long, if they work out m/l as I planned I will have to pinch myself....could it be true? EWZ to $48 around Thanksgiving would pay me 10x on the Nov/Jan $48 calendar....that truly would be a Festivus miracle.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,719
  • Oct 30, 2014 3:03pm Oct 30, 2014 3:03pm
Quoting The Fool
{quote} I am not going to argue with the Brazil bulls, EWZ poked above $43 today, if that trend up can continue for a few weeks, my EWZ Nov/Jan calendars are going to hit the jackpot. I did one nearterm EWZ calendar - 10/31/Dec $47, and that is sitting at 2x. I have babysat these things for so long, if they work out m/l as I planned I will have to pinch myself....could it be true? EWZ to $48 around Thanksgiving would pay me 10x on the Nov/Jan $48 calendar....that truly would be a Festivus miracle.
Hope that plays out for you in that miracle way. Emerging markets tends to get that wild swings, so why not? You can always take partial profits along the way.
Hope is dangerous in this game.
  • #5,720
  • Edited 11:51pm Oct 30, 2014 10:46pm | Edited 11:51pm
Quoting The Fool
I am looking to do something on BABA, maybe BABA/YHOO proxy.
I might be bullish BABA. I could play a debit vertical call spread. A $0.35 debit will get me in a Nov $103/$104. I give up the possibility of unlimited profit, but, if I hold to expiration the max profit is $0.65 and the downside b/e is ~$102.50. Practically, BABA would have to be out beyond $107.75 for the P/L to be above $0.60, and I'd have to wonder about the spreads on the short call I would have to buy back b4 expiry....

I could fund the above with an 11/7 $92/$90 bull put spread for a $0.35 credit....

If I just wanted to do long calls, but only wanted to spend $0.35, I'd have to go out to $113 on the weekly (11/7)...I might do some of both.

The 11/7 $113 calls, if bought when BABA at $99, b/e at $110 (doubt it). P/L at $0.60 when BABA at $11 (on 11/7)
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-10-30_BABADDCALLS.png Size: 45 KB
"If The Fool persists in his Folly he will become wise." - William Blake
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