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Let's Trade Options

  • #9,801
  • Aug 3, 2015 7:21pm Aug 3, 2015 7:21pm
Quoting StrayDog
{quote} Hi BW. I trade /ES and /NQ, but it is always a good thing to watch other US indices as well. On last down move we had /NQ breaching to new ATH, but others didn't follow. Prior to that, Russel2000 was making new ATH, but others didn't follow. To me, that represent just rotation from one sector or group of stocks to another. This bull market is quite old, and IMO, this is exactly what happens in that last phase - that only a handful of stocks drag entire market up or sideways. It can last for months, years...
Similarly, I trade SPY, IWM, QQQ, and DIA. On a macro scale, similar trajectories, but short-term, some small differences that reflect the components of each (like the QQQ break of ATH's on NASDAQ component earnings reports, most likely).

I generally kind of trade them in rotation myself, opting for trades in the index with the highest IVR/IV at the time a weekly becomes available that is 45 DTE or less ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,802
  • Edited 8:37pm Aug 3, 2015 8:23pm | Edited 8:37pm
Quoting The Fool
trying to fill a VXX call fly, Oct $20/23/26 for $0.12, also have a VXX Dec call vert, DEc $21/22 for $0.12 ordered, no fills....
no fills....keep shooting
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,803
  • Edited 1:12am Aug 4, 2015 12:57am | Edited 1:12am
will this stuff ever bottom? ER's 8/5....wait for the iv crush for long call trades....winter's coming
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,804
  • Aug 4, 2015 1:22am Aug 4, 2015 1:22am
hmmm, have I seen this leveraged etf chart pattern before?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,805
  • Aug 4, 2015 5:20am Aug 4, 2015 5:20am
Quoting ZebraSquirl
{quote} Similarly, I trade SPY, IWM, QQQ, and DIA. On a macro scale, similar trajectories, but short-term, some small differences that reflect the components of each (like the QQQ break of ATH's on NASDAQ component earnings reports, most likely). I generally kind of trade them in rotation myself, opting for trades in the index with the highest IVR/IV at the time a weekly becomes available that is 45 DTE or less ... .
I traded IWM before... IMO, you have a good approach regarding credit plays - sell whatever has the highest IVR. I like that. On futures options, only the /ES have good liquidity, I don't like the others.
Hope is dangerous in this game.
  • #9,806
  • Aug 4, 2015 5:24am Aug 4, 2015 5:24am
Quoting The Fool
... I think we could get some accelerated flows out of equities into the teeth of the mighty Sept 25 bps hike and the end of life as we know it. ...
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Arghhh..... that fu###ng rate hike...
Hope is dangerous in this game.
  • #9,807
  • Aug 4, 2015 9:14am Aug 4, 2015 9:14am
Quoting Boy Wonder
{quote} For my sins I am long SI at 14.75 and short a Sept ATM (14.75) call (expiry 26/8). I got 37.6 for the call. I am the world's worst trader always picking bottoms and getting burnt so take it for what it is, probably another really bad bottom-fishing call from yours truly albeit if I am wrong I will just sell an ATM call against it month after month for as long as I need to. Not very clever perhaps because if SI drops violently it doesn't work very well but c'est la vie. I don't like the idea of selling more than one call against it because...
Forgive me Father for I have sinned. Closed the call for 26.4. World's worst trader, totally unable to trade a plan. Naked now on the SI future, probably gonna get a shellacking....urghhh
I have no clue what I'm talking about.
  • #9,808
  • Aug 4, 2015 9:21am Aug 4, 2015 9:21am
AAPL down 3%, and yet /NQ is not down.
Don't tell me that NFLX holds entire index? I mean a stock that is 1/13 of the AAPL Mcap?
Hope is dangerous in this game.
  • #9,809
  • Aug 4, 2015 9:21am Aug 4, 2015 9:21am
Quoting StrayDog
{quote} {image} Arghhh..... that fu###ng rate hike...
Oh lol . Thank you sir for making my life longer.
"I know one thing, that I know nothing." Sokrates
  • #9,810
  • Aug 4, 2015 10:15am Aug 4, 2015 10:15am
Quoting Tom_D_Trader
{quote} Oh lol . Thank you sir for making my life longer.
Anytime amigo.

