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Let's Trade Options

  • #8,021
  • Apr 4, 2015 11:03am Apr 4, 2015 11:03am
Quoting The Fool
The problems I have had recently have been mostly a result of making directional trades in a non-directional market. These have all been defined-risk trades put on for low debit. So losses have been relatively small, but they have been many lately & they add up. So, in hindsight, some of them look like over-trading. Some were too low-probability. There have been some good trades, too, so although I was down for March, it wasn't that much of a bleed. More later....
Well described, pretty much the same with me.

I would like to see VIX rise on Monday, to pump up option premiums a bit, and then to sell some OTM call spreads on SPY, IWM or QQQ... Also would like to place more combos like I have on IWM (debit bear put spread financed with bull put spread, all done for credit and thus no upside risk... I have that with Apr options, looking to place more of the same trade with May options)
Hope is dangerous in this game.
  • #8,022
  • Apr 4, 2015 11:15am Apr 4, 2015 11:15am
Quoting StrayDog
"How will we know when we have reached the "bad news is bad news" point of no return? Answer: When market-friendly comments from the Fed fail to stem market declines. "
Watch for UST's and US indices to correlate inversely and reliably so. "Credit anticipates: Equity confirms."

Watch for yields to rise in the high yield credit sector.

It's a real uphill battle, looking for risk-off sentiment that lasts for more than a few days - with all the liquidity being pumped into the markets by the CB's. I'm sad to say it, but I'd have to bet on another BTFD "opportunity" setting up. I could be wrong, though. We'll see what's what as Q1 earnings play out...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,023
  • Apr 4, 2015 11:35am Apr 4, 2015 11:35am
Quoting The Fool
Watch for yields to rise in the high yield credit sector....
Don't hold your breath, though....with the markets now close to unanimous in believing a ffr hike is off the table in June, we should see better flows into high yield and UST's. Look at HYG, puts to calls there for Thurs was 24:1, and the large majority of those puts are short.

HYG a good opp for a super bull trade - sell puts or put spreads to fund long calls outright or long call debit spreads. The May/May4 $92 calls calendar has a $0 mid, I will try to fill it for $0.05.... ...I love cheap calendars.
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,024
  • Apr 4, 2015 11:39am Apr 4, 2015 11:39am
will likely revise the above HYG trade, I'd bet we see $92-$93 in the next 2-3 weeks.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,025
  • Apr 4, 2015 7:19pm Apr 4, 2015 7:19pm
Quoting The Fool
I love cheap calendars.
Cheap is good, but there's a downside, too...I bought this Apr/Apr4 BAC $17 call calendar for $0.03.....BAC lt ~$0.50 below the downside b/e...I doubt it will get up there....it will probably fall on NFP effect. I guess I might buy back the short APR $17's and sell APR or Apr4 lower calls - I might sell Apr4 $16 or $16.5 calls to make a short vertical..but BAC earnings are 4/15, maybe the best thing will be to hang in & maybe catch a break...or take the $0.03 loss if it comes....

....so, yeah, you can make cheap calendars with cheap options, but then, when you find you are in need of adjustment, cheap options are not worth the trouble...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,026
  • Apr 4, 2015 7:48pm Apr 4, 2015 7:48pm
I bought this Jun SAN $8/$9 call vertical for $0.13 a few weeks ago... SAN has come up a buck, trade is in small profit. SAN looks like it is poised to break out above thru the 100sma, hopeful on this one for a 4x or 5x return...
Attached Image(s) (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,027
  • Apr 5, 2015 9:02am Apr 5, 2015 9:02am
be careful long crude

http://www.bloomberg.com/news/articl...-s-?cmpid=yhoo
"State-owned Saudi Arabian Oil Co. narrowed the discount for its Arab Light grade to Asia to the least since December, setting the crude at a discount of 60 cents a barrel to the regional benchmark, the company said in an e-mailed statement. The May pricing is 30 cents higher than in April. The company known as Saudi Aramco also increased the pricing of the other four grades it ships to Asia.

