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Let's Trade Options

  • #6,281
  • Dec 15, 2014 10:00am Dec 15, 2014 10:00am
Maybe it is time to do skewed Iron Condor on indices, SPY or QQQ. With more room to the downside. Normal skew on these options, i.e. equidistant puts being more expensive than calls, is to be expected.

Waiting to get feed on dough...
Hope is dangerous in this game.
  • #6,282
  • Edited 10:47am Dec 15, 2014 10:09am | Edited 10:47am
Hahahahahaah....
what a funny tt video... under 3 minutes, I am still laughing... click --- HERE ---


Quoting StrayDog
..... Maybe I should just closed that AAPL strangle today, when it was at b/e.
Well that would save some nerves, I wish I closed it... If AAPL continues to drop, I will roll down calls.


Add-on
That is Jan 102.14 / 124.29 short strangle... (I sold it for $1.33, had b/e today what a moron I didn't closed it, didn't expected such a panic in market).
I shorted another call, this time Jan 120.71, for $0.60 credit...
Hope is dangerous in this game.
  • #6,283
  • Dec 15, 2014 11:42am Dec 15, 2014 11:42am
Quoting The Fool
{quote} trying to fill a Jan TBT bull call vertical, $50/$51 for $0.13, no luck yet, wouldn't want to pay more, tough to gamble against long bonds
filled as TBT fell back. I have usually lost money betting against USTs, maybe the Fed will help me out this time. If not, I will have until janex to adjust. Mostly treading water now, made money on EEM bear calendars, lost money on VXX bear spreads, lost money last week on AAPL bull spread. Doing better than break even, though. The GLD DD I am in is looking good for nice gains on Wed. ORCL looks like a crap shoot....

re: TBT, $13 risked pays above $80 if TBT gets to $52+ in mid-Jan....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_0TBT.png Size: 44 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,284
  • Dec 15, 2014 11:58am Dec 15, 2014 11:58am
Quoting The Fool
.... The GLD DD I am in is looking good for nice gains on Wed. ORCL looks like a crap shoot.... re: TBT, $13 risked pays above $80 if TBT gets to $52+ in mid-Jan.... {image}
Good one on GLD. I have never traded TLT / TBT and similar stuff.

Looking to maybe do some ER's trades this week, ORCL included. There is also FDX, NKE, BBRY, and some other (you mentioned RHT)
Hope is dangerous in this game.
  • #6,285
  • Dec 15, 2014 12:12pm Dec 15, 2014 12:12pm
Yes, let us know what you think of the ER's for the week. Last chance to get those in really until next year...WAG next week also. I like to get in those early in the IVR ramp-up, I think those have the best chance of making money, but there's many ways to skin a cat.

Probably anything I do for this week will be an attempt to catch some FOMC fireworks, if there be any. have not been able to talk myself into a coherent bias re: FOMC dove or hawk, "considerable time" stay or go, etc, so....another crap shoot.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,286
  • Dec 15, 2014 12:27pm Dec 15, 2014 12:27pm
Quoting The Fool
Yes, let us know what you think of the ER's for the week. ....
No problemo. This is on schedule (the short list):

Attached Image


I will look at option chains and historical movements as always...
Hope is dangerous in this game.
  • #6,287
  • Dec 15, 2014 12:41pm Dec 15, 2014 12:41pm
Quoting StrayDog
Good one on GLD.
GLD DD currently worth about $165; even if GLD sp feezes, it will be worth >$250 by Wed morning. You have to hold these DD's (calendars, etc) until near expiry to get the profit balloon. I will close Wed morning, in fear of the Fed...