Didn't have the nerves for this shaking PA on /NQ... so I took 10 points on it, due to a bad entry (average price in the middle of the fu***ng zig-zag). Target was 15 points, and it was achieved about 2 minutes after I hit the trigger to close. Mofo. I was sure that the index will fall on AAPL, so i didn't follow my own rules.

Attached Image (click to enlarge)
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I like to look for scalping entries on a 15m chart. Analysis is always top to bottom, meaning W, D, 240m, 60m, 30m, 15m...
Hope is dangerous in this game.
  • #9,811
  • Aug 4, 2015 11:05am Aug 4, 2015 11:05am
Quoting The Fool
will this stuff ever bottom? ER's 8/5....wait for the iv crush for long call trades....winter's coming {image}
Ah, CHK, brings back memories from the last earnings announcement, when I decided to short strangle the thing ... . All I can say: beaucoup rolling, then eventually out, amazingly for scratch ... . Think my broker made out on that deal ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,812
  • Aug 4, 2015 11:19am Aug 4, 2015 11:19am
Quoting StrayDog
{quote} I traded IWM before... IMO, you have a good approach regarding credit plays - sell whatever has the highest IVR. I like that. On futures options, only the /ES have good liquidity, I don't like the others.
That being said, sometimes the strike prices in particular index ETF's blow ... . DIA and IWM seem to have a particular problem with this, particularly when a weekly first opens; there won't be strike prices at the 1 SD if you want to set them up there. But they're kind of my last stop on the mechanical trades; I prefer SPY first, QQQ second, although this week it seems that QQQ is where the volatility is at ... .

Unfortunately, this is a good and a bad thing ... . Trying to roll some overly aggressive short call wings of two IC's I set up with the short call strike prices at 111 and 112 that are 2-3 weeks out DTE ... . QQQ's flopping back and forth across that 111 strike ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,813
  • Aug 4, 2015 11:40am Aug 4, 2015 11:40am
For me, Tuesdays are clean up days, if there is any cleaning up to do ... and there usually is. I finally bit the bullet and rolled my GLD short put vert down (like, way down) out to December expiry, paying a hefty debit for the pleasure and am laddering short call verts against to attempt to reduce the loss incurred by the 7/20 precious metals dump ... .

TLT is starting to become a perennial pain in the ass. For the past couple of cycles, I've had to roll one side or the other; just when you think it's in a protracted bear trend, it flips and goes all bull breaching one side of your setup ... . I'm virtually in TLT constantly, but would like it to behave a little better ... .

I know that the TT Market Measures segment on rolling short verts recommends just waiting (since your max loss is defined) until there is little or no time left, at which time you roll for credit if your assumption remains intact toward the end of expiration and that, in all likelihood, the trade just needs additional time to "work out." Frankly, I'm not into that. To me, you should take the opportunity to roll when you can improve the position and get a credit for doing it, as opposed to waiting until it is virtually impossible to get a credit without adding risk to the trade (e.g., widening the spread) or having to finance the roll with some crazy, additional setup. With the GLD short put spread (the short put strike of which was at 110), I waited far too long to roll down and out ... . Shoulda, coulda, woulda ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,814
  • Aug 4, 2015 12:06pm Aug 4, 2015 12:06pm
Quoting The Fool
hmmm, have I seen this leveraged etf chart pattern before? {image}
Looked at nat gas instruments several times ... . Like crude, tends to drive me a little bit crazy ... . Both crude and NG should be cyclical, with prices elevating as winter approaches and demand increases for heating oil/natural gas; the more difficult the winter, the greater the price bump ... . But a whole variety of factors extrinsic to the weather have seeped into the oil and gas markets, throwing a whole wrench into the cyclical works -- OPEC, Iran, frakking, dollar strength, IMF revised global growth forecasts, yeesh ... . They don't make it easy ... .

