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Let's Trade Options

  • #6,061
  • Nov 30, 2014 11:39am Nov 30, 2014 11:39am
Quoting The Fool
thanks, SDog, I'll have to read that when I get more coffee in me. I see they're already calling the Swiss gold vote "no" - which was presumed for weeks before anyway. I will be watching gold in early Asian Monday. I am in a Dec/Dec4 $110/$109 GLD diagonal that may be challenged. Perhaps "no" was priced in, but the OPEC "no" also helped drag it down heavily on Friday. Idk though, with the various sovereign moves around gold lately, I kinda think the price will be supported. We'll see. The vid clip below shows the P/L progression in my double diagonal...
I'd like Gold to bounce around at these levels for a week or two, then make a straddle trade on GLD before the next FOMC MEETING. Heavy data this week and plenty of speeches from people, FOMC minutes on 19 Dec, looking out to FEB 2015 and 5 strikes out, cus this gold will move big
  • #6,062
  • Nov 30, 2014 11:58am Nov 30, 2014 11:58am
Well I think Gold and Gold stocks are going to bull heavy this week seeing the dollar consolation being over now... Oil dropping to 68-60 range wiill see gold plummeting to $1100-$980 range the only thing that will save gold is India and China heavy buying during holiday season...
  • #6,063
  • Nov 30, 2014 1:01pm Nov 30, 2014 1:01pm
Quoting poseikwame
Well I think Gold and Gold stocks are going to bull heavy this week seeing the dollar consolation being over now... Oil dropping to 68-60 range wiill see gold plummeting to $1100-$980 range the only thing that will save gold is India and China heavy buying during holiday season...
you meant USD consolidation, I'm sure - well that remains to be seen, but I'd agree further USD strength should be on tap, and soon if the ECB makes euro dovish moves in the coming week. Also agree fundies look to be lining up contra commodities, but for gold the case for some support hardening can be made. Maybe just wishful thinking on my part, I might have to take a loss on my GLD put diagonal if gold dips much below $1,100...

Are you trading options?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,064
  • Nov 30, 2014 1:11pm Nov 30, 2014 1:11pm
http://www.businessinsider.com/bakke...in-red-2014-11

Sniff out the drillers in the Bakken/Permian basins for potential short plays....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,065
  • Nov 30, 2014 2:24pm Nov 30, 2014 2:24pm
OPEC is tryin' to kill Santa! Lock n Load!

http://video.cnbc.com/gallery/?video=3000333299

http://www.forbes.com/sites/michaelp...arket-at-risk/
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,066
  • Nov 30, 2014 5:40pm Nov 30, 2014 5:40pm
/YG down ~$25 in early Asia. was as low as $1141. Down below $1110 is my hurt zone. /CL down more also, to $64.69 now.....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,067
  • Nov 30, 2014 6:11pm Nov 30, 2014 6:11pm
natgas futures down $0.50 in the last week. If the oil rout continues and weak hand frackers start folding, the natgas supply will be diminished right in the middle of the high seasonal demand. In other words, the oil rout could break natgas out of its low range. I am watching CHK for a dip to its recent low, <$17. Strong natgas hands could rebound fast...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,068
  • Nov 30, 2014 6:43pm Nov 30, 2014 6:43pm
Quoting The Fool
I am watching CHK for a dip to its recent low, <$17. Strong natgas hands could rebound fast...
will be watching, may be able to bring a vertical like this lower, $23/$24 would be better. $0.10 risked can pay $0.90 on the one shown...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,069
  • Nov 30, 2014 7:59pm Nov 30, 2014 7:59pm
A big diagonal spread I see somebody did Fri, CHK stays under $23.50 by Dec4 expiry and he owns the Apr $28 calls for free
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,070
  • Nov 30, 2014 11:02pm Nov 30, 2014 11:02pm
looking thru the time/sales data I see butterflies usually trading very short-term, something I also hear Liz n Jenny reiterate. Makes sense, no? Since you don't really get into the meat of the profit potential of the trade until near expiry, why wait? So it seems the BrkWB is a nice play on weeklies that can be run continuously, for income. Enter Thur/Fri or Monday and look for max P on following expiry Friday. Somebody school me if I am sounding stoopid. Here's an example, the GLD BrkWB eats $300 margin each spread, $0.24 debit pays up to $1.20 if GLD finishes at ~$109.50/---- b/e's are at $104.85 and $112.55.

IVR on GLD 100%....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,071
  • Nov 30, 2014 11:33pm Nov 30, 2014 11:33pm
/ES selling off a bit overnight, perhaps the US indices have topped out? SPY may get a little iv pop tomorrow & I might try a weekly long BrkWB w/ calls. I am skittish about spreads on the short leg double for these so I will have to be mindful of that in ul selection & SPY is about as liquid as it gets in equities/etf's...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,072
  • Dec 1, 2014 1:14am Dec 1, 2014 1:14am
Interesting article with nice charts

The Black Friday Massacre

Summary

  1. Friday was a massacre for energy investors.
  2. Following the announcement by OPEC on Thursday that it would keep its production target unchanged, the price of oil cratered lower by more than 10%.
  3. The stocks of various U.S. oil companies were also completely mauled once U.S. markets reopened after the Thanksgiving holiday for a shortened trading session on Friday.
  4. After the pullback, it is worthwhile to explore whether attractive buying opportunities are now presenting themselves in the energy space or if investors are better served to wait.


