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Let's Trade Options

  • #7,721
  • Mar 16, 2015 12:07pm Mar 16, 2015 12:07pm
Quoting StrayDog
Bearish FOMC would be great help, though.
Yeah, I have several trades based on a hawkish FOMC premise. But maybe that's all baked in? I am pretty well unbalanced short.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,722
  • Mar 16, 2015 1:56pm Mar 16, 2015 1:56pm
Quoting The Fool
{quote} Oh man, are we there yet? I am looking for SnP to bounce a little on Mon-Tue, I will be happy with anything >SPY $206.50. I will be looking to close any bullish positions by Tue-Wed. Then I will be looking to trade weekly bearish spreads in anticipation of a FOMC-induced panic...looking for a $6-$8 red candle for the week, possibly SPY < $200.
FOMC, Debt ceiling....? Pffft....another equity index btfd breakout. Don't fight the PBOC/ECB/etc...

...looking at some SPY bullish trades to balance out my books....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,723
  • Mar 16, 2015 2:14pm Mar 16, 2015 2:14pm
Quoting The Fool
...looking at some SPY bullish trades to balance out my books....
looking SPY Mar5/Apr1 $216/$216.5 call diag for just comms
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,724
  • Mar 16, 2015 2:29pm Mar 16, 2015 2:29pm
Ex Petrobras manager arrested for Swiss bank transfers

The arrest warrant was issued after prosecutors discovered transfers of about 20 million euros between accounts he managed in Switzerland and Monaco, and other transfers to U.S. and Hong Kong banks, amounts that were "not compatible" with his earnings at Petrobras, formally known as Petroleo Brasileiro SA.

not compatible with his earnings...
Hope is dangerous in this game.
  • #7,725
  • Mar 16, 2015 2:55pm Mar 16, 2015 2:55pm
Hey TF... What would happen with b/e points of calendar / diagonal, when IV drops?

Like this SPY calendar
Attached Image (click to enlarge)
Click to Enlarge Name: SPY-213-cal.PNG Size: 462 KB


What would happen with profit area?
Hope is dangerous in this game.
  • #7,726
  • Mar 16, 2015 3:30pm Mar 16, 2015 3:30pm
Quoting StrayDog
Hey TF... What would happen with b/e points of calendar / diagonal, when IV drops? Like this SPY calendar {image} What would happen with profit area?
will look at it this evening, SDog, ...laterz
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,727
  • Mar 16, 2015 10:35pm Mar 16, 2015 10:35pm
Quoting StrayDog
Hey TF... What would happen with b/e points of calendar / diagonal, when IV drops?
http://screencast.com/t/e0MBCf5jp

iv of those options down around 10.2%, not sure how much lower that will go, but....in the bottom right of the vid screen there's a toggle where I can raise/lower, globally, the options iv, by 0.1% increments - and vid shows me running down 3%.

So, you see the b/e's come in (squeeze) and the maxP comes down....
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-03-16_spy.png Size: 50 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,728
  • Mar 17, 2015 1:14am Mar 17, 2015 1:14am
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-03-uso.png Size: 66 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,729
  • Mar 17, 2015 9:04am Mar 17, 2015 9:04am
Quoting The Fool
{quote} http://screencast.com/t/e0MBCf5jp iv of those options down around 10.2%, not sure how much lower that will go, but....in the bottom right of the vid screen there's a toggle where I can raise/lower, globally, the options iv, by 0.1% increments - and vid shows me running down 3%. So, you see the b/e's come in (squeeze) and the maxP comes down.... {image}
Yeah, I thought so... That is why tasty trade recommends put calendars.
Re IV - it can be single digits... If we see a rally, that only means VIX down and IV down also, milk & honey all the way...
Hope is dangerous in this game.
  • #7,730
  • Mar 17, 2015 9:38am Mar 17, 2015 9:38am
Stiefel upgraded BABA... but sellers are there, right at resistance, slightly above $85...

Alibaba's Earliest Backers Can Soon Start Selling Shares

Good article... FOMC help would be nice for our put calendars.
Hope is dangerous in this game.
  • #7,731
  • Mar 17, 2015 12:01pm Mar 17, 2015 12:01pm
I was watching Liz&Jny show, and they put up a Iron Fly for ORCL ER's

Like this
Attached Image (click to enlarge)
Click to Enlarge Name: ORCL-IF.PNG Size: 555 KB


IVR is at 100, but there is simply not enough juice to sell a strangle. I read one article, with a warning that they could deliver bad guidance due to strong dollar... IMO it is better to sell a 43/43.5 call spread, than buy a 43/42.5 put spread, IF you are bearish on it....

Looking at ADBE also.
Hope is dangerous in this game.
  • #7,732
  • Edited 1:18pm Mar 17, 2015 12:32pm | Edited 1:18pm
Did a lil' Oil scalp... Shoulda do it with one future contract, but ...

