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Let's Trade Options

  • #6,381
  • Dec 20, 2014 3:51am Dec 20, 2014 3:51am
IWM not been able to break above $120 on several attempts in 2014, looks like it is getting ready to try again. Cheap dd idea pays better if it falls back...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,382
  • Dec 20, 2014 4:13am Dec 20, 2014 4:13am
AAPL looks weak and maybe wants to fall back below its 100dma. The Jan1 109/108 vert put spread gets about 4x net on a big move ...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,383
  • Dec 20, 2014 10:08am Dec 20, 2014 10:08am
good news for SPWR and FSLR....

http://www.fool.com/investing/genera...facturers.aspx
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,384
  • Dec 21, 2014 7:22pm Dec 21, 2014 7:22pm
natgas still getting beat down, wti futures up, looking for UNG to run below $17 in the short week ahead.....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,385
  • Dec 21, 2014 7:30pm Dec 21, 2014 7:30pm
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,386
  • Dec 22, 2014 3:10am Dec 22, 2014 3:10am
/ES up 6-7 early, thin volume Xmas week I'd bet we see an approach to SnP 2,100. ^VIX will dump, IVR slide across the board, and I will be looking to get in some cheap ER setup calendars, cheap contrarian debit spreads - perhaps.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,387
  • Dec 22, 2014 8:51am Dec 22, 2014 8:51am
Quoting The Fool
{quote} 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...
Yes you are right... covered puts, covered calls, complex trades... these firms has hundreds of traders.

Anyways, I was busy during weekend, and didn't posted this interesting article from Saturday:

Gas stations the best way to play weak oil prices, some analysts say • 10:20 AM
Carl Surran, SA News Editor

  1. With crude oil prices near five-year lows, some analysts say gas stations may be the best way to play the energy sector right now, with CST Brands (NYSE:CST), Murphy USA (NYSE:MUSA) and Marathon Petroleum (NYSE:MPC) as pure plays worth watching.
  2. Gasoline retailers enjoy their largest profit margins in falling price environments such as today, says Again Capital's John Kilduff.
  3. The gas station trend is clearly seen with refinery Valero's (NYSE:VLO) 2013 spinoff of its retail CST Brands, which operates 1,900 gas stations in North America and whose stock has easily outperformed VLO in recent months; Gabelli last week increased its 2014 EPS estimate on CST because of lower oil prices.
  4. MUSA and MPC, also created as gas station spinoffs from refineries, have outperformed their parent companies as well.
  5. Tesoro (NYSE:TSO) said its retail segment enjoyed record performance in the most recent quarter, while big box stores such as Costco (NASDAQ:COST) that have gas stations connected to their stores also noted the benefit of lower oil prices in their earnings reports.

Hope is dangerous in this game.
  • #6,388
  • Dec 22, 2014 8:56am Dec 22, 2014 8:56am
Quoting The Fool
IWM not been able to break above $120 on several attempts in 2014, looks like it is getting ready to try again. Cheap dd idea pays better if it falls back... {image} {image}
Hey TF!
This "cat" looking pretty strange... with one "ear" lower. But the price for entire IWM combo is

Also, can you say a few words about that RSX Broken-Wing Butterfly idea?
Hope is dangerous in this game.
  • #6,389
  • Dec 22, 2014 9:12am Dec 22, 2014 9:12am
Another interesting article about crude oil... contango, backwardation, spreads...

The Best Commodity Trade For 2015 - Oil Cash And Carry: Minimal Risk, Huge Potential

Summary

  1. Backwardation and contango in crude oil.
  2. June-December 2014 - a huge shift.
  3. Cheap financing and storage equals opportunity.
  4. Oil tankers set for a big year.
  5. The big oil trade for 2015: risk-reward.

Hope is dangerous in this game.
  • #6,390
  • Dec 22, 2014 9:15am Dec 22, 2014 9:15am
Quoting StrayDog
{quote} Hey TF! This "cat" looking pretty strange... with one "ear" lower. But the price for entire IWM combo is Also, can you say a few words about that RSX Broken-Wing Butterfly idea?
Good Morning, SDog - not sure I could bite on RSX yet. Natgas rout has my accounts bleeding but all the UNG spreads I am in are long dated (long legs @ Apr), I have been buying back Jan short legs for $0.05...true to my fade form, I am still looking for a bounce, just got filled for $0.08 on a Jan5 $19/$19.5 vertical. Gotta run, will yak at ya later...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,391
  • Edited 5:45pm Dec 22, 2014 4:14pm | Edited 5:45pm
Quoting StrayDog
{quote} Hey TF! This "cat" looking pretty strange... with one "ear" lower. But the price for entire IWM combo is Also, can you say a few words about that RSX Broken-Wing Butterfly idea?
Yup, Mon-Tue this week unfortunately just a brief window at market open for me to maybe do some trading. Phun, I love getting up at 0500 after going to bed at 0130. I am content to wait/see what IWM will do, that $120 triple top could be tough to crack. re: RSX, waiting a little there, too - I doubt RSX can hold any upward momo in the face of another down wave in crude prices.

