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Let's Trade Options

  • #9,141
  • Jun 20, 2015 10:18am Jun 20, 2015 10:18am
Quoting StrayDog
{quote} I agree. I switched my short-term plays to scalping indices outright, with futures or CFDs. Majority of option plays will be selling stuff, usually spreads, and occasionally naked selling.
Hey SDog. Whatever you are trading, you have to get your mindset together. Patience and consistency are the challenges for me. I came into daytrading as a scalper, so I kind of have the urge for that with options - the excitement of quick profits. It's not "wrong" per se - it just does not work as well as setting up longer trades that pay to decay. I have been moving towards cutting out ALL the weekly scalps, earnings plays, etc. I want to get my "occurrences" up, but they can all be boring trades with a mechanical beginning and end. I still give in to boredom and put on dumb trades like the UVXY and FXE weekly trades above. Trading should not be a form of entertainment - it should be boring but manageable and profitable work, like harvesting grapes. Reach out, cut a bunch of grapes, put it in the basket, do it again....

I am sick of the "excitement" of fundies, too. I hate hearing about the Central Banks of the world and the never-ending Greek drama. I hate having to mind all that noise to plan my trades. Maybe I don't have to? Maybe that's just a habit, too? - one I could get rid of? How often do you hear the tt gurus talking about fundies? Perhaps "mechanical" traders learn that they don't even need to pay attention to fundies, by and large...?

Anyway, I have gotten to the point with options trading where I can see what works and what does not and I need to streamline what I do, forge myself into an efficient trading machine. Cut out what does not work, make better what does work.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,142
  • Jun 20, 2015 10:32am Jun 20, 2015 10:32am
Quoting ZebraSquirl
Gonna keep my powder dry going into next week ... . The only thing I did today was put on a July 31 DIA IC for 1.13 and an July 31 FXE IC for 1.09; my GLD didn't fill, so I missed the magic carpet ride from 113 to 115+; will wait on GLD to drift back lower (111-12) before considering another entry there ... . My SPY short call verts aren't looking happy right now, but plenty of time to be right yet (between 29 and 43 days). They're all good as long as price stays below 214 ... . I'll be pissed if these f'in nobbers push SPY past that. In an ideal...
Hey ZebraSquirl. Thanks for posting in the thread. You seem to have come a long way in a relatively short time with options trading. I hope you are seeing good profits. I always read your posts & I know often I don't respond to them. Nothing personal - I just have been spread very thin timewise and that is typical for me in the nicer months of the year.

I have been going into cash, too, would like to see Greece drama put to rest, expect a can kick in the coming week. I only have a few SPY credit spreads running, out to Jul. My fear has been the heavy drop that might come with big headlines - a Grexit, default, etc....will feel better about putting more trades on when things are clearer to me.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,143
  • Jun 20, 2015 10:52am Jun 20, 2015 10:52am
Quoting The Fool
Anyway, I have gotten to the point with options trading where I can see what works for me and what does not and I need to streamline what I do, forge myself into an efficient trading machine. Cut out what does not work, make better what does work.
Something else I may as well air out: and this is not emotional at all. I get tired of coming here and talking about my trades. I just get bored with it. Do you think people who are picking grapes all day talk about grapes? Do they go home at night and blog about grape picking? Of course not. Just cut the grapes, fill up the basket, take the basket to the truck, go back to your row, keep picking. Just be patient, find your trade setups, enter your trades, be patient some more, exit your trades mechanically, put the money in the bank. Keep doing it & watch the money pile up. The bigger your account, the more patient you can afford to be.

