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Let's Trade Options

  • #7,901
  • Mar 27, 2015 11:17pm Mar 27, 2015 11:17pm
TLT dropped $12.50 in the first 12 trading days of Feb, a bearish slide might ensue for April..... a 20-lot TLT Apr/Apr4 $121/$120.50 put diagonal goes on for $140 ($0.05 debit), b/e's down at $118.70 and up at $125.65, has maxP $1,100 +/- at $121.25. Fund it by selling a Apr call spread, $136/$137....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,902
  • Mar 28, 2015 12:01am Mar 28, 2015 12:01am
rising rates are friend of financials, look at XLF for bullish plays. XLF options are cheap, you can just long calls or try to leg into call spreads, or sell put spreads. XLF traded as high as $38.xx b4 the '08 crash, crashed to <$6.....currently trading at $24...the Dec/Jan calendars are very cheap
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,903
  • Mar 28, 2015 12:12am Mar 28, 2015 12:12am
XLE too
http://finance.yahoo.com/news/beaten...122040777.html
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,904
  • Mar 28, 2015 8:57pm Mar 28, 2015 8:57pm
Quoting The Fool
TLT dropped $12.50 in the first 12 trading days of Feb, a bearish slide might ensue for April.....
Somebody thinks TLT is heading up and they bought this bull call spread just b4 Friday close, as JY's hawkish words hung in the air. 17,060 lot spread cost $2.133 million to put on and could pay MaxP $6.37 million if TLT breaks new bull ground and goes >$140 by June expiry.

I don't think anybody else posting here is trying to trade the Treasury bond moves, so I won't go into it - but I have been thinking of taking the other side of this trade....and ...well...somebody with that much money is probably a lot smarter than me? so....I dunnooo....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,905
  • Mar 28, 2015 9:35pm Mar 28, 2015 9:35pm
What up, Rufus - what kind of options are you going to trade?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,906
  • Mar 28, 2015 9:53pm Mar 28, 2015 9:53pm
Quoting The Fool
XLE too http://finance.yahoo.com/news/beaten...122040777.html
there are quarterlies on XLE, so you can play June/Jun5 time spreads - that's an 11-day total spread. A lot can happen in 3 months, give yourself room to bleed...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,907
  • Mar 28, 2015 10:08pm Mar 28, 2015 10:08pm
Quoting The Fool
What up, Rufus - what kind of options are you going to trade?
Warming up to them again. Haven't stuck my toe in the water yet. Will in do time
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #7,908
  • Mar 28, 2015 10:18pm Mar 28, 2015 10:18pm
Quoting The Fool
What up, Rufus - what kind of options are you going to trade?
AS a matter of fact. Was looking at July calls on UGA, United States Gasoline Fund not long ago. But opted to buy the stock instead looking to give it more time. Still may grab up some calls though. It is my thinking that when it comes to gas and oil there seems to be a lot more upside then down.

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Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #7,909
  • Mar 28, 2015 11:04pm Mar 28, 2015 11:04pm
Quoting Rufus
AS a matter of fact. Was looking at July calls on UGA, United States Gasoline Fund not long ago. But opted to buy the stock instead looking to give it more time. Still may grab up some calls though. It is my thinking that when it comes to gas and oil there seems to be a lot more upside then down.
idk, buying UGA shares outright might be the best trade on gasoline. The options on UGA suck, volume too thin and so spreads are atrocious. You can trade the /RB futures, but the options volume on those are thin, too. When I want to let the oil market kick my ass, I usually trade the options on USO. Good liquidity on those, but the underlying is too cheap. I would trade /CL options, but mostly I am trading from IRA accounts and I can't trade futures options from those.