I've been looking at sector SPDRs a bit as an alternative to screwing around with USO, UNG, ya da ya da and to focus on sectors that are topping or bottoming; the focus of this is to look for high volatility plays when the vol just isn't in the broader market. XLE (energy sector) and XOP (oil and gas exploration) have gotten the bejesus beaten out out of them (and are both 80+ IVR); XRT (retail sector) and XLF (financials) (50+ IVR) appear to be topping ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,815
  • Aug 4, 2015 12:14pm Aug 4, 2015 12:14pm
Quoting ZebraSquirl
{quote} Looked at nat gas instruments several times ... . Like crude, tends to drive me a little bit crazy ... . Both crude and NG should be cyclical, with prices elevating as winter approaches and demand increases for heating oil/natural gas; the more difficult the winter, the greater the price bump ... . But a whole variety of factors extrinsic to the weather have seeped into the oil and gas markets, throwing a whole wrench into the cyclical works -- OPEC, Iran, frakking, dollar strength, IMF revised global growth forecasts, yeesh ... . They don't...
Comparing XRT and XLF to a broader market index ETF like QQQ, though, it appears that if you're in an index ETF, you'd be basically playing the same trajectory:

Attached Image (click to enlarge)
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Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,816
  • Aug 4, 2015 12:21pm Aug 4, 2015 12:21pm
Quoting ZebraSquirl
... TLT is starting to become a perennial pain in the ass. For the past couple of cycles, I've had to roll one side or the other; just when you think it's in a protracted bear trend, it flips and goes all bull breaching one side of your setup ..
I hear that. I had some bearish spreads (bearish rates) on both TLT and TBT, was wrong about that, premise was wrong, being bond market would run rates up before the Fed, but the long bond rates may/may not fit that premise - Boy Wonder can tell ya all about that - and many believe rising ffr rates would flatten the curve and the long rates would actually not move much or even come down.....so, fml, I had calendars on for like 7c, 12c - when I'm wrong on something like that I usually just take the hit.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,817
  • Aug 4, 2015 12:25pm Aug 4, 2015 12:25pm
Quoting The Fool
{quote} no fills....keep shooting {image}
Liking that VXX play ... . UVXY fills starting to annoy ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,818
  • Aug 4, 2015 12:26pm Aug 4, 2015 12:26pm
Quoting ZebraSquirl
{quote} Looked at nat gas instruments several times ... . Like crude, tends to drive me a little bit crazy ... . Both crude and NG should be cyclical, with prices elevating as winter approaches and demand increases for heating oil/natural gas; the more difficult the winter, the greater the price bump ... . But a whole variety of factors extrinsic to the weather have seeped into the oil and gas markets, throwing a whole wrench into the cyclical works --
yes, it's complicated. many say we are in for longterm low natgas prices given the structural changes in the energy markets - but -- everything changes - and I am looking at that UNG spike last winter. We have the strongest el Ninyo ever coming at us, winter is just around the bend, super strong Nino means record snows for the eastern US, maybe we get another spike? For a few cents on a $0.50 far otm bull call vert out to Dec or Jan, maybe worth a shot....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,819
  • Aug 4, 2015 12:32pm Aug 4, 2015 12:32pm
Quoting The Fool
{quote} I hear that. I had some bearish spreads (bearish rates) on both TLT and TBT, was wrong about that, premise was wrong, being bond market would run rates up before the Fed, but the long bond rates may/may not fit that premise - Boy Wonder can tell ya all about that - and many believe rising ffr rates would flatten the curve and the long rates would actually not move much or even come down.....so, fml, I had calendars on for like 7c, 12c - when I'm wrong on something like that I usually just take the hit.
I'm cool with being in TLT fairly constantly, whether it's because of a roll or an entirely new set-up ... . In an ideal world, I'd never have to roll ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,820
  • Aug 4, 2015 12:39pm Aug 4, 2015 12:39pm
Quoting The Fool
{quote} yes, it's complicated. many say we are in for longterm low natgas prices given the structural changes in the energy markets - but -- everything changes - and I am looking at that UNG spike last winter. We have the strongest el Ninyo ever coming at us, winter is just around the bend, super strong Nino means record snows for the eastern US, maybe we get another spike? For a few cents on a $0.50 far otm bull call vert out to Dec or Jan, maybe worth a shot....
Looking at UNG bull call verts, Jan expiry that would accommodate a spike to 14+ ... . A 14/15 Jan expiry would go for .33 db; BE at 14.33 ... .
Fireworks are fun ... as long as you don't blow your fingers off.
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