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Let's Trade Options

  • #8,621
  • May 10, 2015 1:19pm May 10, 2015 1:19pm
Quoting ZebraSquirl
{quote} I prefer a lack of excitement ... . Ideally, if you're not losing sleep over what you're doing, you're probably doing it right ... .
why I have basically lost interest in the ER trades. I'm sure those can be done in a "boring" way, too - especially if you have enough equity to short naked way out on the risk curve - but that ain't me.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,622
  • May 10, 2015 1:20pm May 10, 2015 1:20pm
Quoting ZebraSquirl
{quote} Light bulb just went on ... . She's basically strangling, but she doesn't set up her trades as strangles ... . She enters one short call/short put at a time, the net effect of which is probably a strangle ... . Best as I understand it, she enters a single high prob short put or short call at 1 SD (for example, in SPY) and then waits for those individual trades to play out ... . Claims to go flat every month-end, with nary a draw down ... .
Was watching some TastyTrade videos last night, and the Soz pointed out an interesting stat regarding the cost of doing, for example, a naked put versus a strangle; their studies show that the cost of putting on a strangle versus just the naked short put is negligible ... . But to me, as a practical matter, Karen's method may be a bit cleaner in terms of getting fills; if you're using her method, your focus will be just on getting a fill of the short call/short put, not both legs at the same time ... or getting one leg of the strangle filled and then the other ... . She just focuses on getting an optimum price, standing alone, and not as part of a given strangle set-up ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #8,623
  • May 10, 2015 1:23pm May 10, 2015 1:23pm
Quoting The Fool
{quote} Details are a little sparse - I'd love to sit in the trading room with her team and see how they balance the two sides. As pipple always said, market can't be two places at once....
... Really vague on the details beyond the instruments they focus on, the %-age of return, and the fact that they focus on "delta." I assume they're going for delta neutral for all outstanding trades, but she really doesn't say that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #8,624
  • May 10, 2015 1:24pm May 10, 2015 1:24pm
Quoting ZebraSquirl
{quote} ... Really vague on the details beyond the instruments they focus on, the %-age of return, and the fact that they focus on "delta." I assume they're going for delta neutral for all outstanding trades, but she really doesn't say that ... .
Seems the easiest way to go "delta neutral," though, is, well, to just set up strangles ... . Lol.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #8,625
  • May 10, 2015 1:37pm May 10, 2015 1:37pm
I imagine they are always looking for delta neutral across their entire book in each instrument. I'm glad we had a look back at KTST though, ZS - made me look at doing short verticals in SPX instead of SPY - SPX is certainly the better bet - will explain later, gotta go to the gym.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,626
  • May 10, 2015 1:37pm May 10, 2015 1:37pm
Quoting The Fool
{quote} why I have basically lost interest in the ER trades. I'm sure those can be done in a "boring" way, too - especially if you have enough equity to short naked way out on the risk curve - but that ain't me.
And if TT is any indication, the vast majority of f'd up trades that they have to work out of involve earnings plays ... . I'd rather have to work out of a minimum of problematic plays that tie up buying power and require greater attention than expiries 30-50 days out
Fireworks are fun ... as long as you don't blow your fingers off.
  • #8,627
  • May 11, 2015 5:17am May 11, 2015 5:17am
so interesting area in currencies now USD/Y just sitting at 119.85 level if it can't move up from here then we have a real potential ton see a start of a bear trend starting only in my opinion which could result in US equities being at it tops plus we have been in a 40 week cycle of a bull move and normally a correction resumes
  • #8,628
  • May 11, 2015 5:27am May 11, 2015 5:27am
Quoting Cecil Gee
so interesting area in currencies now USD/Y just sitting at 119.85 level if it can't move up from here then we have a real potential ton see a start of a bear trend starting only in my opinion which could result in US equities being at it tops plus we have been in a 40 week cycle of a bull move and normally a correction resumes
40 month plus closer to 50
  • #8,629
  • May 11, 2015 6:53am May 11, 2015 6:53am
Quoting Cecil Gee
{quote} 40 month plus closer to 50
Interestin' ... . Thought we were going to see a mid-term election correction ... . Nope. Thought we were going to see an end-of-year correction. Nope. Can't BTFD without an FD ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #8,630
  • May 11, 2015 7:58am May 11, 2015 7:58am
BTFD became BTFATH, but that dog don't hunt either, and we are stuck in a range for US equities, SnP wound up for another breakout...or breakdown....the shit can't go sideways forever.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,631
  • May 11, 2015 11:05am May 11, 2015 11:05am
Quoting ZebraSquirl
{quote} Light bulb just went on ... . She's basically strangling, but she doesn't set up her trades as strangles ... . She enters one short call/short put at a time, the net effect of which is probably a strangle ... . Best as I understand it, she enters a single high prob short put or short call at 1 SD (for example, in SPY) and then waits for those individual trades to play out ... . Claims to go flat every month-end, with nary a draw down ... .

