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Let's Trade Options

  • #6,761
  • Jan 21, 2015 11:12am Jan 21, 2015 11:12am
Quoting StrayDog
So many opinions out there... Why European QE is bearish for U.S. stocks ...... to late for me to drink more coffee... Next trade for me, after Draghi...
a wise choice to wait, perhaps, but then you have Greek elections, FOMC next week. Atm I am leaning toward a dovish ECB, new lows for eur/usd, more upside for US indices...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,762
  • Jan 21, 2015 12:12pm Jan 21, 2015 12:12pm
here's a FXE combo trade I am mulling over, a bet that eur/usd will continue its slide toward parity. Its a bear put diagonal for small credit combo'd with a bear put vertical for small debit. By adding the vertical, I drop the b/e from $108.30 to $107.00 and increase the max P somewhat. I forfeit the small credit for a small loss if I am wrong about the euro move - just a $50 loss on a 10-lot trade. Of course, I could do something similar to the upside.

I am not sure if this combo has been given an animal name yet, but I am going to pretend that I just discovered it, and call it the Most Excellent Combo, or MEC for short.

http://screencast.com/t/9wtPWcUd71d
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,763
  • Jan 21, 2015 12:17pm Jan 21, 2015 12:17pm
Quoting The Fool
here's a FXE combo trade I am mulling over
I might do the diagonal and wait to get in a vertical after the ECB smoke clears
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,764
  • Jan 21, 2015 1:03pm Jan 21, 2015 1:03pm
thought these might fill near the close, but no dice - will look tomorrow...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,765
  • Jan 21, 2015 7:51pm Jan 21, 2015 7:51pm
I am sure eventually I can find a trade that will work....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,766
  • Edited Jan 22, 2015 12:12am Jan 21, 2015 11:23pm | Edited Jan 22, 2015 12:12am
Quoting The Fool
I am sure eventually I can find a trade that will work...
How about a 1,100 pip profit range on eur/usd (/6e) with just 2 weeks to get her done? Feb/Mar $1.13/$1.19 double calendar costs $1,000 to put on, eats $700 +/- in buying power, & has max P's under the calendar strikes of $750 +/-, around $425 at the dip, b/e's at $1.1 and $1.21...I will look at $1.12/$1.20, too.

Not sure I'd put this on pre-ECB, but damn, does it get any easier to guarantee some profit?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,767
  • Edited Jan 22, 2015 12:12am Jan 21, 2015 11:34pm | Edited Jan 22, 2015 12:12am
Feb/Mar /6E $1.12/$1.20 goes on cheaper, eats less bp, but still has $750+ max P's, and even wider b/e's - $1.093 to $1.226, a 1,300 pip range, mid dip is $102 min...nice kitty!
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,768
  • Jan 22, 2015 12:23am Jan 22, 2015 12:23am
QE inception sunk UST's in the USA, will ECB QE do the same for Eurozone sov debt? Been watching 30y bond drop last few days, still dropping overnight.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,769
  • Jan 22, 2015 12:35am Jan 22, 2015 12:35am
$130 run for gold in Jan, can it continue? Can gold swim up against the current of strengthening USD? I'd bet gold will move with bonds (contra bond yields)...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,770
  • Jan 22, 2015 2:03am Jan 22, 2015 2:03am
Hi mate,

two quick questions..

whats the platform name and what are costs conected with this platform ? per month or something..
Is 2k enough to start learning this art? Or what do you reckon?

thank you
  • #6,771
  • Jan 22, 2015 2:06am Jan 22, 2015 2:06am
Quoting The Fool
$130 run for gold in Jan, can it continue? Can gold swim up against the current of strengthening USD? I'd bet gold will move with bonds (contra bond yields)... {image}
you think bonds are gonna be switched in next months? 10y already had some move last few 8hs. same goes for japan on the same maturity.
actually in my opinion we aint stopping yet. fed meets relatively quick and all can change but as things stand atm we could easily go 1,5p on 10y
  • #6,772
  • Jan 22, 2015 2:24am Jan 22, 2015 2:24am
Quoting 21vs7
Hi mate, two quick questions...
Mate it took you so long to find Fool´s sanctuary? Should have told ya
"I know one thing, that I know nothing." Sokrates
  • #6,773
  • Jan 22, 2015 3:02am Jan 22, 2015 3:02am
Quoting Tom_D_Trader
{quote} Mate it took you so long to find Fool´s sanctuary? Should have told ya
handicaped by nature. free mouney goes ag me.
have some experiance with options but never looked into them retail stuff
love the 10 lot fairytale
  • #6,774
  • Jan 22, 2015 3:06am Jan 22, 2015 3:06am
Quoting 21vs7
{quote} handicaped by nature. free mouney goes ag me. have some experiance with options but never looked into them retail stuff love the 10 lot fairytale
It is not just those options man. Fool is the man. With Sisse these two are my favourite posters here, both have great knowledge of major flows.

Hats off to you Fool!

Btw., while cheering here - that status of mine doesnt refer to you ofc - but to Greater Fool Theory. I just love tulips .

T
"I know one thing, that I know nothing." Sokrates
  • #6,775
  • Jan 22, 2015 6:47am Jan 22, 2015 6:47am
Quoting 21vs7
Hi mate, two quick questions.. whats the platform name and what are costs conected with this platform ? per month or something.. Is 2k enough to start learning this art? Or what do you reckon? thank you
hi there, platform is thinkorswim (ToS) and you get on it thru TDAmeritrade. You can open an account there with 0 balance, but not sure if they are open to non-US residents. Another decent free platform is at dough.com. Also check out tastytrade...

To do trades that require margin options brokers usually require a min account balance of $2,500, but you can trade non-margin setups with even less than that. Very worthwhile doing some prolonged paper trading first
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,776
  • Edited 7:12am Jan 22, 2015 7:00am | Edited 7:12am
Quoting 21vs7
{quote} you think bonds are gonna be switched in next months? 10y already had some move last few 8hs. same goes for japan on the same maturity. actually in my opinion we aint stopping yet. fed meets relatively quick and all can change but as things stand atm we could easily go 1,5p on 10y
yeah, it would probably take QE4 in the USA to finally put the brakes on long UST's
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,777
  • Jan 22, 2015 7:01am Jan 22, 2015 7:01am
Quoting Tom_D_Trader
{quote} It is not just those options man. Fool is the man. With Sisse these two are my favourite posters here, both have great knowledge of major flows. Hats off to you Fool! Btw., while cheering here - that status of mine doesnt refer to you ofc - but to Greater Fool Theory. I just love tulips . T
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,778
  • Jan 22, 2015 11:37am Jan 22, 2015 11:37am
FXCM shares up 45% today - long dated options are there, I wonder how much it can regain in another bull market year?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,779
  • Jan 22, 2015 11:52am Jan 22, 2015 11:52am
Was it Rotschild saying: Buy when there is blood on the streets and sell on the sound of trumpettes? Not sure here... . Wouldnt buy stocks anyway, too risky for me.
"I know one thing, that I know nothing." Sokrates
  • #6,780
  • Jan 22, 2015 12:09pm Jan 22, 2015 12:09pm
I used to own lots of stocks, now just a few, have liquidated most in the last year or so to fund my options trading habit. FXCM dropped from $15 to $1.50 in a couple days, natural to look for a bounce. You could buy May $5 calls for $0.45, or you could do a Aug $7.50/$10 bull call spread for $0.10-$0.15. Defined risk, huge upside potential....if FXCM makes a good comeback.
"If The Fool persists in his Folly he will become wise." - William Blake
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