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Let's Trade Options

  • #9,201
  • Jun 24, 2015 7:00pm Jun 24, 2015 7:00pm
Quoting The Fool
the VXX weeklies, ....... maybe try a cheap strangle
a $1+ move by Friday close would do it, either way....VIX has been so dead, though, idk....
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-06-24_vxx2.png Size: 69 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,202
  • Jun 25, 2015 8:59am Jun 25, 2015 8:59am
Quoting The Fool
{quote} a $1+ move by Friday close would do it, either way....VIX has been so dead, though, idk....
I bought the Jun4 VXX $16.5 puts for $0.02 - US equities want to rally, just need to get that tweet, the Greek can kicked
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,203
  • Jun 25, 2015 9:09am Jun 25, 2015 9:09am
Attached Image


hey guys sharing with you what I have found to be on the high IV. They are at least more than 50% IV some are at 150% ( is this even sustainable ?! )

1 dumb question, I have few position expiring today. TOS sent me an option expiration email. If i let the bear put spread ( FXE very little profit ) and IC ( SPX with profit ) expired without me closing it, what could possibly happen ?

I am thinking to let them expire and send them an email to not exercise it. I am sore at the commission I have been paying... LOL
  • #9,204
  • Jun 25, 2015 9:13am Jun 25, 2015 9:13am
Hi The Fool, after searching a while, finally found an option thread. Glad to be here. For starters, which broker are you using for you options trade?

I am searching for a good brokers allowing spx futures & options and the index itself.
  • #9,205
  • Jun 25, 2015 9:19am Jun 25, 2015 9:19am
Nickah, as long as your short options are not itm (or not even close to being itm) you can consider letting them expire. I sometimes let profitable spreads expire, but usually I get out with profit before expiry.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,206
  • Jun 25, 2015 9:25am Jun 25, 2015 9:25am
Quoting tradingwapro
Hi The Fool, after searching a while, finally found an option thread. Glad to be here. For starters, which broker are you using for you options trade? I am searching for a good brokers allowing spx futures & options and the index itself.
seems like I get about a pm a week and a post in the thread once a month or more asking about brokers. I am not responding to these anymore - consider them phishing attempts . Depending on my mood, the sender/poster goes in the igg bin. There are lots of options brokers & if you are in a foreign country, I don't really know which ones are available to you. If you are really interested in trading options, a few minutes on google will answer your questions about brokers.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,207
  • Jun 25, 2015 9:35am Jun 25, 2015 9:35am
Quoting The Fool
{quote} I bought the Jun4 VXX $16.5 puts for $0.02 - US equities want to rally, just need to get that tweet, the Greek can kicked
a new low for VXX would be <$16.85, need a big rally through Friday to get down there, rally into the quarterly close, Greek can kick, I could see it. The $18 calls are $0.05/$0.06....not biting, but that will give it up in a steep selloff
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,208
  • Jun 25, 2015 9:38am Jun 25, 2015 9:38am
something to share on

1. to hold till maturity
2. to take 25% of max profit
3. to take 50% of max profit
4. to take 75% of max profit

Attached Image


Attached Image


Attached Image


( courtesy of tastytrade video )

They have forgotten to include the commission we need to pay, in this case if we were to just take 25% it will be interesting to see whats the result if they factor in the hefty commission we pay .. other than this it does make sense to me .
  • #9,209
  • Jun 25, 2015 9:39am Jun 25, 2015 9:39am
Quoting The Fool
{quote} seems like I get about a pm a week and a post in the thread once a month or more asking about brokers. I am not responding to these anymore - consider them phishing attempts . Depending on my mood, the sender/poster goes in the igg bin. There are lots of options brokers & if you are in a foreign country, I don't really know which ones are available to you. If you are really interested in trading options, a few minutes on google will answer your questions about brokers.
phishing attempts? lol.. apologies over my amusement. I have no intention to phish your info. My question to you is genuine. Is it not a good idea to ask old bird what they use? afterall, they already have the experience to know what is good and what is not. much better & efficient than sieving the thru the trash on google.

My country of domicile is Singapore. There are no local brokers who offer SPX options. What i am familiar with is Etrade, for my US stock need. But they do not have a good platform at all for options.

