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Let's Trade Options

  • #6,321
  • Dec 16, 2014 2:30pm Dec 16, 2014 2:30pm
From one of recent tt videos...


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Hope is dangerous in this game.
  • #6,322
  • Dec 16, 2014 2:36pm Dec 16, 2014 2:36pm
Quoting The Fool
watching SnP slump into the close, maybe get a little more SPY bull call vertical action cheaper
holding out for sub-mid, mmbitchz not feeling me, no prob, be there tomorrow....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,323
  • Dec 16, 2014 2:39pm Dec 16, 2014 2:39pm
Quoting StrayDog
From one of recent tt videos...
yah I saw that yestitty, noted the iv drop, expected. But this is certainly the most ominous FOMC of our lives, of all time even, a meeting of titans that will determine the course of history blah blah etc same as the last one & 1 b4 that yaawwwwwwn...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,324
  • Dec 16, 2014 2:55pm Dec 16, 2014 2:55pm
Quoting The Fool
{quote} yah I saw that yestitty, noted the iv drop, expected. But this is certainly the most ominous FOMC of our lives, of all time even, a meeting of titans that will determine the course of history blah blah etc same as the last one & 1 b4 that yaawwwwwwn...
I'm kinda of looking for a strong move down in Gold on this FOMC announcement, metals imo will follow the oil drop eventually, have the russians enough money to buy a substantial amount of gold?
  • #6,325
  • Dec 16, 2014 3:08pm Dec 16, 2014 3:08pm
Quoting Cecil Gee
{quote} I'm kinda of looking for a strong move down in Gold on this FOMC announcement, metals imo will follow the oil drop eventually, have the russians enough money to buy a substantial amount of gold?
I dunno bout that, CG. I just need gold to move up or down $20 or so, or maybe sit still....until tomorrow.

See ya'll then, ciao.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,326
  • Edited 8:26pm Dec 16, 2014 8:12pm | Edited 8:26pm
Coming back to this CG, was heading out the door before...

Quoting Cecil Gee
{quote} I'm kinda of looking for a strong move down in Gold on this FOMC announcement, metals imo will follow the oil drop eventually, have the russians enough money to buy a substantial amount of gold?
http://www.bloomberg.com/news/2014-1...tml?cmpid=yhoo

“Gold may come under further pressure because of Russia,” ---- “Oil prices are not on their side, so now the next option they have for raising cash is selling gold. There is some talk that the country has either started selling or is making arrangements to sell their gold.”

$6 risked can make $55 if gold will drop back down to 2014 lows...(GLD $109.xx) - that's a Jan/Jan4 bear put diag, $109/$108.5 for $0.06 debit
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,327
  • Dec 16, 2014 9:04pm Dec 16, 2014 9:04pm
Quoting StrayDog
OK, I am in for $0.14... I covered both sides, lets see what will happen with this short term experiment.
Your $197/$196.5 already a little in profit, if SPY will slide another buck early tomorrow I guess, if it were me, I might be thinking of closing pre-announcement. Whaddaya think?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,328
  • Dec 16, 2014 11:59pm Dec 16, 2014 11:59pm
Speaking of ditm options, somebody did this spread on RIG today (x221). Anybody can splain it to me please feel free.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,329
  • Dec 17, 2014 12:17am Dec 17, 2014 12:17am
http://www.thestreet.com/story/12987...o&cm_ven=YAHOO

I'm looking at RIG bull spreads, the Jan 16/Jan 17 $42/$40 costs $0.30, $200 margin/contract, $0.30 risk pays >$5.50 if you get lucky, big profit range of $16.50-$56.00 at expiry.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,330
  • Dec 17, 2014 12:35am Dec 17, 2014 12:35am
don't like the wait or the long margin? the Feb/May $28 RIG calendar gets on for $0.21 debit (knock on wood) and could pay $2.53 if you hit $28 at Feb expiry, nice safe range $17.50 - $39.50 at expiry. Due diligence, RIG IVR sky high, will come down someday. RIG ER Feb4 week - after Feb opex. I might have to tag along with Carl...(if you wanted to double down bull RIG, the Jan $15/$14 bull put spread credits $0.21)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,331
  • Edited 1:51am Dec 17, 2014 1:41am | Edited 1:51am
idk if you can really get filled for $0.05 on this May RSX vertical, but that is what ToS shows as a mid ($0.20 high) - lots of action - $0.05 risked pays $0.95 if RSX gets back to where it was just a couple weeks ago in 6 months. Seriously? Buy 100+: no guts, no glory....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,332
  • Dec 17, 2014 7:46am Dec 17, 2014 7:46am
Quoting The Fool
http://www.thestreet.com/story/12987...o&cm_ven=YAHOO I'm looking at RIG bull spreads, the Jan 16/Jan 17 $42/$40 costs $0.30, $200 margin/contract, $0.30 risk pays >$5.50 if you get lucky, big profit range of $16.50-$56.00 at expiry. {image} {image}
So you can sell that front month option multiple times... In conditions like this, when IVR is pinned at 100, it is pure directional bet, you can't profit from possible IV rise, since diagonals and calendars are declared as a low IV strategies ?
Hope is dangerous in this game.
  • #6,333
  • Dec 17, 2014 7:50am Dec 17, 2014 7:50am
Why the Fed will do nothing: Dennis Gartman