So, maybe I will post less or not at all. Idk. Thanks anyway to all who have contributed to this thread. Special thanks to StrayDog who has helped turn on a few light bulbs in my brain. I wish you all the best, buddy.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,144
  • Jun 20, 2015 11:19am Jun 20, 2015 11:19am
Quoting The Fool
I get tired of coming here and talking about my trades. I just get bored with it. ....... Just be patient, find your trade setups, enter your trades, be patient some more, exit your trades mechanically, put the money in the bank.
I will make a game of it, a challenge: I won't post much about my trades until I can show a 10-trade win streak. If I can do 10, then I can do 20...etc etc. Anybody wants to compete with me, feel free . It might take me 2-3 months to pile up a 10-win streak, at the rate I am trading these days....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,145
  • Jun 20, 2015 2:39pm Jun 20, 2015 2:39pm
Quoting The Fool
I hate hearing about the Central Banks of the world and the never-ending Greek drama.
I know, right? but....but....could you really get in a NBG 1-2 week calendar for credit or near $0? Check out the iv differences between the front (week) and back options - over 100% difference for just 2 weeks of time...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,146
  • Jun 20, 2015 2:57pm Jun 20, 2015 2:57pm
a Jul/Aug $2 calendar would have a wide profit zone, but be aware the b/e's would come in towards $2 if NBG rallies and those inflated iv's crash. Even so, cheap calendars are a reasonable risk....sometimes. A can kick rally for NBG is a decent bet.
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,147
  • Jun 21, 2015 7:26am Jun 21, 2015 7:26am
Black Monday....?

http://finance.yahoo.com/news/final-...093000080.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,148
  • Jun 21, 2015 4:37pm Jun 21, 2015 4:37pm
Quoting The Fool
... Anyway, I have gotten to the point with options trading where I can see what works and what does not and I need to streamline what I do, forge myself into an efficient trading machine. Cut out what does not work, make better what does work.
Yes... it takes some time to see what works and what not.An important step, IMO. Than you have to put yourself to repetitive mode, and just do those bread & butter trades all over again. It is about constantly making money, not gambling... it takes patience and discipline. Last week I did some scalps, for example... and I waited all day for the right setup. That is why this game is hard. First you spent a bunch of time to learn a part of it, than you learn what works and what not... and if you didn't lost everything in the process, than you have a chance. Use every technical and fundamental skil you have, do not rely on POP from the platform alone, because that is 'just' Black-Scholes model, and it doesn't know if the U/L is on support, or resistance, does it have some binary event soon... or anything about that. When you see an opportunity - take it. Trade small, trade when opportunity presents itself. Do not chase trades, do not trade low POP trades if you are not absolutely sure about them. That is what I am thinking about trading.
Hope is dangerous in this game.
  • #9,149
  • Jun 21, 2015 7:35pm Jun 21, 2015 7:35pm
Quoting The Fool
Finally, ...finally, ..after months of waiting, ...now, as rosy fingers of Dawn creep up into the eastern sky, we hear of a miraculous feat of European solidarity: yes, the bankers have given Greece another chance. More time. More money. Europe now strides boldly ahead, leading humanity into a golden future where bankers never lose money and stock market rallies never end. Be long, friends....
sure, what else?....futures are pointing to a $1+ gap up for SPY Monday open....with Greece can kick a done deal and the Yellen Fed cooing in the punch garden, I have to beware short calls. On the Jul SPY IC below I will roll legs up and out with little delay if the Greek deal is real.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,150
  • Jun 21, 2015 7:58pm Jun 21, 2015 7:58pm
wti has been range-bound for weeks, might break out on further USD weakness and Summer demand (could be a dicey "might" in face of supply glut?) - USO IVR has fallen and calendars are cheap - shown is a Jul/Jul5 $22 calls, a 20-lot for $220 nets $540 max
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,151
  • Jun 21, 2015 8:56pm Jun 21, 2015 8:56pm
Quoting The Fool
{quote} Hey SDog. Whatever you are trading, you have to get your mindset together. Patience and consistency are the challenges for me. I came into daytrading as a scalper, so I kind of have the urge for that with options - the excitement of quick profits. It's not "wrong" per se - it just does not work as well as setting up longer trades that pay to decay. I have been moving towards cutting out ALL the weekly scalps, earnings plays, etc. I want to get my "occurrences" up, but they can all be boring trades with a mechanical beginning and end. I still...
You're absolutely right ... . Personally, I don't want trading options to be "exciting" either. Forex and day trading underlyings was "exciting" in a way I didn't enjoy (frenetic, nerve-wracking, frustrating, yada yada). This has probably been the hardest adjustment for me ... . You put on the trade, and then you wait ... . If you're putting on trades 20-45 days out, you're waiting 2-5 weeks at times ... . The quick shot earnings plays are great, but they can blow up in your face ... .