Bottomline is that this is not meant to be a broker discussion. I am only asking what you are using and which u think is good. But i understand your security concerns. period.
  • #9,210
  • Jun 25, 2015 9:45am Jun 25, 2015 9:45am
Quoting nickah
other than this it does make sense to me .
yep, it makes sense to get out with profit early, even if it is like only 1/2 of the max profit you might have gotten out of the spread, then you can move on to the next profitable trade with that freed up margin...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,211
  • Jun 25, 2015 11:02am Jun 25, 2015 11:02am
Quoting tradingwapro
... My country of domicile is Singapore. There are no local brokers who offer SPX options. What i am familiar with is Etrade, for my US stock need. But they do not have a good platform at all for options....
The best equity / futures option trading platform iz ToS (Think-or-Swim) by TD Ameritrade. If you don't mind commissions...
I think that you can trade via Dough also, they rout orders to ToS, if ToS is complicated for you.
If you just want lower comms, and platform for executing orders, not just for option trading but for everything, Interactive Brokers is the place to be.
Hope is dangerous in this game.
  • #9,212
  • Jun 25, 2015 11:23am Jun 25, 2015 11:23am
looking forward to news that may negatively affect the US markets certainly in the short term that could come from GREECE tomorrow, my assumption is purely based on what I'm seeing in the major indices and VIX chart plus monitoring the USD cash index for clues. Its just the way its setting up at the moment.

I have DOW 17982 AND a close beneath 18030 today will reaffirm for a single day put action tomorrow and into next week on DIA for me, could even be quite a big down move so I'm position some long vertical put spread closer to the end of market

VIX needs a close above 13.60
  • #9,213
  • Jun 25, 2015 11:33am Jun 25, 2015 11:33am
Quoting Cecil Gee
looking forward to news that may negatively affect the US markets certainly in the short term that could come from GREECE tomorrow, my assumption is purely based on what I'm seeing in the major indices and VIX chart plus monitoring the USD cash index for clues. Its just the way its setting up at the moment. ...
Hi CG. IMO, I just can't see new ATH's any time soon. I am using any positive "G" tweets to short DAX and US indices... Yeah, just give me more rips to sell.
EVEN if everything resolves in a A-OK manner, that possible relief rally will be sold. Looking pas few months, every single new ATH was sold. /NQ stopped yesterday at previous ATH.

What the f... would be a reason for making ATH's in the:
a) low volume environment
b) indecisive, news sensitive market
c) choppy sideways trading for weeks

Since there is no fear in the market, I am remaining Bearish/Neutral stance.
Hope is dangerous in this game.
  • #9,214
  • Jun 25, 2015 11:42am Jun 25, 2015 11:42am
Quoting StrayDog
{quote} Hi CG. IMO, I just can't see new ATH's any time soon. I am using any positive "G" tweets to short DAX and US indices... Yeah, just give me more rips to sell. EVEN if everything resolves in a A-OK manner, that possible relief rally will be sold. Looking pas few months, every single new ATH was sold. /NQ stopped yesterday at previous ATH. What the f... would be a reason for making ATH's in the: a) low volume environment b) indecisive, news sensitive market c) choppy sideways trading for weeks Since there is no fear in the market, I am remaining...
add in Earning season to all that, there will be a few big caps who could see the strong dollar negatively affect there growth potential , ie exporters
  • #9,215
  • Jun 25, 2015 1:30pm Jun 25, 2015 1:30pm
SPY going red, Greece talks last chance over the weekend, relief rally on hold til next week - or not at all. I need to get some trades on, been waiting so long have almost forgot about the markets....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,216
  • Jun 25, 2015 5:12pm Jun 25, 2015 5:12pm
Quoting nickah
something to share on 1. to hold till maturity 2. to take 25% of max profit 3. to take 50% of max profit 4. to take 75% of max profit {image} {image} {image} ( courtesy of tastytrade video ) They have forgotten to include the commission we need to pay, in this case if we were to just take 25% it will be interesting to see whats the result if they factor in the hefty commission we pay .. other than this it does make sense to me .
The TastyTrade folks are big on getting out at 50% max profit. There are a couple of reasons for this: (1) it allows you to redeploy the capital; (2) their research has shown that the benefit of going for max profit is limited and in fact may be less successful than getting out at 50% max. Naturally, there is the commission issue. No one likes paying commissions. To me, I kind of play it by ear. If I can get out early in the cycle for 50% max profit, I'm going to do that ... . But if I've got a fairly short period of time to expiration, I may wait and close the legs out individually for .05 or less. There is no commission at TDA when you close out for .05 or less. Truth be told, I rarely wait that long ... . Don't want to get burned on last minute movement ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,217
  • Jun 25, 2015 5:57pm Jun 25, 2015 5:57pm
Quoting nickah
{image} hey guys sharing with you what I have found to be on the high IV. They are at least more than 50% IV some are at 150% ( is this even sustainable ?! ) 1 dumb question, I have few position expiring today. TOS sent me an option expiration email. If i let the bear put spread ( FXE very little profit ) and IC ( SPX with profit ) expired without me closing it, what could possibly happen ? I am thinking to let them expire and send them an email to not exercise it. I am sore at the commission I have been paying... LOL
There are actually two forms of volatility you should be looking at: IV and IVR (IV Rank). Dough's explanation of it: https://www.dough.com/blog/implied-volatility-rank The folks at TastyTrade and Dough tend to trump IVR over IV, so they pump looking at IVR to screen trades rather than IV. IV does come into play in evaluating trades, but usually only in the context of looking at things like IV contraction or "crush" (by looking at and comparing IV over different expirations, for example).