The producer cut pricing for May sales of Light crude to the U.S. by 10 cents a barrel and to Northwest Europe by 20 cents, according to the statement."
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,028
  • Apr 5, 2015 9:06am Apr 5, 2015 9:06am
Quoting The Fool
will likely revise the above HYG trade, I'd bet we see $92-$93 in the next 2-3 weeks.
better
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,029
  • Edited 10:19am Apr 5, 2015 9:43am | Edited 10:19am
"Junk Bonds Are The Investment Opportunity Of A Lifetime, Just Not Yet"
http://www.forbes.com/sites/greatspe...rtner=yahootix

lol...classic..Opportunity of a lifetime! But not yet....

Well, when? ...uh, not in your lifetime...

Best chance of a junk crash (in the short term) is the possible further legs down for wti, then maybe we see some default risk in US oil sector. Otherwise, tight money, and who knows when that might come...?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,030
  • Apr 5, 2015 5:55pm Apr 5, 2015 5:55pm
what's gonna happen to fiber if Greece can't pay it's debts coming due in the next week or so?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,031
  • Apr 5, 2015 9:30pm Apr 5, 2015 9:30pm
http://blogs.wsj.com/moneybeat/2015/...o-raise-rates/

20 years of /ZB, mofo going parabolic, but volume has crashed over the last few months. I have not been right on timing, lots of company there - but when the bottom falls out, gonna be a long way down....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,032
  • Apr 6, 2015 7:05am Apr 6, 2015 7:05am
"Dudley reversal"...
Hope is dangerous in this game.
  • #8,033
  • Apr 6, 2015 7:16am Apr 6, 2015 7:16am
Quoting StrayDog
"Dudley reversal"...
...and the markets are starved for expensive oil, love to see it jump
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,034
  • Apr 6, 2015 7:27am Apr 6, 2015 7:27am
Sold a couple of SPY May 212/214 Call Spreads, for $0.60 CR.
... one minute later --> better prices...
Hope is dangerous in this game.
  • #8,035
  • Apr 6, 2015 7:37am Apr 6, 2015 7:37am
Quoting StrayDog
Sold a couple of SPY May 212/214 Call Spreads, for $0.60 CR. ... one minute later --> better prices...
I been shopping SPY credit spreads, but looking at Apr, will wait/see where the rebound falters
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,036
  • Apr 6, 2015 8:00am Apr 6, 2015 8:00am
Quoting StrayDog
"Dudley reversal"...
yep they tore into traders who held overnight futures short, me being one of them, if DOW fails to take out 17889 and slose above that then I'm buying puts and selling DOW futures after market closes
  • #8,037
  • Apr 6, 2015 8:10am Apr 6, 2015 8:10am
I am trying to fill USO $21 calls May/May4 calendars for $0.04-$0.05
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,038
  • Apr 6, 2015 8:45am Apr 6, 2015 8:45am
Quoting The Fool
I am trying to fill USO $21 calls May/May4 calendars for $0.04-$0.05
Hey TF, I am looking at a strike lower calendar... Could be filled at $0.07 debit.

Attached Image (click to enlarge)
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Hope is dangerous in this game.
  • #8,039
  • Apr 6, 2015 9:55am Apr 6, 2015 9:55am
Quoting StrayDog
{quote} Hey TF, I am looking at a strike lower calendar... Could be filled at $0.07 debit. {image}
Nope... It couldn't... Obviously one has to leg in these.
Hope is dangerous in this game.
  • #8,040
  • Apr 6, 2015 10:29am Apr 6, 2015 10:29am
Quoting StrayDog
{quote} Nope... It couldn't... Obviously one has to leg in these.
I might get in the $21 for $0.05.....I usually try to put these out near the limit of where I think they might go, so if they overshoot that - I still can make something.

On the time spreads, the smaller the actual time spread (just a week in the USO call calendars above) the more accurate you have to be with your strike selection. If you want better POP, spread further, both on time and in the space between the strikes...
"If The Fool persists in his Folly he will become wise." - William Blake
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