Let's Trade Options

UVXY is very dicey, any way you slice it, but I will be looking for another spike n slump next week. I am in nothing new, just sitting on the SPY bull puts - Jul $202/$200, want to get the theta curve grinding down on those next week. I almost tried to match them with Jul $213/$215 calls this morning, cued up for $0.31 on those, then SPY started to slide....oh well....

Have a good long weekend, bud.

I look at GREK, prolly too late....

http://www.forexfactory.com/showthre...71#post8362571

interesting, no options yet though....

http://www.forbes.com/sites/jennifer...rtner=yahootix

Don't fight the PBOC?

http://www.marctomarket.com/2015/07/...eek-ahead.html
" Last weekend, the PBOC lowered its key one-year lending and deposit rates and cut reserve requirements. When this did not arrest the equity market's headlong plunge, officials hinted at reducing the stamp tax, easier margin rules and allowing pension funds to buy shares. Whatever upticks materialized were quickly sold into, and equity markets finished at new lows since the June 12. Since then the Shanghai Composite has fallen nearly 30%.

This weekend, Chinese officials seemed more desperate. They took several measures designed to stop equities from falling. New IPOs were suspended. This included 10 for the Shanghai and 18 from Shenzhen. Mutual fund companies (25) declared that they would "actively" buy stocks and hold them for at least a year. Chinese brokerage firms (21) pledged to invest 15% of their net assets (no less than CNY120 bln or ~$19.3 bln) to buy ETFs of high capitalization stocks as early as Monday.

China's sovereign wealth fund will also reportedly buy shares. Corporations are reportedly being encourage to buy back their own shares, as well. Regulators moved to market more difficult to short the futures index and are looking into claims of market manipulation by foreign investors. Officials indicated that there contrary to reports, there were no sizeable sales by foreign banks.

The pressures to steady a plunging stock market are clearly not limited to parliamentary democracies as some have argued. Moreover, not all stock market plunges are equal. Even with the dramatic drop, the Shanghai market is still up nearly 80% over the past twelve months, and the Shenzhen Composite is up almost 90%. Over this period, the economy has slowed, and industrial profits have fallen.

The Shanghai Composite has nearly retraced 12-month gains by almost 50%. That retracement would have brought the Composite to 3594. The low before the weekend was 3629. The 61.8% retracement comes in near 3220. Technical indicators do not suggest the signal an oversold market, though last week's close was just below the lower Bollinger Band, set 2 standard deviations from the 20-day moving average (~3723).

Chinese officials might have been better served to have waited for the market to signal that the selling momentum had exhausted itself, or that the market was extremely oversold before organizing such a price support operation. Margin use has been falling for nine consecutive sessions, and still stands near the equivalent of $208 bln. This should be wholly embraced not fought. Valuations by almost any definition remain stretched, even if less than a three weeks ago. Moreover, any near-term success may by Pyrrhic victory. Going forward, investors have to assume overhead supply. The Zhou put, like the Greenspan/Bernanke/Yellen put, creates a certain expectation among investors, which is not helpful in the long-run, and facilitates moral hazard. "

With all the balls I'm juggling around Greece, neglected to give FXI any attention (looked at ASHR several times due to 100 IVR; the spread still sucks).

FXI: I can eek out .53 for a 49/53 short call spread, Aug 21 expiration (POP 78%; BE 49.53). With the POP the way it is (I don't necessarily trust it; Dough seems to be glitchy in off-market hours), I could probably go more aggressive, but that would put the short call below the 1 SD ... . The way the PBOC is attempting to intervene in the market, anything could happen in the short term ... .

Alternative: Aug 21 short 41.5/50 strangle for 1.02 (POP 71%; BE's 40.48/51.02). Naturally, the thing I don't want to have to do is chase deep-in-the-money short puts for several months by selling short calls to get back to scratch with a strangle that was only nominally worth it from the get-go. Also, there is the buying power issue.

I looked at IC setup's, but can barely get 1.00 out of them (a 39/42/48/51 bearishly skewed IC Aug 21 expiration; BE's at 41.03/48.97) will yield a .97 credit, but the POP is 57%.

If I do anything, it'll be the short call spread with multiple contracts to make it worthwhile ... .

idk, I was thinking cheap calendar - the Jul 5/Aug $52 calls for 4c - if otm calls stay that cheap I might multiply & spread em out a few bucks

EUR/USD gapped down at the beginning of this week's trading, but is in the process of doing a lather, rinse, repeat of last week's open, gapping down, attempting to close the gap, and then actually overshooting the closing of the gap ... . I view this week as different; the hopes of a resolution to the Greek situation have dwindled substantially, but we're back into the manic cycle ... . Negotiations back on, hope of resolution, hopes dashed, yada yada.

It would be ironic if the market priced in Fed reluctance to raise rates in September due to the uncertainty surrounding the Greek situation, sending the U.S. equities markets higher ... , ... although it's likely to be just BTFD'ers who are unwilling to give up the ghost ... .

Me personally, I'm waiting for a bounce to add short call spreads in the indices ... . Amazingly, it's looking like the edge of the expected move over the next 47 days (Aug 21 expiry) in SPY is at the 215 strike. A 215/219 Aug 21 short call spread goes for a .77 credit (POP 77%; BE 215.77), a 214/218 Aug 21 for .97 (my guess is we won't see 214 soon). I may want to put on one of those given the high IVR, the contraction of which may outweigh a limited bounce ... . Will have to see after NY open or on Tuesday after markets digest Greek vote ... .