GLD DD cost nothing to put on, but has tied up $100/contract margin...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_gld.png Size: 39 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,288
  • Dec 15, 2014 12:55pm Dec 15, 2014 12:55pm
Quoting The Fool
{quote} GLD DD currently worth about $165; even if GLD sp feezes, it will be worth >$250 by Wed morning. You have to hold these DD's (calendars, etc) until near expiry to get the profit balloon. I will close Wed morning, in fear of the Fed... GLD DD cost nothing to put on, but has tied up $100/contract margin... {image}
Yes... I am lacking the patience for that, but I will join you in such trades next year with bigger account, to support margin req for more trades at the same time.


I was looking at GOOGL for some time, for bearish call spreads, but bid/ask there suck... bigger than AMZN.
I was looking at this one last week, this is just an example of current bid/ask, and those widen off course when VIX go crazy.
Attached Image (click to enlarge)
Click to Enlarge Name: GOOGL-bid-ask.png Size: 4 KB


GOOGL still looks bearish to me, so I would go closer, maybe like this:
Attached Image (click to enlarge)
Click to Enlarge Name: GOOGL.png Size: 76 KB
Hope is dangerous in this game.
  • #6,289
  • Dec 15, 2014 1:16pm Dec 15, 2014 1:16pm
Quoting StrayDog
Yes... I am lacking the patience for that,
you need to hold to near expiry but you can do them on short term trades. Here's a Dec/Dec4 $205/$205.5 call diag I am trying to get filled on for 0.05 - just in case we get a dovish Fed and the S&P jets back up by the end of the week....upside b/e is at $207.50, max P is near 10x the risk. As usual, P/L analysis needs grain of salt - iv will fall post FOMC, but still could pay well...
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_spy.png Size: 37 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,290
  • Dec 15, 2014 1:28pm Dec 15, 2014 1:28pm
Hey TF... Yes, I can practice with shorter term trades...

Like SPY Dec 203/203.50 Bull Call Spread... Could get filled for $0.10, also a variation on betting on milk & cookies from JY.
I wasn't fast enough to place that, for $0.10 debit... (slow all day, just one mistake after another )
Hope is dangerous in this game.
  • #6,291
  • Dec 15, 2014 1:41pm Dec 15, 2014 1:41pm
Here's that vertical - I only see $0.15 now at best, but that could do better if SPY slides into the close. I like verticals for the defined risk on both ends, the easy margin - but you need to get a good hard move to get all they're worth out of them, total directional gamble, nothing wrong with that, just get in cheap in case you are wrong....
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_spy2.png Size: 35 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,292
  • Dec 15, 2014 1:47pm Dec 15, 2014 1:47pm
Quoting The Fool
Here's that vertical - I only see $0.15 now at best, but that could do better if SPY slides into the close. I like verticals for the defined risk on both ends, the easy margin - but you need to get a good hard move to get all they're worth out of them, total directional gamble, nothing wrong with that, just get in cheap in case you are wrong.... {image}
Yes I know, it traded for $0.08 / $0.12 bid/ask, when SPY was bellow $199, but I was late...
Yeah, total directional gamble, that is why I rarely trade those, as you said - if you want to gamble, get in cheap... Basically it is a bet that BTFD-pers will move the SPY +2% by the end of the week, IF the mofo "considerable time" expression comes again. Lots of "ifs" there
Hope is dangerous in this game.
  • #6,293
  • Dec 15, 2014 1:57pm Dec 15, 2014 1:57pm
gold really dropping, but good thing about the diagonals, I have this huge safe range, just need to hang in til Wed. I like diagonals better than verticals. Have lost money, made money with both, diagonals take more skill/attention to manage, I'd say, but are more flexible...idk, ask me in a few days I may change my mind...
Attached Image
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,294
  • Dec 15, 2014 2:30pm Dec 15, 2014 2:30pm
Quoting The Fool
gold really dropping, but good thing about the diagonals, I have this huge safe range, just need to hang in til Wed. I like diagonals better than verticals. Have lost money, made money with both, diagonals take more skill/attention to manage, I'd say, but are more flexible...idk, ask me in a few days I may change my mind... {image}
They also have that cat-looking shape

