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Let's Trade Options

  • #6,361
  • Edited Dec 19, 2014 1:25am Dec 18, 2014 8:47pm | Edited Dec 19, 2014 1:25am
Quoting The Fool
I still have a VXX Dec 28/27.5 put spread that I left open just in case we got the dovish Fed - if VXX can do another $3 drop by Friday I will recoup much of my loss there.
This spread almost a complete loss now. I was surprised to see VXX close higher than it opened today, even though ^VIX dropped 2.63. Nevertheless, if I can get another $2-$3 drop in VXX tomorrow, I might b/e or make a little on the spread.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,362
  • Dec 19, 2014 8:28am Dec 19, 2014 8:28am
Quoting The Fool
{quote} well, shoulda coulda waited, not sure how much the max was on that spread, more though, prolly pay the max Fri morning. but we were not far off the max, I bet. SPY was looking a little shaky when I decided to close + I knew I was going to be screentime limited. Dammit.
$0.47 and $0.48 are excellent closing prices. I wouldn't leave them to expire, because of SPY div date anyway.

So far, nice relief rally. SPY $206.50... man...

VIX is going to the basement again. Too bad that volatility products like UVXY and SVXY have such lousy options. XIV doesn't have options. VIX itself has options with $0.05 increments, and mm often wide the bid/ask spreads... but, it is doable. VXX is the only one with really good options.

I was thinking of some cheap bullish spread on VIX itself, like 19/20 for no more than $0.15... Just thinking what could lift volatility until Jan expiry... we will have holidays, etc... Rally would end but market will probably just go sideways... ???
Hope is dangerous in this game.
  • #6,363
  • Edited 9:12am Dec 19, 2014 8:31am | Edited 9:12am
BBRY took a nosedive... minus 10%. I wonder if there could be some opportunity...
Very big miss on revenue.

Add-on
I just bought a few of Dec 9 puts for $0.04, when stock made a pullback to $9.40-ish... shorting the pullback, expecting it to go close to or under $9 again.
I should wait couple of minutes for vol contraction, though... eh, rookie me.

Add-on 2
Well, this looks like a complete loss. Only "positive" is small size.
Hope is dangerous in this game.
  • #6,364
  • Dec 19, 2014 11:32am Dec 19, 2014 11:32am
Quoting The Fool
Gold not doin shit overnight so far, thought I might get a little movement under the downside diagonal peak, still might, need sp to move off the middle dip, but whatever, tired of looking at it, need the margin back, will likely cash it in tomorrow. Looks like $325 might be the best I can do, saw that today anyway. Ideal is I could wait til Friday and see sp get right in the sweet spot and maybe net >$500, that'd be epic, $500 for a trade that cost $0 to put on. But with my luck, I'd wait an extra day and gold would make a monster move and I might...
haha, fml. Gold no help for my GLD DD. did exactly the worst thing for the trade and sat in the middle of the P/L dip. I will be lucky to get out with $90 profit. Saw +$325 before the FOMC and gold was not much off where it is now. Shoulda closed, got greedy, now singin the blues. Greed is good, but not wise. Live & learn.

The same trade is available for Jan/Jan4, basically a bet that GLD will range between $109 - $120. Put it on for near nothing and ride it out....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,365
  • Dec 19, 2014 11:50am Dec 19, 2014 11:50am
Quoting The Fool
.... Shoulda closed, got greedy, now singin the blues. Greed is good, but not wise. Live & learn. The same trade is available for Jan/Jan4, basically a bet that GLD will range between $109 - $120. Put it on for near nothing and ride it out....
Hey TF...
You have 10 of those, I have learned in my previous trading which could be applied to any trading, that partially closing is often than not a good thing. I used to close my stock positions like that all the time. Like closing 3+3+4... I personally have a difficult time when I have only 1 spread - limited possibilities than.

About GLD - I like the idea, because I also don't see any big moves on it. It will probably range.
Hope is dangerous in this game.
  • #6,366
  • Dec 19, 2014 11:59am Dec 19, 2014 11:59am
Quoting StrayDog
About GLD - I like the idea, because I also don't see any big moves on it. It will probably range.
Well the lesson for the DD's is, if you get a ranging PA and sp is sitting near the middle of the trade range, you'll be better off closing about 3-7 trading days before expiry.

