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Let's Trade Options

  • #7,441
  • Feb 28, 2015 12:48pm Feb 28, 2015 12:48pm
This Chart Is Worth 1,000 Words

Summary

  1. Wall Street has long had a clear bias of being bullish of stocks and bearish of bonds.
  2. Professional interest rate forecasters have a terrible track record of predicting the 10-year Treasury yield.
  3. Instead of spending your time playing the interest-rate guessing game, it is more productive to focus on the credit risk and present-day yield of the bonds on your watch list.

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Good, short article, nice chart.

Hope is dangerous in this game.
  • #7,442
  • Feb 28, 2015 12:50pm Feb 28, 2015 12:50pm
Quoting The Fool
{quote} it's cheap enough to just buy the stock, then you don't have to watch the calendar...no worry about time decay http://www.marketwatch.com/story/leu...?siteid=yhoof2
I agree. If they are on a path to revival, this is a good speculation.
Hope is dangerous in this game.
  • #7,443
  • Feb 28, 2015 2:41pm Feb 28, 2015 2:41pm
http://www.cnbc.com/id/102464261?__s...&doc=102464261#.

Thru the month of Feb we saw oil storage inventory data high but wti price supported - that's the oil storage contango scheme buying in effect. When storage volumes get thin or too expensive, that will tail off. If increased seasonal demand does not take up the slack, we could see another dip to $45 or below. That is a scenario probably worth a cheap (or @credit) USO put spread, maybe looking out to April...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,444
  • Feb 28, 2015 8:32pm Feb 28, 2015 8:32pm
Fuck You, Vladimir.

http://news.yahoo.com/lithuania-sign...232614157.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,445
  • Feb 28, 2015 9:19pm Feb 28, 2015 9:19pm
TSLA $65? Seriously?