I think there's some really good money to be made on an oil bounce, but timing is everything with options. I have bets on WTI going back to $60-$65 by mid to late Summer. That'll be tough sledding if the USD is going to keep getting stronger, though. Oil is a complicated trade...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,910
  • Mar 28, 2015 11:51pm Mar 28, 2015 11:51pm
Quoting The Fool
{quote} Somebody thinks TLT is heading up and they bought this bull call spread just b4 Friday close, as JY's hawkish words hung in the air. 17,060 lot spread cost $2.133 million to put on and could pay MaxP $6.37 million if TLT breaks new bull ground and goes >$140 by June expiry.
Trading UST moves not the easiest thing to do, either, with CB divergence in effect. UST's yields increasing while other sovereigns' bonds are near 0% or lower, so FI yieldseekers buy UST's....holding their yields low & even pushing them down? Long case for long bonds is not dead, I may need to trade TLT with no bias, look at double diagonals...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,911
  • Mar 29, 2015 3:32pm Mar 29, 2015 3:32pm
we have two trading days until the end of month, looking at DOW futures and VIX we may see a large 400 plus point drop in them 2 remaining days so I'm looking at placing a put spread on the DIA
  • #7,912
  • Mar 29, 2015 3:35pm Mar 29, 2015 3:35pm
Quoting Cecil Gee
we have two trading days until the end of month, looking at DOW futures and VIX we may see a large 400 plus point drop in them 2 remaining days so I'm looking at placing a put spread on the DIA
trade below 17680 may start the ball rolling and price right now 17711
  • #7,913
  • Mar 29, 2015 4:33pm Mar 29, 2015 4:33pm
strong USD and weak oil will ride down the US indices

http://news.yahoo.com/analysis-once-...4--sector.html

"Unless demand picks up in China, oil could fall as low as $20 a barrel from its current price, and stay in a long-term range between $20 and $40 a barrel, said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management.

As for a return to the $100 a barrel prices from last spring, Fort Pitt's Smith said that the growth of renewable energy such as solar and the fracking boom have rendered that unlikely.

"We're not expecting to see $100 a barrel for the next 10 years," he said. "
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,914
  • Mar 29, 2015 8:11pm Mar 29, 2015 8:11pm
how low oil he go?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,915
  • Mar 29, 2015 8:24pm Mar 29, 2015 8:24pm
/ZB sliding in Asian Monday, TLT will be gapped down a buck @ NY open, I am looking for a hefty slide for the week, at least $4, so will look at weekly bear put verticals and selling call verticals to fund
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,916
  • Mar 29, 2015 11:36pm Mar 29, 2015 11:36pm
Compare USO Apr/Apr4 $16/$15/$13 puts BWB above to a $15 put calendar w/ same expiries. BWB profits between $14 and $16.25 at expiry with a MaxP of $540. Calendar b/e's are $13.45 and $16.85 with a MaxP of $240. Calendar eats only the $75 debit (on a 10-lot) while BWB costs $5 more and eats $1,000 margin. BWB max loss death slides to $1,079; calendar max loss is just the $75 initial debit.

Which is the better trade?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,917
  • Mar 29, 2015 11:48pm Mar 29, 2015 11:48pm
Quoting The Fool
Compare USO Apr/Apr4 $16/$15/$13 puts BWB above to a $15 put calendar w/ same expiries......Which is the better trade?
actually should compare a 5/10/5 BWB to the 10/10 calendar, in which case the BWB has similar maxP as the calendar, eats 1/2 the margin as before, but has the same b/e's and the same death slide. Only advantage is the BWB is a little cheaper ($45 vs $75) to put on. The death slide is the account breaker...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,918
  • Mar 29, 2015 11:54pm Mar 29, 2015 11:54pm
USD bullish, fiber to parity by May...?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,919
  • Mar 30, 2015 12:07am Mar 30, 2015 12:07am
if they will sell me a Jan $2 vertical spread for just comms I guess I'd have to take it...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #7,920
  • Mar 30, 2015 7:13am Mar 30, 2015 7:13am
I am taking my money out of the markets, put it in a waterproof can, bury it in the back yard. Of course, I'll find a way to fck that up, too - forget where I bury it, can get stolen by trolls or gophers, fml....
"If The Fool persists in his Folly he will become wise." - William Blake
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