Let's Trade Options

MU double calendar cost $0.23 to get in and about $0.05 to get out, MU shares went below $29 and never recovered in the last days of the week.

cost $0.08 to get in and $0.40 to get out. Yikes. Worst loss of the month. The diagonal death slide is a mofo. SNB jacked the gold price when they opened the door to deep negative overnight rates at CB's everywhere. I could've done better, though, and got out with a loss < half of what it finally cost me. Oh well. GLD double diagonal was a good idea and was on its way to good profit until the SNB shook up the world.

Have a good weekend folks.

SPY bull call diagonal is temporarily slightly underwater. The diagonals are a time spread, your timing has to be right along with your directional bet. If the underlying moves too far too fast, you will have to look at your trade underwater and live with that or get out. My simple rule of thumb is to get an estimate of the b/e share prices on expiration day and consider those as triggers for deciding to bail on the trade or not. If the share price has got there quite too fast, you will be underwater on the trade and it will cost you to get out. That is a good argument for getting into the diagonal spreads for as small a debit as you can or even a credit, although that won't keep you from losing money. Another thing: you have to re-assess the b/e points for the trade on a daily basis, as they will change constantly with changes in the Greeks.

Despite having my ass handed to me several times & suffering large losses trading diagonal spreads, I will keep trading them - the r:r is very high. You just have to recognize the various hazards and be ready to cut losses when they threaten.

http://screencast.com/t/bqSsB73l

I got in this FB double diagonal several weeks ago and I have been looking at it underwater almost the whole time. It is sitting near b/e after today, down just the cost of comms - it was $0.08 credit to get in, though, so it's still underwater. But I entered expecting to get out on the day of the ER, 1/28 (pre-ER). I want FB to move back up to around $78-$80. Max P is $0.87 on 1/28 @ $79.70. Downside b/e on 1/28 is $72.70. FB closed today @ $75.15.

Double diagonals get you in a trade that can profit if the u/l moves up or down. You only need margin to cover one side of the trade, but you get dinged by comms for all the parts.

http://screencast.com/t/PJ1D2KvwaXnm

if it sounds to good to be true, probably is --- a $0.00 mid on a bear put /6E vertical put spread....$1.11-$1.12 by 3/6 might be a stretch, might see it by end of Jan if Draghi rocks the world next week

Mar $1.135/$1.13 might be a better bet

http://www.reuters.com/article/2015/...0UU4KF20150116

fade the done deal? Fiber will pop if Draghi doesn't bring it, UST's will drop...risk $113 to make $508 by 2/6

GLD Super Bull. One approach is a wide (2-month) spread otm calendar, see the Mar/May $130 call calendar, 60 dte, costs $1.10, but has a huge profit range of $122 to $139. Offset the high debit with short term credit spreads, $0.15-$0.20 credit a pop, multiple times on 10-20 dte vert put spreads.

I was a fool. To go long natgas, that is. But I have been turning my long UNG trades around...most were long dated....will have a chance of breaking even on them by Mar/Apr, prolly the best I can do. Need natgas to range or rise somewhat this Spring, but all forecasts for N. America continue to show longterm outlook for temps much warmer than normal, generally. Western US has had little Winter. No snow in the lowlands where I live. Snowpack in the Olympics and Cascades 20% of normal, not sure of the Sierras in CA, but likely the same, drought there entrenched and epic now...

NOAA said 2014 was the hottest year ever recorded, projections showing 2015 following suit. Natgas could get bid on projected cooling loads, seasonal ag demand...maybe if Summer will take up the demand slack left over from Winter, but no getting around the supply glut, either. Not an easy trade. Tough time to be a polar bear, too. How long til you can sail right across the North Pole?

Opportunity?

euro QE will be da bomb, EFA will rocket up, risk $100 to make $900 on this bull call vertical

More EFA, a nearly free bull call calendar, risk $35 to make $285 max

speaking of weather...if I could not have become a successful Fool, I would probably have become a geophysicist. One of my favorite weather men is Cliff Mass, out of the U of WA - here's his blog

http://cliffmass.blogspot.com/

10 years old from Tom P.

mediaserver.thinkorswim.com/articles/TPDubDiagArticle.pdf

What do RIG, GRMN, NE, and WFT have in common?

AAPL ER's 1/27

let's see...

Nice, I like TP.

Nice idea, but EFA has Australia and Far East also, why not choose something with strictly European exposure?

http://etfdb.com/etfdb-category/europe-equities/

I don't know which of these ETFs (if any) has normal trade-able options... Maybe EWG, only German, but DAX is on fire, expecting Draghi to deliver.

I don't really like any of the European stock index etf's, options volume just too thin. Maybe best way to trade potential Draghi let-down is long fiber (long EUR/USD)

EFA is a decent target with liquid options, it gets hit with some large options trades on a regular basis