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Let's Trade Options

  • #5,881
  • Edited 11:48am Nov 14, 2014 11:28am | Edited 11:48am
Quoting StrayDog
I see increase in BABA IVR...
Trade idea (generates about $9.5 of theta decay per day):

Attached Image (click to enlarge)
Click to Enlarge Name: BABA_Dec_100-135-ShortStranglee.png Size: 76 KB


strikes are $15 bellow and $20 above the price... equidistant calls are more expensive than the puts.

Add-on
I am in above short strangle Dec 100/135 for $2.07 credit. Entered position when BABA traded around $114.90.
Hope is dangerous in this game.
  • #5,882
  • Nov 14, 2014 11:51am Nov 14, 2014 11:51am
Quoting StrayDog
{quote} Trade idea (generates about $9.5 of theta decay per day): {image} strikes are $15 bellow and $20 above the price... equidistant calls are more expensive than the puts. Add-on I am in above short strangle Dec 100/135 for $2.07 credit. Entered position when BABA traded around $114.90.
Looks good. BABA has not been trading long enough to really show what he can do, so hopefully $135 is far enough out. What kind of margin hit did you take, per each strangle?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,883
  • Nov 14, 2014 12:12pm Nov 14, 2014 12:12pm
Quoting The Fool
{quote} Looks good. BABA has not been trading long enough to really show what he can do, so hopefully $135 is far enough out. What kind of margin hit did you take, per each strangle?
I did only one - - and margin req is EUR 1,083...

Need margin for other trades, looking around... was thinking about selling BBRY Dec 10 puts... prolly will skip that.
Hope is dangerous in this game.
  • #5,884
  • Nov 14, 2014 12:26pm Nov 14, 2014 12:26pm
Learning...

Quoting StrayDog
With TWTR around $41, I shorted a 1 SD strangle 34/48 Dec19 with 45 DTE, for $1.07 credit. Price skew is to the upside, since puts are $0.45 and calls are $0.62... {image} With b/e points $32.93 and $49.07... this has to move 20%+ either way... plan is not to hold until expiration, rather to close according to "cheat sheet"
That was on 11/5... from $1.07 credit it was $0.66 earlier today (now $0.73)... So almost 40% of value lost in 9 days. And TWTR was all over the place. I closed that way to early, and did not stick to my plan. According to "cheat sheet", it takes 15 days for 40%... So, basically, if you have that in 9 days - close and redeploy... or partially close if you have more than 1 strangle... learning, learning...
Hope is dangerous in this game.
  • #5,885
  • Nov 14, 2014 12:36pm Nov 14, 2014 12:36pm
Quoting StrayDog
According to "cheat sheet", it takes 15 days for 40%... So, basically, if you have that in 9 days - close and redeploy... or partially close if you have more than 1 strangle... learning, learning...
Takes time. It's good you are keeping notes - not much record available for TWTR. There's alot to be said (I've said it before) for limiting to a short number of instruments, learning how the options behave at different times, in different scenarios. I am still a beginner...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,886
  • Nov 14, 2014 12:49pm Nov 14, 2014 12:49pm
Quoting The Fool
{quote} Takes time. It's good you are keeping notes - not much record available for TWTR. There's alot to be said (I've said it before) for limiting to a short number of instruments, learning how the options behave at different times, in different scenarios. I am still a beginner...
Yes, exactly. Like 10-15 stocks... Since I have time to sit the entire trading session in front of a screen, I often look at various options, previous trades and so on... Learning about IV relationship to the price, probabilities... Yesterday I was watching Rising Star videos of Tony from Mexico and Robyn... they both did 42% YoY in 2012... on LARGE accounts... Tony said "you can be good in 3 months"... I see that, since I have never ever learned so much like last 3 months... hundreds of videos, books, screen time, for hours each and every day... Off course I still don't know jack shit about options, but a hell of a lot more than 3 months ago. My number of trades are still small, like 60 in 3 months, learning takes time. Next year I plan to trade stocks also - on extremes - like premarket and after hours, when you can't trade options. For example that TWTR post ER's upside move of 30% a few months back. It was common sense that it will give back some. You could short the mofo at $50 in AH.
Hope is dangerous in this game.
  • #5,887
  • Nov 14, 2014 1:14pm Nov 14, 2014 1:14pm
I have downloaded this video few months back. Good stuff for all traders. Will watch it again.