Just for kicks, I hopped into a chat room on an old account at Trading View just to see what people were talking about with equities and indices; it's all harmonics, Gartley, trendlines, ichimoku ... . The noise around those methodologies is deafening (which is why I understand why Bob doesn't want to see charts most of the time ... extra noise ... . But frankly, I gotta see where price has been ... which should take, at most, a 30 second glance and, in most cases, doesn't require extra indicators, lines, and shit to junk it up).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,152
  • Jun 21, 2015 9:17pm Jun 21, 2015 9:17pm
Quoting The Fool
{quote} sure, what else?....futures are pointing to a $1+ gap up for SPY Monday open....with Greece can kick a done deal and the Yellen Fed cooing in the punch garden, I have to beware short calls. On the Jul SPY IC below I will roll legs up and out with little delay if the Greek deal is real. {image}
I agree on the short calls ... .

With SPY/IWM/DIA, I think I'm going to just throw on the IC's from the get-go ... . I know there's an advantage to legging in, but it's better to have the protection in place from the get go (in my mind), rather than dicking around with determining what price the opposing wing should go for, etc. You can always roll if you got in at a shitty price. My last couple of SPY short call verts are a case-in-point; I decided to put the short call verts on first and then try to put on the short put verts ... . There was some bullish movement last week that the short put verts could have taken advantage of, but I didn't have them in place and didn't want to put them in place after the movement occurred ... . Naturally, I might get another shot at putting them on if there is a dip some where but I'll probs just leave the short call verts I've got out there alone and not make that same mistake again ... . In all likelihood, they'll be taken out by a dip, since I've got them set up to close if they hit 50% profit ... .

Naturally, I would like to just strangle everything (since strangles are slightly easier to manage throughout the cycle), but strangles eat up margin that I might want to keep free for a vol pop or other event ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,153
  • Jun 21, 2015 9:20pm Jun 21, 2015 9:20pm
Quoting ptoftangency
Hello, New to the forum. What brokers would you recommend for options trading? Thanks.
Heyyy ... . Nothing beats the Dough/ThinkorSwim (TOS) platforms (TD Ameritrade products) for helping you visualize good set-ups ... . The TDA commissions, eh, not so great ... .

I recall StrayDog mentioning IB (Interactive Brokers) as an alternative ... . Better pricing structure, probs ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,154
  • Jun 21, 2015 9:27pm Jun 21, 2015 9:27pm
Quoting The Fool
{quote} I will make a game of it, a challenge: I won't post much about my trades until I can show a 10-trade win streak. If I can do 10, then I can do 20...etc etc. Anybody wants to compete with me, feel free . It might take me 2-3 months to pile up a 10-win streak, at the rate I am trading these days....
Shiyat ... . Would probs have to ditch Earnings Plays to even have a shot at 10 ... . (Which is probably telling me something; I should stop fucking around with earnings plays ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,155
  • Jun 21, 2015 10:13pm Jun 21, 2015 10:13pm
Quoting ZebraSquirl
{quote} Shiyat ... . Would probs have to ditch Earnings Plays to even have a shot at 10 ... . (Which is probably telling me something; I should stop fucking around with earnings plays ... ).
One of the things I'm doing tomorrow or Tuesday is adding a SPY/IWM/DIA IC 45 DTE (whichever is higher in terms of IVR) ... . Short call will be at bounds of expected move; short put skewed to at least 83% POP ... . Longs 3 strikes out from those ... . Still considering whether to place the short put strike such that it is the same approximate price as the short call strike as opposed to at 1 SD such that a dip could take out the short call vert side and a bounce will take out the short put vert side (if I set it up to take profit if the wing hits 50% max profit, as opposed to the whole IC reaching 50% max profit ... ).

