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Let's Trade Options

  • #6,181
  • Dec 9, 2014 9:29am Dec 9, 2014 9:29am
O yeah, keep pressing THE BUTTON...

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Hope is dangerous in this game.
  • #6,182
  • Dec 9, 2014 10:37am Dec 9, 2014 10:37am
Was watching gold last day or so & was afraid this might happen, need a pull back towards $1,200 and another 5-6 days....moves over $1250 and I will have to think about bailing
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,183
  • Dec 9, 2014 11:20am Dec 9, 2014 11:20am
LULU moving toward my calendar target $50, LULU ER's bmo 12/11, so I have until tomorrow to get closer - if it will get close to $50 tomorrow I will close for decent profit rather than risk a sharp move lower post-ER and complete loss....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,184
  • Dec 9, 2014 11:31am Dec 9, 2014 11:31am
ORCL moving up also today towards my $42 calendar strike. I paid $.05 for this one and will try to exit >$0.20 next week - ideal would be it pins on $42 just before the ER - IVR is ramping up, that might pay $0.40, we'll see...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,185
  • Dec 9, 2014 11:34am Dec 9, 2014 11:34am
Quoting The Fool
LULU moving toward my calendar target $50, LULU ER's bmo 12/11, so I have until tomorrow to get closer - if it will get close to $50 tomorrow I will close for decent profit rather than risk a sharp move lower post-ER and complete loss.... {image}
Exactly.


Well, BTFD crowd have plenty of ammo, so far.
COST ER's tomorrow BMO. Maybe I will do something on it. Later.

Edit: I will probably skip COST. The stock doesn't move much (up to 3%), so buying something on it is out of the question.
For selling premium, not enough juice in the options, only possibility is short straddles or Iron Fly, but I don't like doing that on $142 stock, so... next, please...
Hope is dangerous in this game.
  • #6,186
  • Dec 9, 2014 11:48am Dec 9, 2014 11:48am
Quoting StrayDog
Looks like a follow trough of yesterdays price action after all. Unless BTFD crowd pull some reserve ammo. But, this could be another correction, maybe again -10%? And crying children looking at their parents with questions on their faces... "Where is Santa?" Bah... That was just sarcasm. FED to the rescue... again. VIX another 20% up for today? Man, TF! That VXX call spread was excellent idea!
Fed heads have been out talking down the Dec FOMC shock potential, saying "considerable time" phrase will remain - yesterday Reuters ran articles pretty much saying that was a done deal. But I will wait and see. If they keep it dovish we will see a resumption of Santa rally, as you suggest. Oil traders I know some say we have bottomed there, but I don't believe that, either. I am still shopping upside diagonals on the beat down oil patch majors, though...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,187
  • Edited 12:19pm Dec 9, 2014 12:00pm | Edited 12:19pm
Quoting The Fool
Oil traders I know some say we have bottomed there, but I don't believe that, either. I am still shopping upside diagonals on the beat down oil patch majors, though...
I was watching some tt videos today, and in one of them Tom said "when you see airlines stocks start to go down, and the oil is also down... that's the tell that oil is bottomed"... Hm...

Another fu....ng bear trap on NQ... just when I already seen a winner(s) there...
Gap filled, just another "V" reversal. Small positions - will be small lost, but I just looked at it and done nothing, expecting QQQ to make that move under $103.
OK, I suppose I have to lose sometimes... + .
Hope is dangerous in this game.
  • #6,188
  • Dec 9, 2014 1:22pm Dec 9, 2014 1:22pm
Quoting StrayDog
{quote} I was watching some tt videos today, and in one of them Tom said "when you see airlines stocks start to go down, and the oil is also down... that's the tell that oil is bottomed"... Hm...
Yeah, I have heard things like that b4. Airlines, like a lot of other big big users, do deals directly with the majors to lock in oil (distillates) supply months in advance, via b2b contracts outside the public markets, then maybe do some hedging in futues. The idea there is that the airlines will benefit massively from drop in oil price - but - the future price in oil that they are benefitting from is hidden in some unknown mix of swaps and futures, and if big traders think that mix has bottomed they will lay off airline stocks. But, as always, in the end, nobody knows what will happen. Saudis may double down then double down again on cutting prices while keeping supply static, until they see the over-leveraged N. American nouveau riche oil players start to go under, defaulting on their bonds, etc. Oil is a really complicated sumbitch & that's why there are oil traders, I think it's a fulltime job just to be able to wrap your brain around that trade....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,189
  • Dec 9, 2014 2:09pm Dec 9, 2014 2:09pm
Quoting The Fool
........ But, as always, in the end, nobody knows what will happen. Saudis may double down then double down again on cutting prices while keeping supply static, until they see the over-leveraged N. American nouveau riche oil players start to go under, defaulting on their bonds, etc. Oil is a really complicated sumbitch & that's why there are oil traders, I think it's a fulltime job just to be able to wrap your brain around that trade....
Yes it is... usually those pros trade Oil & Natural Gas only, nothing else...