Open Dough, click on "Grid," set the drop down menu to "Notable Stocks" and then sort underlyings by "Impl Vol Rank" ... . For selling premium, the higher the IVR, the better, but the general rule of thumb, I think, is an IVR of 70+ for individual equities, 35+ for ETF's ... . I would note that not all of the "Notable Stocks" represent worthwhile trading opportunities or are problematic for other reasons (e.g., nearing earnings announcements, illiquid options (bid/ask >.05), recent news that has dramatically increased IV). Quite frankly, I don't see much that interests me there right now ... . Most of the high IVR stuff right now is earnings play material ... .

I consider earnings plays a particular subset of selling premium; when I do them (something I'm moving away from), I set them up a fairly short period of time (3-4 days) out from the announcement ... . Only one is on my radar for the next two weeks -- PEP (Pepsi) (14 days) (IVR 15). It isn't attractive right now do its current IVR, but we may get an IV pop in either closer to the announcement ... .

Ordinarily when nothing interests me on the high IVR end of things, I look for low IVR plays instead (calendars, vert spreads, stuff on which I have a somewhat firm directional bias) ... . Bit of a trickier business, the low IVR trades, as they generally require a closer examination of what's going on with the underlying ... . I tend to prefer the SPDR's and the commodity proxies (USO, GLD, SLV) for low IVR trades, as long as I have a firm directional bias or if I feel fairly comfortable with the underlying's staying within a particular range ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,218
  • Jun 25, 2015 6:27pm Jun 25, 2015 6:27pm
Slight uptick in SPY IVR today (yesterday 10; today 28) led me to set up a 195/199/215.5/218.5 Aug 7 IC, asking for 1.03. Tried to fashion it delta neutral as much as possible ... .

My TBT and TLT strangles aren't crushing down worth shit ... . My last strangles don't want to give up the ghost ... . That's okay: 22 DTE ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,219
  • Jun 25, 2015 6:29pm Jun 25, 2015 6:29pm
Quoting The Fool
{quote} I bought the Jun4 VXX $16.5 puts for $0.02 - US equities want to rally, just need to get that tweet, the Greek can kicked
wanted to add the $17.50 calls for 6-7c to make a strangle here, but was watching VXX nudge up & decided to hold off - those calls closed around $0.21 today
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,220
  • Jun 25, 2015 6:32pm Jun 25, 2015 6:32pm
Quoting ZebraSquirl
Slight uptick in SPY IVR today (yesterday 10; today 28) led me to set up a 195/199/215.5/218.5 Aug 7 IC, asking for 1.03..
yeah, I had my heart set on some upside strength, may not get it. I am m/l riding a trade called "no trade" & I may as well ride it till it's done, that be when the Greece can is kicked or blows up, either one....
"If The Fool persists in his Folly he will become wise." - William Blake
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