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Let's Trade Options

  • #7,461
  • Mar 1, 2015 6:21am Mar 1, 2015 6:21am
I have yet to trade options on /6E, mainly because I can't do it from the IRA accounts. I will give it a shot in other accounts now, though. Getting filled at the mid on these is a huge gift - I will believe it when I see it. The Apr/May $1.09/$1.085 put diag risks $37 to make max $805 for a 1-lot...that is, if you fill it way down at 0.0003.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,462
  • Mar 1, 2015 2:07pm Mar 1, 2015 2:07pm
Quoting The Fool
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"...
That is a constant battle between Morgan Stanley, always a TSLA bull, and few days after their upgrade, there goes Bank of America Merrill Lynch, with a downgrade .... I noticed this pattern 2 times before. TSLA perma bull and perma bear...
Hope is dangerous in this game.
  • #7,463
  • Mar 1, 2015 2:10pm Mar 1, 2015 2:10pm
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....
Exactly.
Hope is dangerous in this game.
  • #7,464
  • Mar 1, 2015 2:24pm Mar 1, 2015 2:24pm
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
In that case, we should consider put spreads like you and TF discussed, not only on TSLA and indices, but also on other high-fliers momo stocks, since they are the ones who will get hit with larger % of pain, than the broad market... Lets say AMZN, NFLX, TWTR, LNKD, MNST, YELP, SPLK, PCLN and so on...

There will be no talking of valuations until the market is already down more than 5%... Then, the talking heads will start to pure oil to the fire, like:
"Well, you know, no wonder that XYZ is falling like a drunken bitch , with p/e of 850"... and so on... It happened before. First pump and dump - then pump to slump, I guess...

Rotation to EU markets - just look at previous week, and compare DAX with SPX. Nothing more. Japanese Nikkei is every day on ATH... but FTSE made breakout last week. There are some big good markets elsewhere. Germany, France, UK... Eurostoxx50... Eurostoxx600... for serious stuff. Greece for speculation. Just look at their state-owned electricity company, banks... lots of moving there, like 6-10% daily.
Hope is dangerous in this game.
  • #7,465
  • Mar 1, 2015 5:42pm Mar 1, 2015 5:42pm
TWTR looks like it wants to break down to the low $40's range
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,466
  • Mar 1, 2015 9:27pm Mar 1, 2015 9:27pm
http://www.bloomberg.com/news/articl...o-buys-linkers

bonds down, gold up, as (if) inflation expectations take hold...?
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  • #7,467
  • Mar 1, 2015 11:57pm Mar 1, 2015 11:57pm
ONE TO FADE?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,468
  • Mar 2, 2015 1:49am Mar 2, 2015 1:49am
Quoting Cecil Gee
{quote} looking for a pull back on SPY to around 190, already started from Friday
Ima just keep baiting these hooks...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,469
  • Mar 2, 2015 6:08am Mar 2, 2015 6:08am
Quoting The Fool
ONE TO FADE?
Hey TF!
Possibly... CRM could be faded next day after earnings... (I just have to trade that also... like tastytrade guys, they are always "scalping around positions")

I am just thinking about a combo I saw a few times... put spreads that are financed with selling a further OTM put... You do this for a credit, and eliminate not only upside risk, but also a no-move risk, like we all had last week with SPY put spreads.

Another version of this, with different DTE
You could sell a further OTM put but more expensive - with different DTE, like 45 DTE, and use 1/2 (or less) of that credit for several cheap weekly debit put spreads. If they expire worthless, use more of credit next week for more put spreads. There are normal vol skew on index options all the time, meaning that puts alone (with decent DTE) are always expensive... they just get more expensive with higher VIX. IMO, this combo is less risky on SPY, QQQ, IWM... than on individual stocks, but it is applicable on anything.

