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  • #5,761
  • Edited 12:27pm Nov 5, 2014 12:07pm | Edited 12:27pm
In 15 trading days, SPY has come up $20. I am looking at SPY Dec/Jan call diagonals: where will SPY be on 12/19? That's 28 trading days from now....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,762
  • Nov 5, 2014 12:09pm Nov 5, 2014 12:09pm
Quoting The Fool
... I like calendars since the margin requirement is easy - just the debit to put on the spread. The IWM $125 call Dec/Jan costs $0.30, can return 4x that if things work out...
Nice idea on IWM. A way to play Santa Claus rally.

About TSLA... IV is so high, that you can get enough credit for just selling a 1 SD call, if you are bearish. It can hardly go up twice the estimated move... but it can move considerably to the downside, like any other momo stock (think about NFLX)... Given all of that into consideration, I will skip weekly options. Since NFLX droped 25% to $330 - but then just rally, rally, rally...to $390+ It provided time for the ones who shorted 350 strike on monthlies, for example. So I am thinking about a nice $100 wide strangle for TSLA, with Nov monthlies, like this:

Attached Image (click to enlarge)
Click to Enlarge Name: TSLA-wide-strangle.png Size: 74 KB


In case of minimal movement until open, that would lose 50% of its value... weeklies would lose like 90%+.
Otherwise - there are 17 DTE for adjustments. It is about $2.70 credit now. I would close that tomorrow for any gain above $1.00... margin req about $2,600 for this.
Hope is dangerous in this game.
  • #5,763
  • Nov 5, 2014 12:17pm Nov 5, 2014 12:17pm
yeah that TSLA strangle looks pretty good. TSLA been burning cash and I doubt there's gonna be a pop to the upside. otoh we're in a very bullish environment and that might mitigate big move down potential. Maybe not though - disappointment in TSLA ER could snowball. After all, still plenty time to get in BABA....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,764
  • Nov 5, 2014 12:27pm Nov 5, 2014 12:27pm
Quoting Cecil Gee
{quote} If FB close under 75.30 then I'm long puts, so your bull put spread may have a chance
I'm already in once FB broke 75.30, I'm not waiting as there is a lot of momentum so took the $74 put for Friday 7 NOV expiration

FB Nov 2014 74.000 put (FB141107P00074000)
-OPR
0.28 https://s.yimg.com/lq/i/us/fi/03rd/up_g.gif 0.06(27.27%) 17:56

FB is now trading at 75.18

Facebook, Inc. (FB)
-NasdaqGS
75.18 https://s.yimg.com/lq/i/us/fi/03rd/down_r.gif 0.58(0.77%) 6:25PM GMT - Nasdaq Real Time Price
  • #5,765
  • Nov 5, 2014 12:32pm Nov 5, 2014 12:32pm
Yeah... lots of other stuff for expressing a bearish attitude on TSLA.

Like this - Reverse Jade Lizard, a.k.a. "Twisted Sister" - I just love the names... imagine you told someone - "I just made money on Twisted Sister", ....

So, this got you NO DOWNSIDE risk, since that $2.5 put spread is fully covered by credit received (midpoint for whole 3 option combo is currently $2.56 on IB).

Attached Image (click to enlarge)
Click to Enlarge Name: TSLA-RJL.png Size: 79 KB


This is also with monthlies, since it is difficult to create this combo with weeklies.

More simply is to JUST SHORT THE CALL... and do it with weeklies or monthlies, OR for define risk - bear call spread Nov7 240/242.50 - for like $1.05 credit. That will still make money even if stock is frozen or up a bit. POP for that is off course lower.

I am definitely not bullish, more like neutral/bearish on TSLA.
Hope is dangerous in this game.
  • #5,766
  • Nov 5, 2014 12:40pm Nov 5, 2014 12:40pm
Quoting Cecil Gee
I'm already in once FB broke 75.30, I'm not waiting as there is a lot of momentum so took the $74 put for Friday 7 NOV expiration
So far so good CG! Good call.


Add-on
Ups!
Facebook Reports 50,000 Government Requests for User Data
no wonder it is down...
Hope is dangerous in this game.
  • #5,767
  • Nov 5, 2014 12:41pm Nov 5, 2014 12:41pm
Quoting StrayDog
Yeah... lots of other stuff for expressing a bearish attitude on TSLA. Like this - Reverse Jade Lizard, a.k.a. "Twisted Sister" - I just love the names... imagine you told someone - "I just made money on Twisted Sister", .... So, this got you NO DOWNSIDE risk, since that $2.5 put spread is fully covered by credit received (midpoint for whole 3 option combo is currently $2.56 on IB).
no downside risk? spank me. I need to look into these here Jade Lizards.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,768
  • Nov 5, 2014 12:43pm Nov 5, 2014 12:43pm
Quoting StrayDog
{quote} So far so good CG! Good call.
thx, if TSLA can stay beneath 234 by close and open abelow that then I'm looking at 218 test on it
  • #5,769
  • Nov 5, 2014 12:47pm Nov 5, 2014 12:47pm
Quoting Cecil Gee
{quote} I'm already in once FB broke 75.30, I'm not waiting as there is a lot of momentum so took the $74 put for Friday 7 NOV expiration FB Nov 2014 74.000 put (FB141107P00074000) -OPR 0.28 {image} 0.06(27.27%) 17:56 FB is now trading at 75.18 Facebook, Inc. (FB) -NasdaqGS 75.18 {image} 0.58(0.77%) 6:25PM GMT - Nasdaq Real Time Price
I'm with you in spirit, mate, FB $74 or even $73 looks doable by Friday.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,770
  • Nov 5, 2014 12:49pm Nov 5, 2014 12:49pm
Quoting The Fool
{quote} I'm with you in spirit, mate, FB $74 or even $73 looks doable by Friday.
to be honest looking at 72, just don't know if it will happen by friday
  • #5,771
  • Nov 5, 2014 12:52pm Nov 5, 2014 12:52pm
Quoting Cecil Gee
{quote} thx, if TSLA can stay beneath 234 by close and open abelow that then I'm looking at 218 test on it
just realised TSLA has its earnings after the bell, it still needs to trade above 234 on the open tomorrow if the results are good for tsla to be bullish otherwise 218 then 210 and 193
  • #5,772
  • Edited 1:35pm Nov 5, 2014 12:57pm | Edited 1:35pm
Quoting The Fool
In 15 trading days, SPY has come up $20. I am looking at SPY Dec/Jan call diagonals: where will SPY be on 12/19? That's 28 trading days from now....
$0.24 debit max risked on this Dec $213/Jan $214 call calendar. It can return $1.20+ if SPY settles between $212-213 on expiration day
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,773
  • Nov 5, 2014 12:57pm Nov 5, 2014 12:57pm
Quoting Cecil Gee
{quote} thx, if TSLA can stay beneath 234 by close and open abelow that then I'm looking at 218 test on it
Yes, big support area around there $214 - $218 ...

