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Let's Trade Options

  • #9,261
  • Jun 27, 2015 2:54am Jun 27, 2015 2:54am
Quoting ffleo
{quote} It is like if I want to marry a princess it is less likely it is gonna happen
more likely I will marry an ordinary girl of my neighbor. A fat girl that is
ignore wackos and psychos, including myself. But I can't add myself to iggy
  • #9,262
  • Jun 27, 2015 2:54am Jun 27, 2015 2:54am
Quoting ffleo
{quote} It is like if I want to marry a princess it is less likely it is gonna happen
my daddy told me an ugly girl who is a good cook would be better....lol....he married a princess....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,263
  • Jun 27, 2015 2:57am Jun 27, 2015 2:57am
Quoting The Fool
{quote} my daddy told me an ugly girl who is a good cook would be better....lol....he married a princess....
were you raised up with delicious food?
ignore wackos and psychos, including myself. But I can't add myself to iggy
  • #9,264
  • Jun 27, 2015 2:58am Jun 27, 2015 2:58am
Quoting ffleo
{quote} were you raised up with delicious food?
well if my mom is a princess I do not mind eating bad meals as a child
ignore wackos and psychos, including myself. But I can't add myself to iggy
  • #9,265
  • Jun 27, 2015 3:00am Jun 27, 2015 3:00am
late. got to sleep
ignore wackos and psychos, including myself. But I can't add myself to iggy
  • #9,266
  • Jun 27, 2015 3:00am Jun 27, 2015 3:00am
anyway, options (and futures) spreading gets complicated because one can spread across strikes and/or across time. Generally speaking, the wider the spread, either across strikes or across time, then the wider the potential profit range for the trade, and the more one pays for the spread (if it's a short spread, the converse holds - wider and longer indicates deeper risk). Most options traders start out drooling over cheap but improbable trades. Such trades may represent small losses, but their aggregate is the "death by 1,000 cuts"....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,267
  • Jun 27, 2015 3:02am Jun 27, 2015 3:02am
Quoting ffleo
{quote} were you raised up with delicious food?
yep, but we had a cook....hey thanks for stopping by, ffleo. ciao....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,268
  • Jun 27, 2015 10:11am Jun 27, 2015 10:11am
Greece govt calls for a referendum on the bailout extension. The Eurozone ministers say there is no possibility of a deal. How will it end now? I bet we will see Greek capital controls implemented in the coming week. You'd have to think all this spells risk-off in the near term. But, a Grexit and resulting shock to the system means the Fed has room to push a ffr hike out further - another can kick.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,269
  • Jun 27, 2015 10:18am Jun 27, 2015 10:18am
Quoting The Fool
I bet we will see Greek capital controls implemented in the coming week.
http://finance.yahoo.com/news/greeks...102842381.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,270
  • Jun 27, 2015 11:08am Jun 27, 2015 11:08am
which is better - selling spreads or selling naked puts? (I think I have showed this vid before, but it bears repeating) ROC is usually about the same for short naked puts vs short put spreads (with the naked strike and the short strike of the spread the same) - but P/L usually several times higher for the naked puts. the tt takeaway: "if you are playing the income game, you have to go with the naked put."

Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,271
  • Jun 28, 2015 1:09am Jun 28, 2015 1:09am
Quoting The Fool
I bet we will see Greek capital controls implemented in the coming week.
Book it. Now how to trade it?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,272
  • Jun 28, 2015 12:50pm Jun 28, 2015 12:50pm
Quoting The Fool
which is better - selling spreads or selling naked puts? (I think I have showed this vid before, but it bears repeating) ROC is usually about the same for short naked puts vs short put spreads (with the naked strike and the short strike of the spread the same) - but P/L usually several times higher for the naked puts. the tt takeaway: "if you are playing the income game, you have to go with the naked put." https://www.youtube.com/watch?v=Jyfkbpz6ml4
The added advantage to naked is lower commissions and, frankly, simplicity. I can put on some nakeds, but I have to balance the margin that those occupy with the mechanical trades in SPY/DIA/IWM that I want to set up on a weekly basis if the vol and credit is there ... . Going forward, though, I'm likely to be making the vast amount of my trades within an IRA environment ... . I'll have to be fully clothed for that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,273
  • Jun 28, 2015 1:09pm Jun 28, 2015 1:09pm
Quoting The Fool
{quote} Book it. Now how to trade it?
The natural choice is FXE, but I've already got an IC on in that, so I've been looking at Eurozone Equities ETF's like HEDJ and EZU for a play. The vol is there; the liquidity is not ... .

I may want to consider another dip at the FXE well (IVR currently at 62; more would be nicer), close to 45 DTE; right now, have more than enough sidelined funds to strangle. Will have to have a gander at market open ... .

Where we're at with SPY/DIA/IWM, I'm not inclined to put on either short puts or calls. Just gotta wait ... .

China looks interesting (looks like their market is in the process of imploding), so I may revisit FXI with a bearish bias.

If we're risk off (pretty positive we are), treasuries (TBT/TLT) make some kinda sense. I've got strangles on in both of those, but like with FXE, I may want to take another dip at or near 45 DTE to take advantage of the increase in vol here ... . Should be an interesting week ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,274
  • Jun 28, 2015 3:13pm Jun 28, 2015 3:13pm
Quoting ZebraSquirl
The natural choice is FXE... .
I am thinking some super bear action on FXE, but will know more after early Monday futures trading....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,275
  • Jun 28, 2015 3:24pm Jun 28, 2015 3:24pm
Quoting ZebraSquirl
If we're risk off (pretty positive we are), treasuries (TBT/TLT) make some kinda ... .
real fear if broad-based will bounce treasuries & we should see TLT gap up Monday. If we get into some persistent risk-off we should see the old Sept rate hike being pushed out to 2016 and TLT should run back into the $120's
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,276
  • Jun 28, 2015 6:37pm Jun 28, 2015 6:37pm
/ES and /NQ futures tanking "a bit" on open ... . EURUSD taking a haircut ... .

