Let's Trade Options

Contagion....Greek flu....

https://www.tastytrade.com/tt/shows/...4?locale=en-US

earnings calendar ideas...MU $32 put Jan2/Jan has about 20% iv difference front to back...debit $0.11, might get it cheaper than that if wait until the last hours. Check calls and other strikes...

What do you think of BBBY (Jan 8th)? I've got a Diagonal: Jan 16 $76 / Feb 06 $77.

did this one, $0.12 risked to make max $0.38 if SPY trades below $195 near month's end

You got credit on it - how much? Looks like you'll get to keep it if BBBY dips on the ER and stays down until Jan opex. Nice steep vol crush on prior ER's...

Got $0.22 credit on it last Friday. Thanks for the graph, nice one.

Looking to play a bounce on petro stocks/etf's, but not gonna risk much & not looking for anything overnight...

About 1.5 hours ago, I did first trade in 2015... SPY Feb bear call spread 208/210 (46 DTE), for $0.73 credit.

Was trying to enter SPY Feb6 200/199.5 put spread for $0.11 or $0.12 debit, but missed that for $0.01 , after that had some technical difficulties, so that is it m/l.

I have done several of the SPY bear put spreads, all around $0.12 debit, +/- a cent or 2....mostly Jan5 or later...all $0.50 spreads, none higher than $200.00

http://finance.yahoo.com/news/saudi-...181058283.html

oil bottom? not yet....

IDEAS to exploit down move
1. Didn't get a fill at midpoint on SPY Jan30 200.50/200 put spreads... tried at $0.15. The "problem" with this $0.5 wide spreads are the xxx.50 leg, which usually have much much less volume, then the round number leg. Currently volume is more than 10,000 Jan30 200 calls, but only about 550 of 200.50. This would be filled at midpoint in a instant on monthly expiry.

2. Interested also on QQQ Feb 105/106 bear call spreads, IF it makes some pullback, then it could get filled at $0.35 credit. Huge margin required on naked short calls on both QQQ and SPY, with bigger account I would just short the 105 calls, (margin req EUR 1,500+ per contract) to exploit high IVR of 65 and VIX is above $20.

Options sellers are busy now, at least the ones that know what are they doing. So, market can go now sideways or down, but you will make money either way, on call and call spreads selling... time decay, vol contraction... So I would like to combine that with more aggressive approach, like OTM debit spreads, where you must get the direction and timing right.

divergences

http://www.valuewalk.com/2015/01/jef...-oil-prices/2/

"Why should Russian securities be attractive right now?

Jeff Gundlach: I am not saying they are going to do well but I do not think that they are incrementally risky versus the high flying markets because they have diverted somewhat. So you end up in these funny situations where the things that are the scariest because they already lost so much value, are actually the safest. And I think that is the case today. For example, the Rubel is actually a decent speculation. It is incredibly risky but it lost so much in value that it is probably drastically oversold. The Rubel is falling like a knife so it could easily drop another 15% this month. But I would bet just about anything that the Russian currency sometime in the next six months will be at least 15% higher than it is today."

Just how crazy is Putin? Do we really want to know...?
http://www.forbes.com/sites/nathanva...rtner=yahootix

if the SnP will bounce a little bit tomorrow I will look to sell some Jan SPY bear call spreads

$50/bbl the g-spot?

http://www.bloomberg.com/news/2015-0...an-buyers.html
"Saudi Arabia raised the cost of its oil sales to Asia in February, prompting speculation the world’s biggest exporter is retreating from using record price discounts to defend market share.

well, /CL dropping visibly in early London trade, looks to melt thru $49 early...

Typical ER calendar play has you selling a front put/call in the week or month before the ER, and buying the back option in the week/month following (or perhaps of) the ER. You sell the front pretty close (5 dte or less) to the ER. You are counting on the credit from the front sale to get you into a well placed option in the week/month of the ER.

But, you can exploit front/back options skew on the expiries beyond the ER. You still need to try to catch the peak of the IVR pre-ER, but you can wait till the day(s) before the ER. The Liz/Jenny way has you sell the front option right b4 the ER, ok, but they sell an option with just a few dte, at most. You can do better by selling a front option further out and you will get a fatter credit, bringing down the cost of the calendar.

An example on BBBY, ER is 1/8. L&J might sell Jan2/buy Jan. I say sell Jan, buy Jan4. Here's how they compare on a $72 put calendar...

IV's: Jan2 $72 put: 0.693; Jan $72 put: 0.495; Jan4 $72 put: 0.413

Jan2/Jan $72 put calendar debits $0.21 @ mid --- Jan/Jan4 $72 put calendar debits $0.12 @ mid. P/L won't look like the below as the iv of both front/back options will drop ~15% after the ER, if you get a move in the following week close to the calendar strike I'd bet you'd still have a max P of 4x or better...

You are still getting some (8-9%) iv spread, still getting the potential volatile move of the ER, getting a cheaper calendar, getting a little time beyond the ER to manage - what's not to like?

looking at MU, ER's ah 1/6, more liquid trade - the Jan2/Jan and Jan/Jan4 $36 call calendars both debit $0.12 @ mid (actually Jan/Jan4 is $0.01 cheaper)....

More time could be good or bad, depending on how the stock moves. Add a put calendar, double up to get the kitty... ...meow!

bottom picking natgas has ruined my Dec/Jan books, no polar vortex this year, /NG about to sink to a new 52-week low, will probably drop below $2.50. The trend is your friend, I will repeat 1,000 times...

On last ER's cycle, I did a Iron Condor for MU. ER's was on Thursday, so I did it with options that expire the following week. That was good, because MU broke E.M. to the upside, and price was in the middle of call side of IC. But, at the end it did pull back a little (a few days later), allowing me to close that side for b/e, and making money on the put side.

I am interested in same thing for today, so Iron Condor, OR I would go for short strangle, depending of the options juice.