Inserted Video
Hope is dangerous in this game.
  • #5,888
  • Nov 14, 2014 1:20pm Nov 14, 2014 1:20pm
Quoting StrayDog
{quote} Yes, exactly. Like 10-15 stocks... Since I have time to sit the entire trading session in front of a screen, I often look at various options, previous trades and so on... Learning about IV relationship to the price, probabilities... Yesterday I was watching Rising Star videos of Tony from Mexico and Robyn... they both did 42% YoY in 2012... on LARGE accounts... Tony said "you can be good in 3 months"... I see that, since I have never ever learned so much like last 3 months.
Keep on keepin on, SDog. My own study time comes and goes. I'll be taking most of December off, will try to catch up on it then. I still put on dumb trades and fail at good management, when I can get those bugs cleared out, I will start to up my ante. Like that UVXY bull put spread - Nov $17/$20.50 - used way too much margin and took too long for what I will get ($0.33) - and it looks more like I can run that out to expiry for full profit, but with that wild mofo you never know. I have generally gotten better at looking at margin risk/reward with a more critical eye - trading on ToS has helped me there.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,889
  • Nov 14, 2014 1:39pm Nov 14, 2014 1:39pm
took a late trade on FB, FB is struggling to go beneath 74 so I have chance a long call option just for the end of day

long 75 call for 6c, a risk worthy trade

FB Nov 2014 75.000 call (FB141114C00075000)
-OPR
0.06 https://s.yimg.com/lq/i/us/fi/03rd/down_r.gif 0.07(53.85%) 19:19

FB at 74.86, 16c higher from where I got in

Facebook, Inc. (FB)
-NasdaqGS
74.86 https://s.yimg.com/lq/i/us/fi/03rd/up_g.gif 0.61(0.82%) 19:34 - Nasdaq Real Time Price
  • #5,890
  • Nov 14, 2014 1:43pm Nov 14, 2014 1:43pm
Quoting StrayDog
Hi, CG! As TF would said "lot of dry powder" on my account right now... I only have some long VIX positions from before... underwater off course. Just looking everywhere... Lot of tech stocks in red now Add-on With TWTR around $41, I shorted a 1 SD strangle 34/48 Dec19 with 45 DTE, for $1.07 credit. Price skew is to the upside, since puts are $0.45 and calls are $0.62... {image} With b/e points $32.93 and $49.07... this has to move 20%+ either way... plan is not to hold until expiration, rather to close according to "cheat...
SD your on the right track.
  • #5,891
  • Nov 14, 2014 2:56pm Nov 14, 2014 2:56pm
Quoting The Fool
lotsa options activity in GDX last few days, IVR is high {image}
T.F. / S.D. any time you guys spot massive activity like T.F. MENTIONED ABOVE let me be aware of it please
  • #5,892
  • Nov 14, 2014 3:48pm Nov 14, 2014 3:48pm
Will do, mate. Maybe 1-2 times a week I check the list of options (high volume, etc) that you can find here:

http://finance.yahoo.com/options/

Also, I can look at real-time "time and sales" options data that streams on ToS - I get a lot of useful info there. If you don't have "time and sales" data on your platform but want to see something, let me know & I will put up a screenshot.