Full punchbowl then, eh? It's ain't over until the fat lady sings...
Hope is dangerous in this game.
  • #6,334
  • Dec 17, 2014 8:59am Dec 17, 2014 8:59am
Quoting StrayDog
Not the most efficient trade, looking at credit / margin req.... But, if you want to play something for ER's, here it is. {image}
ER's plays - WHAT NOT TO DO when you want to sell premium
About that FDX idea. I was thinking about it and concluded later, that what ever happens, that idea suck.
That was Dec 167.50 / 187.50 short strangle for $0.90 - $0.98 credit. FDX breached EM to the downside. But that is not what is important right now, but the thing is about ROC, and about efficient trading, choosing your trades.

If you can't get enough credit for 1 SD short strangle - don't do it! Plain and simple. You could make money on it, but it is still a bad idea, and here is it why: About $1.00 you can get for 1SD strangle on $40 stock. AND the margin requirements for $177 stock - not small. Currently you can get like $0.90 credit on BBY, $36 stock that don't have ER's, and margin req is 4x+ lower. Or TWTR. So, if you want to play ER's with selling premium - it is a binary event - options must be expensive for that. If they are not - don't do it. Do not take risk for peanuts. I will avoid such stocks, that have usually small moves, which then means that options are cheap... You can do naked straddle, or Iron Fly, to collect meaningful credit, but I would do that only on cheaper stocks, like AA or BAC... And you can get burned there also, like me on KO, 'cos even those ones have outlier moves sometimes...

Pick your battles, especially if your account is small.
(I think "small" is everything under $25,000 for starters, and "nice" is everything for portfolio margin account).
Hope is dangerous in this game.
  • #6,335
  • Edited 11:18am Dec 17, 2014 10:54am | Edited 11:18am
Quoting The Fool
idk if you can really get filled for $0.05 on this May RSX vertical, but that is what ToS shows as a mid ($0.20 high) - lots of action - $0.05 risked pays $0.95 if RSX gets back to where it was just a couple weeks ago in 6 months. Seriously? Buy 100+: no guts, no glory.... {image} {image}
trying to get filled on RSX May bull call 20/21 vertical for $0.10

tick tock....Final Jeopardy theme music...plays forever in Hell....

I am also trying to close out the ORCL ER calendar I have, its Dec/Dec4 $42 calls....even tho ORCL is sitting near $40, calendar has gained on iv rush and I am trying to get out with a $0.07 net
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,336
  • Dec 17, 2014 11:16am Dec 17, 2014 11:16am
Quoting The Fool
{quote} trying to get filled on RSX May bull call 20/21 vertical for $0.10
You pundit!

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I just watched tt video >> Pundits << ... I like what they did with Robert Schiller and Jim Cramer...

But no joking now - as we previously noted: If you want to gamble, do it cheap, man...
Hope is dangerous in this game.
  • #6,337
  • Dec 17, 2014 11:27am Dec 17, 2014 11:27am
Quoting StrayDog
as we previously noted: If you want to gamble, do it cheap, man...
That RSX May $20/$21 for $0.05 was an incredible deal. same for $0.10 is a good deal. Not getting filled though...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,338
  • Dec 17, 2014 11:46am Dec 17, 2014 11:46am
ORCL... ER's today AH. Another stock with cheap options. Currently trading around $41... Not enough credit for short strangle.
Not even now, with IVR 100 and high VIX. If you don't have a bias, and want to sell premium, what could you do?

You could sell a straddle as unlimited risk strategy, OR do an Iron Fly. Protective wings - if you pull them closer, in order to get a better credit and risk/reward - that would shrink profit area, so don't do it. You can't get protection for free.

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Both strategies - short straddle AND Iron Fly, as a defined risk version, will make money ONLY if u/l stays in E.M (Lower POP), while wide strangles (High POP) on stocks that have juicy options, will make money even if the bitchez breach estimated move.
Hope is dangerous in this game.
  • #6,339
  • Dec 17, 2014 11:46am Dec 17, 2014 11:46am
Quoting The Fool
{quote} That RSX May $20/$21 for $0.05 was an incredible deal. same for $0.10 is a good deal. Not getting filled though...
Have about 10 open orders and nothing getting filled at the mid....odd....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,340
  • Edited 12:23pm Dec 17, 2014 11:56am | Edited 12:23pm
Quoting The Fool
trying to close out the ORCL ER calendar I have, its Dec/Dec4 $42 calls....even tho ORCL is sitting near $40, calendar has gained on iv rush and I am trying to get out with a $0.07 net
Got out for $0.06 - bought for $0.05, sold for $0.11 - I would have held a little longer but ORCL sp off $1 from the calendar strike, 100% gainer, can't complain - if I knew I could do 100% gainers @ $0.05 wins I'd be doing them all day
"If The Fool persists in his Folly he will become wise." - William Blake
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