My gut on gold is it's gonna drop. I already have some GLD Jan $110/$109.5 vert bear put spreads, might be enough gold action for me. Closed the Dec/Dec4 DD for $85 net, sad....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,367
  • Dec 19, 2014 12:05pm Dec 19, 2014 12:05pm
Off topic

There is a very short Serbian folk tale... very often it reminds me of trading - i.e. closing positions. Trader is in position to constantly regrets something - closing a loser - why I didn't closed the mofo early, or why I entered it in the first place. Closing a winner - ah, I could close for more... I am sure every single trader was in those kind of situations.

Here is the tale:
(Google Translate just sucks horribly... so I will translate it as best as I can)

Dark Cave
One tzar, marching with the army at the end of the world, went into the dark cave, where you can't see anything. ...... When they entered the cave they felt small stones under their feet, and from the darkness a loud voice cried out: "If you take the stones you will regret it, and if you don't take the stones, you will regret it!" Some thought - "If I am going to regret it, why should I take them?" And some was thinking - "I will take at least one." When they returned from the darkness of the cave, and looked at those stones - it was all gemstones. Then those who didn't took them regret it, and those who did took them, regret for not taking more.
Hope is dangerous in this game.
  • #6,368
  • Dec 19, 2014 12:10pm Dec 19, 2014 12:10pm
Quoting StrayDog
Well, this looks like a complete loss. Only "positive" is small size.
BBRY... Yup, there is a loser, what a stupid trade that was.

A complete reversal on BBRY. From $10 to $9... now back from $9 to $10... .
Ah, that mofo bull market. I occasionally try to scalp with weeklies, but overall, I am positive just because I did first trades that was winners with more lots (more than I should)... I am just a lousy scalper.
Hope is dangerous in this game.
  • #6,369
  • Dec 19, 2014 12:29pm Dec 19, 2014 12:29pm
Quoting StrayDog
Then those who didn't took them regret it, and those who did took them, regret for not taking more.
Good one. I'm generally an optimistic person. When I do a stupid thing in a trade I look that over and try to learn from it, same for when I do something well. Then just water under the bridge, always new trades waiting around the bend. I like trading options because I have time to mull things over. Having time, I often talk myself out of making stupid moves. Of course, I still do stupid things all the time. Shorting VIX pre-FOMC was just dumb. Trade was a total loss. But it was only $100. I did some things well this week: SPY bull call spreads were a good idea, bear put spreads a good idea, too, but closing them early with small loss was a good move.

I made money on the week, made money on the Nov/Dec cycle. Nothing earth-shaking but good enough. Looking forward to new fishing. Watching for general IVR drops across those late Jan ER names so I can maybe get in on the iv ramp-up for those. Deep market dip in early Dec messed that cycle play up.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,370
  • Dec 19, 2014 12:38pm Dec 19, 2014 12:38pm
Quoting The Fool
{quote} Good one. I'm generally an optimistic person. When I do a stupid thing in a trade I look that over and try to learn from it, same for when I do something well. Then just water under the bridge, always new trades waiting around the bend. I like trading options because I have time to mull things over. Having time, I often talk myself out of making stupid moves. Of course, I still do stupid things all the time. Shorting VIX pre-FOMC was just dumb. Trade was a total loss. But it was only $100. I did some things...
That's the spirit my friend.
I regret that I am so far away from you, otherwise I would invite to coffee. I find that you have a very good understanding of various markets, i.e. stocks, commodities, currencies... I will try to bring more good ideas to the table.

We constantly learn from our mistakes. I made money also on Nov/Dec, because Nov was very good and Dec is about b/e so far.

About this thread - many many good stuff here. We just need more active people.
So, people - yes YOU! You that reads this - if you have anything to say about equity or futures option trading - please do!
Hope is dangerous in this game.
  • #6,371
  • Dec 19, 2014 1:03pm Dec 19, 2014 1:03pm
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
I did this TBT bull spread for $0.13 debit, trying to close it for $0.12 credit, a $10 loss. TBT a bet against the long bond. Long bond itself a bet against inflation. So, the TBT long was a bet on a hawkish Fed. Long bonds will likely not go down until the Fed announces QE4. Or until we get some actual, real inflation. Idk, I might bet on QE4 before I'd bet on the latter.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,372
  • Edited 1:40pm Dec 19, 2014 1:23pm | Edited 1:40pm
Quoting StrayDog
About this thread - many many good stuff here. We just need more active people. So, people - yes YOU! You that reads this - if you have anything to say about equity or futures option trading - please do!
Thanks, bud. Yep it would be good to have a few more active options traders checking in. Some of the good ones who have come and gone probably were not impressed with the level of skill that was shown early on. Then, lots of traders don't get into foruming. I have been thinking about trying to form a meetup group for options traders in Seattle. There's an active one in Portland that has a focus only on options selling. I know that there are a lot of traders who are just selling options, and they are really just selling 1-3 futures contracts or perhaps SPY, QQQ, etc. They are basically just doing the same trades over and over. Nothing wrong with that, maybe just not real interesting to talk about.