Attached Image (click to enlarge)
Click to Enlarge Name: USO-CFDs-short.PNG Size: 6 KB


About 30 cents move on CL Apr contract, from $44.10 to $43.80... you can get like 10 or 11 cents on USO.
It takes about 2,700 USO to replace 1 CL Apr contract.


add-on
Missed to short it again from the very same level... Falling like a brick now...
Hope is dangerous in this game.
  • #7,733
  • Mar 17, 2015 1:55pm Mar 17, 2015 1:55pm
Quoting StrayDog
Stiefel upgraded BABA... but sellers are there, right at resistance, slightly above $85...... FOMC help would be nice for our put calendars.
Yeah, not sure why BABA not sliding, I am just gonna wait & see on that one. No new trades for me today, maybe tomorrow, screentime limited now, but will be tuned in for the FOMC show....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,734
  • Mar 17, 2015 2:22pm Mar 17, 2015 2:22pm
Preparing for expected rise in volatility tomorrow... I used this dip to buy some UVXY March 19.5/20 call spreads for $0.07 debit.
Hope is dangerous in this game.
  • #7,735
  • Mar 17, 2015 2:54pm Mar 17, 2015 2:54pm
Quoting The Fool
{quote} looking SPY Mar5/Apr1 $216/$216.5 call diag for just comms
You can get it now... just for comms.
Hope is dangerous in this game.
  • #7,736
  • Mar 17, 2015 3:28pm Mar 17, 2015 3:28pm
Quoting StrayDog
You can get it now... just for comms.
I tried filling some fotm SPY diagonals, have not even looked to see if they got in, will know soon enough. What got in PBR's butt today? That thing looks like it has gotten to be home for lots of daytraders, trading >40,000,000 shares a day...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,737
  • Edited 1:15am Mar 18, 2015 12:53am | Edited 1:15am
US stock and bond markets are not expressing much angst about the FOMC. Maybe that was played out in the 80-pt SnP drop over the first couple weeks of March. I am still looking to get in some st call diagonals, not giving into any biases, especially contra the ever-dovish Yellen Fed.

Looking at the Mar5/Apr1 calendars - with only 2 dte difference between the two expiries, the calendars are all pretty cheap....most expensive otm calendar I saw in calls has a $0.13 mid....shown below is the Mar5/Apr1 $211 calls calendar for $0.07 debit....maxP is >3:1
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-03-17_spy.png Size: 34 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,738
  • Mar 18, 2015 1:13am Mar 18, 2015 1:13am
http://finance.yahoo.com/video/bulli...145231230.html

I have no bias anymore, looking to get m/l neutral & also come out in profit when the dust settles. If anything, I will be more surprised to see a show of bear force, just too much yield-seeking liquidity flowing thru the system.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,739
  • Mar 18, 2015 5:59am Mar 18, 2015 5:59am
Quoting The Fool
http://finance.yahoo.com/video/bulli...145231230.html I have no bias anymore, looking to get m/l neutral & also come out in profit when the dust settles. If anything, I will be more surprised to see a show of bear force, just too much yield-seeking liquidity flowing thru the system.
Yeah, definitely the way to go, we must not have a bias, UNLESS it is crystal clear where the market is going... I expect we will get some clarity today.

Talking heads will battle until the last minute what will JY say today, but we cannot know that in advance.
One of the better articles (from 4-traders)
Fed set to ditch 'patient' rate vow as it eyes U.S., world growth

No matter what will be AFTER the FOMC, I think that TODAY we will see rise in volatility. One of the plays can be simply buying some amount of UVXY right now in premarket. It will be the wildest during the conference, I guess... I will look to close some or all of my vol plays today (Mar and Apr VXX bull put spreads, UVXY long shares, UVXY March call spreads).
SnP did give like 70-80 points from the top, but that is nothing, just a small dip.

And a question at the end - In case of dovish FOMC, is that means rate hike will be announced next time? Because next FOMC meeting is very soon, in 40 days time (Apr 29)... So SnP would do what exactly until then? Probably go to the previous highs and then what?
Hope is dangerous in this game.
  • #7,740
  • Mar 18, 2015 6:20am Mar 18, 2015 6:20am
Here is what expert on VIX, /VX, VXX... gotta to say about vol plays

TP Says...
Wednesday March 18, 2015

I realize that getting long volatility has a “Once more unto the breach, dear friends, once more” quality to it, but here’s my reasoning. With March /VX futures expired, the VXX portfolio is 100% in the April /VX futures (for today, anyway). The April/May /VX roll is about .60 debit, which means the negative drag on the VXX isn’t as large as it would be with the roll above, say, 1.00. That could provide some support to VXX. In the April weekly options with 37 days to expiry, selling the 26 puts for 1.40 generates over $2 of positive theta per day, has a 65% prob of expiring worthless, and an 80% prob of making 50% of the $140 max profit (in other words, 80% prob of making $70). It’s what King Henry would do.

Hope is dangerous in this game.
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