Have a good weekend all. This was an ugly flat week, looks like S&P gained 7 points, about 0.3%. BS at PBR looks like it will ruin my EWZ call calendars, but I have another month for something good to happen there....not hopeful.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,893
  • Nov 14, 2014 8:35pm Nov 14, 2014 8:35pm
"Rumors of Swiss repatriation vote sends gold and silver skyrocketing"

http://www.examiner.com/article/rumo...r-skyrocketing

I have been watching this one. So I usually get my UFO news from The Examiner, but now if they are reporting on the Swiss gold repatriation referendum, it must be a BFD.

Gold was up 2.5% today. Maybe Fed Heads talking down the USD had something to do with it. (Witness good bounce for crude, too.) Maybe the Swiss effect is real. Are we heading for another binary event, another pivotal election? OMG my bunghole is still sore from my Brazilian adventure....

Well, let's look at some gold trades.....the vote is 11/30.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,894
  • Nov 14, 2014 8:40pm Nov 14, 2014 8:40pm
GLD IVR at 100%. Quelle surprise, right? GDX chart looks the same.
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-11-14_gld.png Size: 142 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,895
  • Edited 10:27pm Nov 14, 2014 8:59pm | Edited 10:27pm
So, like Elmer Fudd, I think I'll go hunting for some....Wabbits? No, for skew.....

...didn't find what I was looking for (front/back skew scenario.) But I did come up with this whacky trade - the idea is that GLD would rise (or at least range flattish)ahead of the referendum, so you can sell puts for credit up until Nov4 - the Friday expiry b4 the vote. Then you can use that credit to fund a call vertical debit spread. The result is shown below, it's safe down to $113.29 and yields a max of $1.00/contract, which take $200/ea to put on.
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-11-14_gldcombo.png Size: 63 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,896
  • Nov 14, 2014 10:58pm Nov 14, 2014 10:58pm
something easier, maybe not too farfetched to see gold backfill the Oct down gap, could we see GLD $115 to $120 by Friday? A $0.09 risk could pay $.90
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-11-14gldvert.png Size: 54 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,897
  • Nov 14, 2014 11:45pm Nov 14, 2014 11:45pm
Quoting The Fool
oh man, I should never have gone to Brazil. PBR..... {image}
I'm not sure I want any more PBR action, but this was the biggest trade on Friday - somebody did 10k of this calendar at a $0.37 debit. If you made it to Jan expiry with PBR trading <$11.00, you'd be left with the Apr $11 long call, which could be worth beaucoup if PBR could move back into its typical range around $15+/-
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-11-14_pbrcal.png Size: 53 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,898
  • Nov 15, 2014 8:41am Nov 15, 2014 8:41am
BABA to the moon? Interesting trade I saw, somebody did 30x at $3.00 debit. The b/e near expiry (Jan '17) is $125.75 and anything over $140.65 pays $1,200 (4x) or better. Max P=$1,639 @ ~$151.90... 2nd graph shows p/l in Jan '16 - b/e at $95 (note price slices with reduced P). The closer to the present, the lower the b/e - down to <$90...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2014-11-15_BABA1.png Size: 62 KB
Click to Enlarge Name: 2014-11-15_baba2.png Size: 30 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,899
  • Nov 15, 2014 9:16am Nov 15, 2014 9:16am
no risk of loss?
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-11-15_baba3.png Size: 58 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #5,900
  • Edited 5:09pm Nov 15, 2014 12:16pm | Edited 5:09pm
http://www.forexfactory.com/showthre...99#post7850699

coming due...GMCR reports 11/19 ah. We'll find out if the ToS P/L analyzer is accurate. The call diag I paid $0.02 for should be worth $0.76 on 11/18, if the share price stays the same. If it moves up, more P, fine. The put diag not as good, but still makes a small profit - maybe $0.10. No way will I hold this thru the ER...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2014-11-15_gmcr1.png Size: 62 KB
Click to Enlarge Name: 2014-11-15_gmcr2.png Size: 58 KB
Click to Enlarge Name: 2014-11-15_gmcr3.png Size: 27 KB
"If The Fool persists in his Folly he will become wise." - William Blake
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