Add-on

The Pros And Cons Of Collapsing Oil Prices In 2014

Hope is dangerous in this game.
  • #6,073
  • Dec 1, 2014 1:18am Dec 1, 2014 1:18am
Quoting StrayDog
After the pullback, it is worthwhile to explore whether attractive buying opportunities are now presenting themselves in the energy space or if investors are better served to wait.
lots of action still to come. Gold futures have bounced >$20 from their prior low.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,074
  • Dec 1, 2014 1:33am Dec 1, 2014 1:33am
the gurus are not big fans of weekly focus strategies
https://www.tastytrade.com/tt/shows/...4?locale=en-US
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,075
  • Edited 7:50am Dec 1, 2014 7:29am | Edited 7:50am
Quoting The Fool
the gurus are not big fans of weekly focus strategies https://www.tastytrade.com/tt/shows/...4?locale=en-US
Yeah, as hard core premium sellers, I am sure they will avoid gamma risk and thus sell options with more DTE.

But their partner is doing it every week... on Mondays he usually sell options on expensive stocks, and with strikes very close to the price, almost ATM. Since he is receiving large credit, b/e point is a bit further, but not much, maybe 1%... Good if hit it right, if not - here comes the shares, unwanted or not. For this you simply must have a portfolio margin account, and plenty of "dough" on it.
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And another extreme - very high POP since the option is far, far OTM... Highly inefficient trade for small accounts, since you would use over $3,000 of margin to make up to $50... But he is doing it (in this case) to defend short calls. On portfolio margin account, that margin would be much lower, like 60-70% lower. Then you can trade more and make a series of small wins. POP 95%...
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I will watch the video now, seems to me I didn't watch that one, looking interesting.


"China data disappointing" hm... So, now it is not good being in line.
Starting late today, I have to catch up... and I will browse trough weekly / daily charts of 15-20 stocks today to see if there is something interesting.
Hope is dangerous in this game.
  • #6,076
  • Edited 8:38am Dec 1, 2014 8:25am | Edited 8:38am
Moody's lowers Amazon outlook to negative from prior stable, reaffirms Baa1 rating......

1) I am in AMZN Jan 345/350 bear call spread for $1.35 credit. 47 DTE.

AAPL
2) Looking to exploit vol crush after sellof in AAPL, IVR jumped to 65 - I entered 1 SD short strangle, Jan 104.29/127.14 for $1.90 credit.
Hope is dangerous in this game.
  • #6,077
  • Dec 1, 2014 10:04am Dec 1, 2014 10:04am
Quoting The Fool
Idk though, with the various sovereign moves around gold lately, I kinda think the price will be supported. We'll see. The vid clip below shows the P/L progression in my double diagonal from 12/3 thru expiry... http://screencast.com/t/nqmbXy1ksT
pretty impressive gold bounce today, almost $100 in futures, I am just hanging on for a ride between GLD $110-$120...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,078
  • Dec 1, 2014 1:13pm Dec 1, 2014 1:13pm
Quoting The Fool
{quote} pretty impressive gold bounce today, almost $100 in futures, I am just hanging on for a ride between GLD $110-$120...
I got in nothing new today, missed most of the NY session. Tried to get in a CHK Dec/Jan $24 call calendar near the end, never got filled. I need cheap calendars. CHK w/ poor bid/ask spreads, I just want to cheapen the long calls, will look for a spread further out anyway later.

Big move down, big bounce up in oil & gold, I will have to let the yo-yo settle down & see what's what. Will be hesitant until after the ECB has its say. Big dovish news there and we see more USD strength, resumption of commodity slide, Santa rally green light....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,079
  • Edited 10:47pm Dec 1, 2014 1:40pm | Edited 10:47pm
http://uk.businessinsider.com/qa-wit...lation-2014-11

MSW: What will be the turning point that makes it right? You say you see deflation all around you. You expect more deflation. So, why haven’t the markets down already? It presumably is down to the constant money printing.
RN: The dollar, I think, is key to this. I’ve got a little chart of the dollar in my brain. It’s only in the last three or four months that it’s really become strong and really become a very strong propellant on the upward side. I think that’s the catalyst. I can analyse all these factors. But until the dollar starts to go up, that’s when you say, “Well, this could be the time.”
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,080
  • Edited 8:31pm Dec 1, 2014 7:53pm | Edited 8:31pm
this is a good one that demolished my m.o. for calendars....

https://www.tastytrade.com/tt/shows/...4?locale=en-US
"If The Fool persists in his Folly he will become wise." - William Blake
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