http://www.fool.com/investing/genera...something.aspx

"Shares of Tesla Motors (NASDAQ: TSLA ) took a hit this past week after a top Wall Street analyst downgraded the stock -- while insisting that the bullish case for Tesla shares won't hold up. Bank of America Merrill Lynch auto analyst John Lovallo pulled no punches in his note about Tesla, saying that the "optimistic thesis" for Tesla has been "largely debunked" and cutting his price target for Tesla shares to $65."
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,446
  • Feb 28, 2015 9:48pm Feb 28, 2015 9:48pm
Quoting The Fool
TSLA $65? Seriously?
haha $0.02 credit on a $5 wide TSLA bear put spread....all because of the volume increase at the lower strike. Obviously they not gonna fill you on this for a credit, but it will be interesting to see where they might fill it.
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28_TSLA1.png Size: 64 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,447
  • Feb 28, 2015 9:58pm Feb 28, 2015 9:58pm
opps like the above not hard to find - just look for options price breaks around volume disparities. (Yeah...then Good Luck getting filled.) The Sep $115/$120 bear put vertical debits $0.26 - a 10-lot risks $260 to make $4,740 max. Well...one can dream.... P/L below shows trade at expiry - if you look at state of the P/L on June 20, for instance, the b/e is at $175.
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28_tsla2.png Size: 57 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,448
  • Feb 28, 2015 10:24pm Feb 28, 2015 10:24pm
somebody did a shitload of TSLA buy/writes on Friday. Each one of the 50-lot buy/writes is done by somebody who owns 5,000 shares of TSLA writing 50 Sep 210 calls at an approx price of $22/share, so each buy/write contract is worth about $2200, and each 50-lot block is about $110k in the bank. Obviously this is a bet that TSLA will be trading lower, will be <$210 by Sept expiry....a bet made by somebody who owns >100,000 TSLA shares.
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28_tsla4.png Size: 115 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,449
  • Feb 28, 2015 10:30pm Feb 28, 2015 10:30pm
TSLA 3-yr weekly chart - it was trading at <$50/share in April 2013. What goes up must (sometimes) come down...
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28tsla5.png Size: 124 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,450
  • Feb 28, 2015 10:44pm Feb 28, 2015 10:44pm
Quoting The Fool
TSLA 3-yr weekly chart - it was trading at <$50/share in April 2013. What goes up must (sometimes) come down...
I note on the weekly chart 4 times in the last 1.5 years that TSLA has dropped ~$60 in a month. Apr $145/$150 bear put vertical looks for such another drop, risks $0.18 to make $4.80 max...
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28_tsla6.png Size: 57 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,451
  • Feb 28, 2015 11:41pm Feb 28, 2015 11:41pm
UVXY dipping <$18, is within a buck of its alltime low. If it makes another few alltime lows I'd bet we will hear that they are gonna rev split it again. On a good day, though, UVXY can still throw down a 20% move.
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-02-28_uvxy.png Size: 56 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,452
  • Mar 1, 2015 3:10am Mar 1, 2015 3:10am
Quoting The Fool
{quote} I note on the weekly chart 4 times in the last 1.5 years that TSLA has dropped ~$60 in a month. Apr $145/$150 bear put vertical looks for such another drop, risks $0.18 to make $4.80 max... {image}
that is a good trade to be in as by looking at those charts TSLA may be in for some pain to come its way
  • #7,453
  • Mar 1, 2015 3:21am Mar 1, 2015 3:21am
Quoting The Fool
{quote} I note on the weekly chart 4 times in the last 1.5 years that TSLA has dropped ~$60 in a month. Apr $145/$150 bear put vertical looks for such another drop, risks $0.18 to make $4.80 max... {image}
I'll be taking TSLA vertical put trade out tomorrow, long 170 and write 160 for Aprils exp and will get my broker to try and get inside the spread for a net of 30c or lower
  • #7,454
  • Mar 1, 2015 3:24am Mar 1, 2015 3:24am
Quoting Cecil Gee
{quote} that is a good trade to be in as by looking at those charts TSLA may be in for some pain to come its way
there is a gap to fill at $39 dating back as far from March13, the onlt time these generally don't fill is if TSLA had been bought out
  • #7,455
  • Mar 1, 2015 3:28am Mar 1, 2015 3:28am
Quoting Cecil Gee
{quote} there is a gap to fill at $39 dating back as far from March13, the onlt time these generally don't fill is if TSLA had been bought out
yep I nearly beat myself to death trying to fade that relentless runup. If I had just bought some long-dated calls I would be retired living on a private island now
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,456
  • Mar 1, 2015 3:29am Mar 1, 2015 3:29am
Quoting Cecil Gee
{quote} looking for it to start falingl from here SPDR S&P 500 ETF (SPY) -NYSEArca 211.35 {image} 0.10(0.01%) 15:38 - Nasdaq Real Time Price
looking for a pull back on SPY to around 190, already started from Friday
  • #7,457
  • Mar 1, 2015 3:35am Mar 1, 2015 3:35am
Quoting Cecil Gee
{quote} looking for a pull back on SPY to around 190, already started from Friday
Could be, CG. On a purely tech level, all the US indices are stretched and overdue some blowing off. Given EZone QE cranking up in March, I have wondered if we might not see some rotation out of US equities, anyway. I will keep looking for cheap vert put spreads on QQQ and SPY....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,458
  • Mar 1, 2015 3:40am Mar 1, 2015 3:40am
Quoting The Fool
{quote} Could be, CG. On a purely tech level, all the US indices are stretched and overdue some blowing off. Given EZone QE cranking up in March, I have wondered if we might not see some rotation out of US equities, anyway. I will keep looking for cheap vert put spreads on QQQ and SPY....
its healthy if it does pull back, with no clear direction from yellen the market can not maintain this run up otherwise the pull back and correction that will eventually come, could have more pain than the financial crises seen 7/8 years ago
  • #7,459
  • Mar 1, 2015 3:45am Mar 1, 2015 3:45am
Quoting Cecil Gee
{quote} its healthy if it does pull back, with no clear direction from yellen the market can not maintain this run up otherwise the pull back and correction that will eventually come, could have more pain than the financial crises seen 7/8 years ago
sounds plausible to me....with rates low to neg on fixed income and most commodities beat down, though, there's nowhere else to go for yield but equities - so it would be helpful to have some catalytic influence. Maybe new threats of US Congress dysfunction will do that....we'll see.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,460
  • Mar 1, 2015 3:54am Mar 1, 2015 3:54am
Quoting Cecil Gee
{quote} I'll be taking TSLA vertical put trade out tomorrow, long 170 and write 160 for Aprils exp and will get my broker to try and get inside the spread for a net of 30c or lower
I can't see you getting in $10 wide for that low, I see a $0.77 mid on that as of Fri close - but good luck. P/L @ 77c fill below...the b/e on that trade is >$190 until almost the end of March.
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-03-01_tsla7.png Size: 58 KB
"If The Fool persists in his Folly he will become wise." - William Blake
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