But ha! And I say ha! again... Just look at the call strike.
I know Robyn preferring weeklies, but my cojones are smaller so I will go with monthlies.

Attached Image
Hope is dangerous in this game.
  • #5,774
  • Nov 5, 2014 1:03pm Nov 5, 2014 1:03pm
Quoting The Fool
{quote} $0.24 debit max risked on this Dec $113/Jan $114 call calendar. It can return $1.20+ if SPY settles between $212-213 on expiration day {image}
You can probably better time SPY than IWM. Both very liquid, and good ideas for bullish bias... Nice, TF.

Joke or not?
What other bias except bullish for the broad market should we really have? The mofos are just going to go up and up and than more QE, and then some more milk and cookies, with occasional scares, and... just sell 1SD OTM puts and wait... can it really be that simple?
Hope is dangerous in this game.
  • #5,775
  • Nov 5, 2014 1:30pm Nov 5, 2014 1:30pm
LNKD
I saw this news yesterday... :

  1. LinkedIn (NYSE:LNKD) plans to sell $1.15B worth of convertible senior notes due 2019. Initial purchasers are expected to have a $172.5M overallotment option.
  2. With LinkedIn possessing over $2.2B in cash/marketable securities at the end of Q3 and no debt, there's a good chance some of the offering's proceeds will be directed towards acquisitions.

... these offerings almost always have a short-term negative impact on stock. I just forgot about that info ... LNKD shed $10 today. Talking about a LONG OTM weekly puts here right at open... Can't compare FB and TWTR options with LNKD options - the first two are ultra liquid with one cent bid/ask spread, but still...

Hope is dangerous in this game.
  • #5,776
  • Nov 5, 2014 2:05pm Nov 5, 2014 2:05pm
Quoting StrayDog
.... So I am thinking about a nice $100 wide strangle for TSLA, with Nov monthlies....
I entered that Nov 175/275 short strangle as a TSLA ER's play.
Put for $1.18 and call for $1.45, total $2.63 credit. If i can bank tomorrow anything above 1/3 of credit received, I will close.

Will do nothing for QCOM, WFM or any other... that is it for today.
Hope is dangerous in this game.
  • #5,777
  • Nov 5, 2014 3:03pm Nov 5, 2014 3:03pm
Quoting StrayDog
{quote} I entered that Nov 175/275 short strangle as a TSLA ER's play.
Good Luck, SDog. I find it hard lately to concentrate on many trades & will focus on the indices I suppose. I got in the IWM diagonal below of a $0.07 debit. Had it queued up for even money earlier, but missed it. $0.07 makes $0.70+ if things work out perfectly and IWM trades between $120.50 and $122.00 on the Dec expiry.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,778
  • Edited 10:35pm Nov 5, 2014 3:25pm | Edited 10:35pm
diagonals can be tricky & you have to be on guard against moves to that P/L cliff on the ends. If you have placed your strikes too close you have to watch for fast moves in that direction & assess daily. The P/L graph shows the same IWM diagonal as above, but on Dec 1. B/E is lower, at $121.65, and max profit is of course lower - about $0.17 at $118.25. It's even worse, earlier. The trick part lies between being too cautious, killing the trade early for low profit, or hanging in and waiting for the front month decay to help the spread P/L. Someday (soon) I will have some rules about how to trade these in such a scenario.

Calendars, otoh, are pretty painless. I can forget them for a while and know I will not be hurt. The trick there, of course, is getting in them cheaply.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,779
  • Nov 5, 2014 6:21pm Nov 5, 2014 6:21pm
Quoting The Fool
yeah that TSLA strangle looks pretty good. TSLA been burning cash and I doubt there's gonna be a pop to the upside. otoh we're in a very bullish environment and that might mitigate big move down potential. Maybe not though - disappointment in TSLA ER could snowball. After all, still plenty time to get in BABA....
https://finance.yahoo.com/news/tesla...211230584.html

Najarian was right. I still think TSLA may be a good one to fade. Oil glut, more competition, eps downgrade, etc.....I'll be watching for the uptrend to peter out, bet it won't take long.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,780
  • Edited 10:20pm Nov 5, 2014 9:52pm | Edited 10:20pm
I need to get in some bearish positions that match the SPY and IWM bullish spreads shown above. I don't really see a pullback in the cards, but that's reason enough to be on guard.

IWM Dec/Jan debits $0.18 and profits between $97.25 and $110.25 at expiration.
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"If The Fool persists in his Folly he will become wise." - William Blake
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