Anyway, I appreciate your contributions so keep posting.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,373
  • Dec 19, 2014 1:24pm Dec 19, 2014 1:24pm
Quoting The Fool
{quote} I did this TBT bull spread for $0.13 debit, trying to close it for $0.12 credit, a $10 loss.
Filled, a good trade. When you're wrong, fck it, forget about it.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,374
  • Dec 19, 2014 1:42pm Dec 19, 2014 1:42pm
From http://dannathan.tumblr.com/

4. USO - despite crude stabilizing without registering large gains, there appeared to be either some monetizing of hedges or closing bearish bets in the etf that tracks the price of WTI oil The two most active strikes were the Jan 20 puts and the March 21 puts with 21,000 and 15,000 trading respectively much of the action looked like closing selling. There were two trades that caught my eye, not because of the premium commitment, but because of the choice of strikes. When the etf was $20.95 there was a buyer of 5300 of the Jan15 $12 puts for .05 and 6300 of the Jan15 $11 puts for .05. These options have less than a 1% chance of being in the money in a month, but a trader spent $58,000 in premium for the potential that they could.

Hm... I am thinking that this trades are buying cheap protection on naked puts entered previously AND reducing margin requirement, thus forming a very wide bullish put spreads (synthetic naked puts). Otherwise, paying for anything that has a 1% chance being ITM as a standalone trade doesn't make any sense.
Hope is dangerous in this game.
  • #6,375
  • Dec 19, 2014 1:57pm Dec 19, 2014 1:57pm
Quoting StrayDog
Hm... I am thinking that this trades are buying cheap protection on naked puts entered previously AND reducing margin requirement, thus forming a very wide bullish put spreads (synthetic naked puts). Otherwise, paying for anything that has a 1% chance being ITM as a standalone trade doesn't make any sense.
I have no idea what oil is going to do. I just don't think it will be going back up much above $65 anytime soon. On the downside, who knows? Maybe <$50....it will come down to what the Saudis/OPEC might do.

I look through the time/sales data all the time and I am often confused by the large trades I see there, but those options trades are part of trading scenarios involving the ul stocks also, which is hidden information...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,376
  • Dec 19, 2014 2:16pm Dec 19, 2014 2:16pm
If it wasn't Christmas week coming up I would be looking to buy put spreads on SPY as to me the S/P is showing weakness, could be the low volume but I'd be looking for the index to trade close to 2000 again by the year end, looking around for cheap options
  • #6,377
  • Dec 19, 2014 8:57pm Dec 19, 2014 8:57pm
Quoting Cecil Gee
If it wasn't Christmas week coming up I would be looking to buy put spreads on SPY as to me the S/P is showing weakness, could be the low volume but I'd be looking for the index to trade close to 2000 again by the year end, looking around for cheap options
don't think I could make that call, waiting to see if the little bounce in oil has any legs. Will be watching CPI and other econ data for inflation signs - as usual, the Fed calls the tune, gonna be business as usual with them until something ticks up there.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,378
  • Edited Dec 20, 2014 12:11am Dec 19, 2014 11:00pm | Edited Dec 20, 2014 12:11am
natgas getting crushed. Not much of a winter has showed up yet in the US, temperature-wise, anyway. That can/will change, but maybe not enough to propel UNG back to levels I need - @ $21 or higher. I have a Jan/Apr $23 call calendar, w/ $0.27 credit on the Jan, already dropped to $0.10. Anything below that and I will buy it back and look to sell it again on a potential rise in natgas in the next weeks.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,379
  • Dec 20, 2014 12:40am Dec 20, 2014 12:40am
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,380
  • Dec 20, 2014 12:45am Dec 20, 2014 12:45am
$4 risked pays $45, just need that Jan cold snap.
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"If The Fool persists in his Folly he will become wise." - William Blake
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