This is another way of trying to catch some future up move...
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I wondered when a trade like this would appear on dough. The video Robyn is talking about is this, I watched it when it came out:

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Backwardated Laddered Puts
..... Today, Tom Sosnoff and Tony Battista are joined by Joe Kinahan from TD Ameritrade as they break this strategy down. Joe explains how you are able to move to lower strikes and out in time to collect a similar credit for each put. This allows you to continually reduce your basis in an underlying that you would like to be long!
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And it is a good one. I would like to use that in consolidation of bullish trend rather than trying to catch a falling knife, but that is the thing when one is under-capitalized (soon to change, I hope... if Dec would be good to me...). So, for continuation of the existing move, rather than trying to catch a reversal. For example, do it on FB, or some other strong stock.
Hope is dangerous in this game.
  • #6,190
  • Dec 9, 2014 2:14pm Dec 9, 2014 2:14pm
Quoting StrayDog
This is another way of trying to catch some future up move... I wondered when a trade like this would appear on dough. The video Robyn is talking about is this.
Interesting, thanks for that - that Robyn is sharp.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,191
  • Dec 9, 2014 2:33pm Dec 9, 2014 2:33pm
Quoting The Fool
LULU moving toward my calendar target $50, LULU ER's bmo 12/11, so I have until tomorrow to get closer ....
both my ORCL & LULU ER calendars are looking good, near $3 pop on LULU today very nice, if they will try to pin it on $50 tomorrow I will be feeling like a a genius, well....a lucky genius. I have several of those across accounts, same for ORCL....I am looking to do something similar across the PBR ER, supposedly out 12/12....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,192
  • Dec 9, 2014 3:00pm Dec 9, 2014 3:00pm
I couldn't pull trigger on this PBR Dec/Jan $8.5/$9 diagonal....it'll be there tomorrow
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,193
  • Dec 9, 2014 3:24pm Dec 9, 2014 3:24pm
Quoting The Fool
{quote} both my ORCL & LULU ER calendars are looking good, ....
I also have Dec2/Dec LULU $40 put calendars, which amazingly enough, are also in profit, thanks to about 15% increase in IVR since they were bought cheap for $0.10...will close those tomorrow early if LULU looks to continue up.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,194
  • Dec 9, 2014 8:30pm Dec 9, 2014 8:30pm
considerable period

http://finance.yahoo.com/news/fed-ma...155142667.html

http://l1.yimg.com/bt/api/res/1.2/SM...0_original.jpg
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,195
  • Edited 10:05pm Dec 9, 2014 9:52pm | Edited 10:05pm
I did this deep itm calendar in EEM (on 11/03) thinking we would get on the rate raise track after the Dec FOMC - remains to be seen.

Paid $0.12 for the calendar, wisht I had done $39 not $37. Even so, if EEM will drop below $39 in Dec/Jan I will make money...can only lose $120....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,196
  • Dec 9, 2014 10:04pm Dec 9, 2014 10:04pm
Quoting The Fool
considerable period
There's not another FOMC w/ press conference until March 20. Too long. I say we get something. The bots will take a nanosecond to scan the press release and when they don't find "considerable", tshtf.

http://www.federalreserve.gov/moneta...ccalendars.htm
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,197
  • Dec 9, 2014 11:41pm Dec 9, 2014 11:41pm
calendars are better than debit spreads for low vol contrarian plays

https://www.tastytrade.com/tt/shows/...4?locale=en-US
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,198
  • Dec 10, 2014 8:42am Dec 10, 2014 8:42am
Quoting The Fool
calendars are better than debit spreads for low vol contrarian plays https://www.tastytrade.com/tt/shows/...4?locale=en-US

Thanks TF, I didn't watched that one - don't have the link in my bookmarks...
Here is one with similar stuff, I think I posted link before, but I am not sure:

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Hope is dangerous in this game.
  • #6,199
  • Edited 11:45am Dec 10, 2014 11:35am | Edited 11:45am
Few retailers have high IVR now, like:
WMT --> 63
BBY --> 56
TGT --> 53

I suppose that has to do with CONN another enormous gap down on ER's, among other things. That stock is 40% down... (3 times massive gap down out of last 4 ER's...)

Looking to maybe do a 1 SD short strangle on BBY - which is trading around $36.70 now - that would be 31/43 Jan, now trading at midpoint for about $0.73 credit. Margin req on Reg-T IB account is about $430.
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Add-on
I did that for $0.74 credit.

Also interested in something for LULU and ADBE ER's, don't have a clear idea right now.
Hope is dangerous in this game.
  • #6,200
  • Dec 10, 2014 12:11pm Dec 10, 2014 12:11pm
Comparison...

TWTR and BBY are now trading at the same price, m/l about $36.80, which means that 1 SD is about the same... on both stocks that would be 31/43(44) strangle...

But, credit on TWTR with IVR 22 is $0.84 and on BBY with IVR 56 is $0.74.

Growth stocks simply pay better. Higher risk, but better payout. Imagine TWTR with IVR 56...

That is why I watch Nasdaq stocks IVR - when it jumps over 50, or even better, over 60... sell something on them.
TT crew did a video about that, also (Premium | Growth and Yield) - growth vs. yield stocks and option premiums.
Hope is dangerous in this game.
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