Gold slide a bright spot for me, as I got in some cheap debit Jan GLD bear put spreads last week - but down there, like $109.50/$109. So I need another 2-3 days of $20-30 drops.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,392
  • Dec 23, 2014 12:56am Dec 23, 2014 12:56am
EBAY ER's Jan4 week, Jan4/Jan5 $56 put calendar mid priced $0.07 today. Might be got a little cheaper in coming days as front option iv gets up. Check other strikes in puts/calls...

http://screencast.com/t/oOYnSOy5z
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,393
  • Dec 23, 2014 1:28am Dec 23, 2014 1:28am
Quoting The Fool
{quote} 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....
~1 week later and that trade is still there, I will try to get filled on it Tues. The long-shot otm debit spreads are always around, risk $0.05 to make $1.00, woohoo etc, but imho it's best to give yourself plenty o time. The vid runs the P/L thru the entire timeline, note the front b/e is very much more forgiving early on. So...time is your friend: you might need time to get a full move into the fattest part of the P/L...but...time is your enemy: the more time passes the further out the b/e gets. As always, it's a gamble, so, as always, get in cheap on something that actually has a shot.

http://screencast.com/t/01sNdLWNezk
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,394
  • Dec 23, 2014 1:33am Dec 23, 2014 1:33am
Quoting The Fool
looking out to Jan ER's, starting Jan4 week, names of interest: 1/20: FCX, HAL, NFLX, SNDK 1/21: EBAY 1/22: LUV, SBUX 1/26: AAPL, MSFT, YHOO 1/27: FB 1/28: AMZN, BA, GOOGL 1/29: F 2/3: YELP 2/4: EXPE, DIS,YUM; 2/10: Z; 2/11: CSCO
check check
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,395
  • Dec 23, 2014 8:24am Dec 23, 2014 8:24am
Quoting The Fool
Natgas rout has my accounts bleeding but all the UNG spreads I am in are long dated (long legs @ Apr), I have been buying back Jan short legs for $0.05...true to my fade form, I am still looking for a bounce, just got filled for $0.08 on a Jan5 $19/$19.5 vertical. Gotta run, will yak at ya later...
From tt cherry bomb:
"In Feb UNG options, the 10% OTM calls are about 45% more expensive than the 10% OTM puts. While I don’t think the panic selling in /NG or UNG is over, natural gas might be setting up as a contrarian trade in the next couple of weeks. At least the market thinks so, too."
Hope is dangerous in this game.
  • #6,396
  • Dec 23, 2014 8:59am Dec 23, 2014 8:59am
Quoting StrayDog
... 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......I did that for $0.74 credit. .....
That was on Dec 10...almost 2 weeks ago. That trade was never ever positive, because IVR on BBY was 58 at the time I did the short strangle, and it was only going up, and was over 80 at one point...Then it start to normalize little by little with IVR and VIX dropping. During that time, BBY had a rally to almost $39.50. Both of my short strikes was never in danger, but since I don't think the mofo is going down any time soon, I rolled the 31 put up to 34 strike, to collect additional $0.21 credit.
Hope is dangerous in this game.
  • #6,397
  • Dec 23, 2014 9:01am Dec 23, 2014 9:01am
Quoting StrayDog
{quote} From tt cherry bomb: "In Feb UNG options, the 10% OTM calls are about 45% more expensive than the 10% OTM puts. While I don’t think the panic selling in /NG or UNG is over, natural gas might be setting up as a contrarian trade in the next couple of weeks. At least the market thinks so, too."
Yeah, but Old Man Winter I heard has been seen playing shuffleboard in Boca Raton. We have had just a few frosty nights here, otherwise pineapple flavored winds keep coming in off the Pacific. Trees are budding out early, flies are buzzing, caterpillars are crawling. There has been almost no winter....natgas will show some life when that changes. Every contra trade I have made in UNG has bled all over my balance sheets...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,398
  • Dec 23, 2014 9:07am Dec 23, 2014 9:07am
Quoting The Fool
.... Trees are budding out early, flies are buzzing, caterpillars are crawling. There has been almost no winter....natgas will show some life when that changes. Every contra trade I have made in UNG has bled all over my balance sheets...
Yes I know... same thing here in Belgrade... I was out with my daughter in children park today, on +15 Celsius. We didn't have snow yet.
Global warming? Nah, that's just "conspiracy theories"... F#ck New Year without snow.

Counter trading natgas and oil... one could use a lot of luck also, to get that bottom.
Hope is dangerous in this game.
  • #6,399
  • Dec 23, 2014 9:36am Dec 23, 2014 9:36am
Quoting The Fool
EBAY ER's Jan4 week, Jan4/Jan5 $56 put calendar mid priced $0.07 today. Might be got a little cheaper in coming days as front option iv gets up. Check other strikes in puts/calls
nothing that cheap now, sitting on lotsa dry powder
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,400
  • Dec 23, 2014 12:04pm Dec 23, 2014 12:04pm
I was looking yesterday at MCD, because the stock has very high IVR, but couldn't find any strategy that I would like to trade.

This is interesting idea, a broken-wing Iron Fly on MCD.
You don't have upside risk, because credit received is greater than width of call spread... neutral/bullish play. POP is totally different on IB...
Risk/reward is roughly 1:1, margin requirement $500.

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Hope is dangerous in this game.
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