But BTFDer's are already wading in on /ES, so it's hard to tell where things will be at between now and New York open.

Was worried about my SPY short call verts (the lowest of which was at a 214 strike) ... . Now, not so much ... . Hoping to be able to take those totally off the table tomorrow, as well as the short call sides of my SPY, DIA, and FXE IC's, assuming that the short call wings are nearing worthless ... . The short put side of those IC's is quite far out from current prices, so I'll just work them if needed closer to expiration ... .

That leaves the TBT and TLT strangles I've got on -- likely to be some gyration in those tomorrow. The call side of my TLT was around .25 on Friday; the put side of TBT, around .20. Don't think that's going to be the case come the open, so I'm going to have to hang onto those a bit longer ... . Wanted to ditch those as soon as possible, but the market isn't always cooperative; they're hogging some cap. That being said, it really doesn't matter right now, as I'm going to wait a few more days to redeploy any cap while the effects of Greece being on the precipice of default grind their way through the market ... .

A single tweet about Tsipras farting in one particular direction or the other could move the market back the other way ... . The market's such a drama queen ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,277
  • Jun 28, 2015 7:54pm Jun 28, 2015 7:54pm
Gave some thought about margin usage/leverage discussion above ... . For me, at least, I don't really look at margin utilization except in the most general way. Naturally, there are some underlyings that are so expensive that the amount of capital that it is going to take to get into one of those trades is a concern (NFLX, for example, as it's currently priced).

Rather, the focus is on the amount of buying power it will take to make a particular trade and the resulting reduction to your overall buying power that that trade will entail. Defined risk trades (verticals, calendars, IC's) generally take less "buying power" to put on while undefined risk trades (straddles, strangles, naked puts/calls) take more buying power (in theory, the risk of loss for undefined strategies is unlimited).

Since I don't have a sufficiently large enough pool of capital, I unfortunately have to put on a mix of both defined risk strategies and undefined risk strategies in order to keep skin in the game, keep cash reserves in wait to be able to strike when opportunities present themselves, or to put on my weekly mechanical, bread and butter index trades in SPY/DIA/IWM.

The only recommendations on TastyTrade/Dough are to (1) shoot for keeping 50% in cash pretty much at all times, not only to keep some powder dry for opportunities to present themselves while your currently open trades work themselves out, but to avoid possible black swan events; and (2) "keep things small." "Keeping things small" is a naturally a relative term, but most of the Dough trades I've seen involve a single contract, two tops ... . Gotta keep in mind that 1 contract represents 100 shares of the underlying ... . Doing a 5 contract trade of SLV is one thing (currently 15.10); 5 contracts of NFLX (currently 651), quite another, but I can see varying the contract size based on the price of the underlying; with certain U/L's, you just aren't going to get enough juice out of the trade unless you do that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,278
  • Edited 9:16pm Jun 28, 2015 9:05pm | Edited 9:16pm
Quoting ZebraSquirl
/ES and /NQ futures tanking "a bit" on open ... . EURUSD taking a haircut ... . But BTFDer's are already wading in on /ES,
we have been waiting for some bear strength to sell puts into, I will probably get some put credit spreads on Monday. Who knows what the endgame for the Greek drama will be? - but I will not be surprised to see Greece get a deal, maybe this week, maybe next week, idk.

If that happens, ok, sell calls into the relief rally, which will probably be short-lived, and we're back to same old samo Fed rate hike drama. Anyway, I need to get some trades on. I have one block of Jul $216/$218 calls and those will come off in the dip tomorrow, I think I have a 5c buy close on them...

maybe I'm wrong though and we go black swan? I will probably get some cheap long puts on FXE or index etf's, might look at selling VXX or UVXY puts on a weekly gamble, could be a fun July...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,279
  • Jun 28, 2015 9:16pm Jun 28, 2015 9:16pm
Quoting The Fool
{quote} real fear if broad-based will bounce treasuries & we should see TLT gap up Monday. If we get into some persistent risk-off we should see the old Sept rate hike being pushed out to 2016 and TLT should run back into the $120's
/ZB up $3+ in early trade, I won't be surprised to see TLT back into $120's this week. Selling TLT put spreads just below last weeks lows could be a thing
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,280
  • Jun 28, 2015 9:48pm Jun 28, 2015 9:48pm
Quoting ZebraSquirl
The only recommendations on TastyTrade/Dough are to (1) shoot for keeping 50% in cash pretty much at all times, not only to keep some powder dry for opportunities to present themselves while your currently open trades work themselves out, but to avoid possible black swan events; and (2) "keep things small." "Keeping things small" is a naturally a relative term, but most of the Dough trades I've seen involve a single contract, two tops ....
20% cash is my redline. I hold to that pretty well. Trade sizing is something else. But I usually have risk limits in mind. Which are prolly too big. On defined risk trades, I will put a max of 10% of total equity at risk. Usually it is about 5%. I know that I will be adjusting losing trades, but sometimes I don't do that so well, in which case, anyway, I had an original limited risk I could live with. I am usually doing 4-5 lot trades at a minimum, up to 20 lot trades on the high side. Occasionally I will do larger trades, 50 lots maybe. I can relate to the "trade small" thing, but I'm trying to make some money here....
"If The Fool persists in his Folly he will become wise." - William Blake
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