The other obvious plays in this market are a bearish TLT play and/or a bullish TBT play (which moves inversely of TLT). I've currently got strangles on in both of those, but I may want to add other expirations more toward 45 DTE to take advantage of the increased volatility (TLT is showing an 6-Mo. Dough IVR of 85).

Currently, an Aug 21 TLT 109/123 short strangle (the I way I prefer to play TLT and TBT) will get you a 1.32 credit (73% POP; BE's at 107.68 and 124.32).

I'd have to be totally bored out of my skull making my bread and butter index trades (I'm not; this is the highest IV we've had in the indices in a bit) to look at earnings plays, but I did anyways. The only plays in the next few days of interest to me are WBA (Walgreens) and PEP (Pepsi). WBA's 6-Month Dough IVR is currently 71; PEP's, 39. Unless some vol magically appears in PEP over the next few days, it's IVR just isn't enough to fart around with if you're a premium seller via a strangle or an IC; the other option would be an iron condored straddle (88.5/94.5/94.5/100; July 17 expiration) with a POP of 43% for a 2.30 credit which would require that price stay within its expected move (BE's 92.2 and 96.8) (um, ick). Dough won't bring up WBA's option chain for me for some reason, which is probably a sign from the trading gods ... .

The quality of earnings plays dramatically increases the week after next with a whole slew of heavy hitters -- NFLX, C, EBAY, GOOG ... . The list goes on ... . Naturally, should Dough/TastyTrade show me a good earnings play trade, I might reconsider ... , but unlikely ... .

'Nuther interesting week, no doubt ... .

I actually might bite on that set-up ... . Just need to get my head wrapped around managing calendars effectively; there isn't much on Dough ... . I got the general gist of them; frankly, just need to throw one on and manage it ... . The max loss for the setup is ridiculously low ... .

Going with FXI July 31/Aug 14 50 call cal spread for .15 db (multiple contracts) ... . See if we get a fill tomorrow ... .

above I meant Jul5/Aug1 $52 calls - a 1-week spread - for 4c, and that might not be there tomorrow at that debit, we'll see. Anyway, the vid below runs thru the P/L til expiry. If you throw something on for 4c and get a chance to come off for 20c+, hey, do it, but as you can see, the P/L really blows up in the last few days, and you may turn 4c into 50c with a perfect finish. So, yeah, calendars are a gamble, that's why I don't mind shooting cheap ones....

http://screencast.com/t/Cul6RAGHMc

if you widen out the time spread - below is 3-weeks vs the 1-week spread above, then the P/L b/e's move further out and the maxP moves up. It gives you a little more room to manage, too, as you may let the front week expire and still have enough time to do something else with the remaining leg. So, you get what you pay for with time spreads....

I have been waiting for one more relief rally in the US indices, but more n more I am thinking there will be a long wait until recent highs are seen again. I am holding Jul SPY $202/$200 bull put spreads and I am not feeling too comfy with those atm...waiting to see what Europe will do with /ES. Surprised at how dead gold is, although I don't trade it much....

[quote=The Fool;8364764]So, yeah, calendars are a gamble, that's why I don't mind shooting cheap ones.... [/quote]

but hitting one just right is kinda like this:

http://www.si.com/planet-futbol/2015...s-cantor-video

taking what I can get on $202 short, will bail on that spread this week if SPY keeps running up, SPY I see touching green, still waiting for big fat Greece to get out of my way, I'd expect the FOMC minutes to inject some punch directly into the spine of US equities, come WEd, maybe SPY can run up, I'd love to see $209+ and look for call spread selling opps.

FXI long, idk...

Crude is on very important level right now, at $54...



I can't imagine it won't bounce up from here.

Hm... thinking about selling some far OTM September put (Aug 21 expiry).

Addon:
Sold /CL Sep 44 put for $0.25 CR ($250 credit).

Addon 2 (two hours later):
/CL is breaking down hard. Timing error on this one. Possible supports at 52 and 50.

I need to piddle with them more and then just put one on ... . I think the best way to use them is to catch an evolving trend where the front month is "right enough" to expire worthless and the back month can take advantage of a continuing trend ... . Timing, naturally, is everything ... . Missed out on the FXI move; would probably have to had something set up last week to take advantage of it ... didn't. Right now, don't know what to make of it; it's at support and may bounce (or may continue with its plunge), but I've got other fish to fry ... .

Putting on my weekly mechanical SPY/DIA/IWM IC, as IVR for all of these remains above 35. DIA appears to have the IVR rank right now, so I'm opting for the Aug 21 161/165/183/187 IC for a 1.06 credit (POP 61%; BE's at 163.94 and 184.06). The POP is less than I'd usually like, but this is due to the fact that the call wing is at the edge of the expected range of movement, rather than at the 1 SD (don't expect to see 184 again soon).

Kind of in a waiting mode while TBT/TLT strangles w/July 17 expiration "ripen", after which I will reestablish one or both of those with a later expiration, assuming the vol sticks around ... . I need to get the strangles off to kind of more accurately gauge the sizing of my IC's assuming that sufficient vol is there and I put on one a week in either SPY/DIA/IWM ... .

Strangles, while the simplest way to go in terms of trade management, are BP hogs ... .

The only other trade I'm considering putting on is an FXE 100/104/111/115 IC, Aug 21 expiry for 1.10 (POP 62%; BE's 102.90/112.10) ... .

Pretty boring, but boring is good ... .

I was hoping for more of a bounce out of GLD on Eurodrama ... . I've got a short put vert on, but it hasn't gone very far ... .

gold looks dead

Iran deal imminent (sure) = more supply coming, oil glut amplified, most of my long dated USO spreads have lost money...I thought we would be looking at wti $65 now, at least, under withering summer demand,,,butt I was wrong