Attached Image


Just kidding... killing time.
Hope is dangerous in this game.
  • #6,295
  • Dec 15, 2014 2:54pm Dec 15, 2014 2:54pm
Quoting StrayDog
They also have that cat-looking shape Just kidding... killing time.
I know, tres chic. Did you know that if you were born in many Central American tribes, back in olden times, they would strap a rock to your forehead so when your skull grew, it would be sloped back, so as to make you look more like a jaguar, which they considered the pinnacle of beauty? And you thought you had it rough growing up...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,296
  • Dec 15, 2014 3:10pm Dec 15, 2014 3:10pm
didn't get filled on many gamble trades, try again tomorrow. I don't care much, I wanted to have some small gambles on pre-FOMC, will be content to wait until the aftermath to trade larger...

Later....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,297
  • Edited Dec 16, 2014 12:44am Dec 15, 2014 11:57pm | Edited Dec 16, 2014 12:44am
Plugging in before bedtime to see what I might trade tomorrow, thinking about ER trades, but FOMC such a big gorilla this week, might overshadow any ER effect. Slim pickins anyway....RHT a dog w/ no weeklies; wide strikes, FDX - wide strikes; NKE might be worth looking at...trading at $95.43, seems to do $4-5 pops on ER's, gets an iv crush in the low end of 5-10% range. Nike ER's ah on 12/18, so you might wait til after the FOMC show to get in, might do a calendar, $100/$99 call Dec/Dec4 diag for $13 credit...you might get out of that w/ nice $30-$35 gain pre-ER if NKE runs up to $96.30 or so...b/e upside out to almost $102...poor bid/ask spreads on NKE though.
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_nke.png Size: 59 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,298
  • Dec 16, 2014 1:16am Dec 16, 2014 1:16am
Can we get another $100 drop in the SnP by Jan expiry? Its been 85 down in the last 6 trading days, so sure, all that and more....iv skew pronounced in the puts...$11 risked can pay $88 in the bear put vertical below.
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_spy1.png Size: 53 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,299
  • Dec 16, 2014 1:26am Dec 16, 2014 1:26am
similar setup for an upside move, similar risk/reward, but calls are cheaper
Attached Image (click to enlarge)
Click to Enlarge Name: 2014-12-15_spy2.png Size: 59 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,300
  • Dec 16, 2014 1:51am Dec 16, 2014 1:51am
Quoting StrayDog
Hey TF! About that deep ITM bullish put spread... I find that your OTM debit spreads like the ones that are just $0.50 wide is something that is easier to be done, and time correctly.... Just show me the money . Just so many stuff, it blows ones mind, really.
To be honest, SDog, I can't fully testify on the ditm spreads yet, as I am still learning about them. I note the tastytrade folks don't have anything to say about them, but when I look thru the Time/Sales, I see ditm options plays of various kinds commonly and at quite large size. And I just showed with the EEM calendar what can be done. I had 40 of those total and closed em all for almost $0.30 net, bought all at $0.12, made me feel nice to get that done on a Monday.

So as poor traders we tend to look at the cheap options - at least I know I have. I never even paid attention to the itm options much - too expensive! But if you're spreading, it doesn't matter, you're just looking for the best price spread. And you can often find that in the ditm's. You just have to be careful you're not getting into something you can't get out of, but if you use them in very liquid names and your directional call is good, it's just like any other trade - buy low, sell high.

I am in several long-dated UNG spreads right now using ditm's, I'll show what happens to them here. The recent development for me, after all, is just that I now look at the entire chain to see if I can find something I can use...

Right, on the otm debit spreads, like the two SPY spreads I show above - that's really bread and butter. I want to be in those constantly and, as long as I get in cheap and I'm mostly on the right track directionally, I expect winners to overpay losers. Love the null margin effect and the defined risk but still r/r potential can be high. If we get a market that moves, which has finally come about these last couple months.
"If The Fool persists in his Folly he will become wise." - William Blake
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