Exactly... she enters calls and puts as separate trades, and handle them separately. But, by having both sides, she don't have increased margin requirements. On SPX you have normal volatility skew, i.e. equidistant puts are always more expensive than calls. So, she enter calls and puts, but puts are far, far, far, away... There are 4 videos with her, I recommend them all.
Hope is dangerous in this game.
  • #8,632
  • May 11, 2015 11:18am May 11, 2015 11:18am
G'Day, SDog - what do you think the minimum (non portfolio margin) equity one might need to trade Karen Super Trader style?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,633
  • May 11, 2015 11:34am May 11, 2015 11:34am
Quoting The Fool
G'Day, SDog - what do you think the minimum (non portfolio margin) equity one might need to trade Karen Super Trader style?
Idk, TF... Because /ES futures options ties A LOT of margin on Reg-T account... and SPX options are larger...

SPY --> /ES ---> SPX... that is gradation in options size / margin req and accounts. I looked to sell some /ES options, but margin requirements are too high for me, meaning like $4-5k for a single option, which I don't find appealing.

So, I think, without PM account, it is really hard to do naked selling on SPX options.
Hope is dangerous in this game.
  • #8,634
  • May 11, 2015 11:36am May 11, 2015 11:36am
yep, it's a rich man's game...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,635
  • May 11, 2015 12:28pm May 11, 2015 12:28pm
Quoting The Fool
yep, it's a rich man's game...
...ugghh, time to make the donuts, guess I should look at some new short SPY verticals, I hate Mondays....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,636
  • May 11, 2015 12:31pm May 11, 2015 12:31pm
Quoting The Fool
{quote} ...ugghh, time to make the donuts, guess I should look at some new short SPY verticals, I hate Mondays....
Usually a drag... narrow range or some other shit.
Hope is dangerous in this game.
  • #8,637
  • May 11, 2015 1:51pm May 11, 2015 1:51pm
Quoting The Fool
guess I should look at some new short SPY verticals....
Was waiting for a dip below $211, now find myself locked out of the wireless connection where I sneak onto my trading laptop....fuckin' Mondays...a May5 $215/$217 SPY calls gets $0.25?....meh....some good downside flow could juice up the calls a little better over the next few days....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,638
  • May 11, 2015 1:56pm May 11, 2015 1:56pm
check TLT, sub $120....sell in May go away for bonds, no doubt
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,639
  • May 11, 2015 1:58pm May 11, 2015 1:58pm
Quoting The Fool
check TLT, sub $120....sell in May go away for bonds, no doubt
May puts a gold mine, and me left holding my pecker....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #8,640
  • May 11, 2015 2:28pm May 11, 2015 2:28pm
I have done rode the knife's edge this far SDog, I might as well hang on one more day. But in nothing new....maybe tomorrow I will feel bolder...
"If The Fool persists in his Folly he will become wise." - William Blake
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