What do you think about that?
Hope is dangerous in this game.
  • #7,470
  • Mar 2, 2015 6:23am Mar 2, 2015 6:23am
Quoting StrayDog
What do you think about that?
4:20AM here, having trouble thinking, need coffee....can you show an example?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,471
  • Mar 2, 2015 6:37am Mar 2, 2015 6:37am
I might look for a quick gainer on GLD....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,472
  • Mar 2, 2015 8:14am Mar 2, 2015 8:14am
Quoting The Fool
{quote} 4:20AM here, having trouble thinking, need coffee....can you show an example?
Sure. TP had an idea last week. Here it is:

TP Says...
Thursday February 26, 2015

The rally in AMZN over the past 20 days is one of the largest percentage (25%) and point changes ($78) the stock has had in 5 years. It went from being kind of a dog last year to outperforming the other big NASDAQ stocks like MSFT, GOOG, and even AAPL since the beginning of this year. AMZN just looks like it wants to be shorted, but it could keep moving higher. So, what’s the trade? With a vol rank at 12%, short premium strategies aren’t the obvious choice. But because the implied vol skew is relatively steep in the April puts, you can buy the April 380/390 put spread for about 3.85 debit, and finance it by shorting the April 360 put for 5.15. The whole package has an 83% prob of profit, and a break even just under $350 with no risk to the upside.

Hope is dangerous in this game.
  • #7,473
  • Mar 2, 2015 9:04am Mar 2, 2015 9:04am
BBY has ER's tomorrow BMO... You can't trust retailers. I wouldn't sell premium on this one... rather buy a strangle, like 37/40 weekly, with $1.5 room on each side, OR wait FADE after the statement...



I did VXX Apr 25/23 bull put spread for $0.72 CR right at open... obviously I was too quick, better prices now.


Another "dip" on indices, another bunch of happy buyers... I should be on the sidelines for some time... not considerable time, but waiting, with no rush... just be patient... (that FED lingo is a bitch)
Hope is dangerous in this game.
  • #7,474
  • Mar 2, 2015 9:35am Mar 2, 2015 9:35am
Mondays are a bitch....I thought we would see COMP push to 5k, since what the hell we were almost there....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,475
  • Mar 2, 2015 1:23pm Mar 2, 2015 1:23pm
Yeah... 5000 again today

Attached Image


And I had a short MNST... (got away with $30 loss, not a biggie )
Hope is dangerous in this game.
  • #7,476
  • Mar 2, 2015 2:20pm Mar 2, 2015 2:20pm
CB's of the world unite in epic and never-ending bear slaughter. PBOC now, ECB soon, wtf, just buy something. I guess I am gonna have to nut up and do something about my Mar SPY spreads that are bleeding my accounts. There are some add-on trades I can do to limit my losses if markets keep on steamrolling north. So I get to tie up most of my free margin to try to guarantee a small loss. Great...I love trading. Will illustrate later....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,477
  • Mar 2, 2015 2:30pm Mar 2, 2015 2:30pm
Quoting StrayDog
{quote} Sure. ...you can buy the April 380/390 put spread for about 3.85 debit, and finance it by shorting the April 360 put for 5.15. The whole package has an 83% prob of profit, and a break even just under $350 with no risk to the upside.
Yes, I like it. Like the concept - did they call it a Super Bear before somewhere?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,478
  • Mar 2, 2015 2:42pm Mar 2, 2015 2:42pm
Quoting The Fool
{quote} Yes, I like it. Like the concept - did they call it a Super Bear before somewhere?
Idk... but that would save my ass in some trades, that added naked component. Margin req is pretty high for selling puts on SPY, and very high for AMZN, though.

Struggling to find something to trade... Easy if you are holding long positions for years and years, but for opening new positions it is a tough one.
Hope is dangerous in this game.
  • #7,479
  • Mar 2, 2015 3:33pm Mar 2, 2015 3:33pm
[quote=StrayDog;8106728] Struggling to find something to trade....[/quote

I am tempted to keep trading SPY and QQQ diagonals. Just put em on for wash or credit and give enough room in either direction. When you are doing those short term (ie, 15-20 dte m/l) - they are pretty dicey, it's all about where the u/l is in the last coupe days - but if you get in for close to $0 and give yourself enough room, they are worth the risk and the margin tie up. I am working on scheduling these so I always have something coming due every week...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,480
  • Mar 3, 2015 7:39am Mar 3, 2015 7:39am
US index futures showing red early, could we see something like a pullback taking shape? C'mon, seriously? I have lost the ability to believe in any such thing. I have a SPY $210.5/$210 put spread for Friday expiry, bought yesterday for $0.10 - if I get the chance to close it for $20 net, I will take it....I must've been high.

UST's continue selling off....US stocks the new safe haven, they just go up forever...
"If The Fool persists in his Folly he will become wise." - William Blake
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