Trying to get mechanical/systematic with SPY/DIA/IWM ... .

The second is to strangle TLT -- 113.5/124 DTE ... . The IVR's at 51, and I can put this on for a 1.44 credit ... . I considered doing the same in TBT, but I've got a 26 DTE strangle on that already ... .

The only other thing I really have to keep an eye on this week is a MON strangle that I put on way too early in light of earnings ... . I think that what is going to happen there is that price is going to breach the short put side of my 110/116 strangle; earnings have not been good for companies who export due to dollar strength ... . In that case, I'll let the call side expire worthless (or take it off for .05; no TDA commission for closing positions at .05 or less) roll the put side out for a credit, and resurrect the short call side later at any appropriate price ... .

Want to wind down the trades I've got in products/underlyings other than SPY/DIA/IWM and focus primarily on those going forward ... . Simpler is better and less time-consuming ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,156
  • Jun 21, 2015 10:14pm Jun 21, 2015 10:14pm
Quoting ZebraSquirl
{quote} Shiyat ... . Would probs have to ditch Earnings Plays to even have a shot at 10 ... . (Which is probably telling me something; I should stop fucking around with earnings plays ... ).
10 streak on the bread and butter IC type stuff is doable....of course, I have gotten used to the sideways market. One of these days we will get a break that trends strongly up or down, then it will be time to adapt & change and maybe I might do that without losing too much....or even foresee the change and take advantage of it...idk, first time for everything I guess...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,157
  • Jun 21, 2015 10:18pm Jun 21, 2015 10:18pm
Quoting ZebraSquirl
{quote} One of the things I'm doing tomorrow or Tuesday is adding a SPY/IWM/DIA IC 45 DTE (whichever is higher in terms of IVR) ...
I'm still legging in generally, so I will be rolling IC's I am in if we get good movement. I fully expect a relief rally on a Greece can kick and I will perchance entertain long scalps with that move, but mainly will look for it to exhaust, which might take a while - I will not be at all surprised to see new ath's across all 3 major US indices within the next week or 2...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,158
  • Jun 21, 2015 10:21pm Jun 21, 2015 10:21pm
Quoting ZebraSquirl
{quote} (if I set it up to take profit if the wing hits 50% max profit, as opposed to the whole IC reaching 50% max profit ... ).
Seem to recall some TT folks saying to take the whole IC off as a package ... . That would be nice to do every time, but am not sure if that's the way to go ... . The alternative would be roll the wing up (puts)/down (calls) as the situation dictates, just as I would for a straight-ass strangle ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,159
  • Jun 21, 2015 10:24pm Jun 21, 2015 10:24pm
Quoting ZebraSquirl
I understand why Bob doesn't want to see charts most of the time ... extra noise ... . But frankly, I gotta see where price has been ... which should take, at most, a 30 second glance and, in most cases, doesn't require extra indicators, lines, and shit to junk it up).
I don't spend much time on charts and often make trades without looking at them, just looking at the greeks in the chains....but I also like to have a visual representation of the u/l moves and check on the charts a few minutes a day, anyway....since I am trying to sell puts/calls into strength (ie, legging into IC's) - I am looking for support/resistance zones, trying to anticipate consolidation or turns....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,160
  • Jun 21, 2015 10:28pm Jun 21, 2015 10:28pm
Quoting ZebraSquirl
{quote} Seem to recall some TT folks saying to take the whole IC off as a package ... . That would be nice to do every time, but am not sure if that's the way to go ... . The alternative would be roll the wing up (puts)/down (calls) as the situation dictates, just as I would for a straight-ass strangle ... .
it would be very nice to scratch up to portfolio margin size and just sell naked strangles....spreads are fine if that's all we can do but they're also a pain in the butt, too....

...and the strangles are what you end up with by playing each side of the fence, fully Karen ST style - if you're just gonna play the far ends of the sigma curve, that's the place to be.
"If The Fool persists in his Folly he will become wise." - William Blake
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