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Let's Trade Options

  • #9,881
  • Aug 6, 2015 3:10pm Aug 6, 2015 3:10pm
Quoting ZebraSquirl
{quote} This is just one day ... . The next could be a total cluster ... .
But I don't want to jinx things, so I will also say that tomorrow could be a repeat of today, please and thank you.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,882
  • Aug 6, 2015 3:12pm Aug 6, 2015 3:12pm
Quoting The Fool
{quote} RISKS 14C TO MAKE $2.90 on a perfect expiry....the slices are the b/e's at the quarter end, I'm really fishing for a VIX pop after a Sept Fed hike...any kind of pop above $21 after Sept expiry will make good money {image}
21! 21! 21! ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,883
  • Aug 6, 2015 3:19pm Aug 6, 2015 3:19pm
This biyatch has rolling down to an artform; 5.33 total credit for a trade that went awry -- sick:

Attached Image


The key: when rolling, adjust strikes each time to ensure the collection of a credit without adding to the position ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,884
  • Aug 6, 2015 3:36pm Aug 6, 2015 3:36pm
Quoting ZebraSquirl
{quote} But I don't want to jinx things, so I will also say that tomorrow could be a repeat of today, please and thank you.
You took risk off today, no? I thought you said you closed some positions.
Usual advice in such a situation - i.e. having made very good money on a Thursday - would be to take the Friday off. Given it's also NFPs it's even more dangerous. Trouble is we get that hit when we win and we want moar.....
I have no clue what I'm talking about.
  • #9,885
  • Aug 6, 2015 3:42pm Aug 6, 2015 3:42pm
OK, 6 scenarios for tomorrow:

  1. NFPs sub 200K, equities hate it but change their mind and like it
  2. NFPs sub 200K, equities like it but change their mind and hate it
  3. NFPs in-line, equities hate it but change their mind and like it
  4. NFPs in-line, equities like it but change their mind and hate it
  5. NFPs 240K+, equities hate it but change their mind and like it
  6. NFPs 240K+, equities like it but change their mind and hate it

And those scenarios ignore others e.g. equities start weak but end up flat on the day, or start strong and end up flat, etc.
My guess for a laff (and talking my book) is equities will end up flat. But god only knows what will happen.

Shows why this trading lark is damn tough, no matter which way you slice it. Even if you knew the figures in advance you couldn't know how the market would respond.

I have no clue what I'm talking about.
  • #9,886
  • Aug 6, 2015 3:45pm Aug 6, 2015 3:45pm
Quoting ZebraSquirl
This biyatch has rolling down to an artform; 5.33 total credit for a trade that went awry -- sick: {image} The key: when rolling, adjust strikes each time to ensure the collection of a credit without adding to the position ... .
Absolutely.
But also key is sizing the trade appropriately in the first place (I'm looking at myself here) so that you can roll and carry the loss for as long as necessary.
Also it's good if you can sell in the other direction against your losing leg(s).
I have no clue what I'm talking about.
  • #9,887
  • Aug 6, 2015 4:00pm Aug 6, 2015 4:00pm
Quoting ZebraSquirl
* * * Still not liking my fees/commissions metrics; it seems like I'm being raped ... . Dunno if it's gonna help if I go larger with the number of contracts per setup ... . Need to read TDA's fine print ... . It looks like you pay a flat fee per trade (regardless of size) of $9.99 + a $.75 commission per contract unless you're doing a buyback for a nickel or less, in which case there's no commission... .
see the spreadsheet attached, you can modify it to fit your situation. But, easy to see how expensive trading options is if you are just trading 1-5 lots.....if you're a 1 lot trader, you are 22c in the hole on any trade, unless the cheap close applies.

You don't get down to 5c in the hole until you are trading >5 lots, then you have to get >40 lots to be at 2c in the hole or lower.

I "never" trade anything less than 5 lots, usually start at 10 lots and work up. A 40 lot trade is still huge for me, though....

There are cheaper places to trade options....
Attached File(s)
File Type: xlsx TDA-comms-effect.xlsx   12 KB | 376 downloads
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,888
  • Aug 6, 2015 4:10pm Aug 6, 2015 4:10pm
Quoting Boy Wonder
OK, 6 scenarios for tomorrow:
I can live with a binary deal: NFP beats & equities tank, or vice versa....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,889
  • Aug 6, 2015 5:00pm Aug 6, 2015 5:00pm
Quoting The Fool
{quote} I can live with a binary deal: NFP beats & equities tank, or vice versa....
Vice versa being NFP misses and equities tank?

My guess is NFP is going to miss and equities are going to open weak then rally. I think if they open near today's lows the chances of getting follow-through selling is low.
But mathematically my chances of being right on all 3 counts must be something like one in 27....or worse.
I have no clue what I'm talking about.
  • #9,890
  • Aug 6, 2015 5:05pm Aug 6, 2015 5:05pm
Quoting Boy Wonder
Vice versa being NFP misses and equities tank? My guess is NFP is going to miss and equities are going to open weak then rally.
No, that's versa vice-a, I meant NFP misses and equities rally. I am not in (m)any short term trades, so not that important to me now. Anyway, I think NFP beats and equities slide, but I am m/l positioned for that in spades, so it's all wishful thinking...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,891
  • Aug 6, 2015 5:22pm Aug 6, 2015 5:22pm
Quoting The Fool
{quote} No, that's versa vice-a, I meant NFP misses and equities rally. I am not in (m)any short term trades, so not that important to me now. Anyway, I think NFP beats and equities slide, but I am m/l positioned for that in spades, so it's all wishful thinking...
OK I see.

Wishfool thinking, story of my life....tomorrow gonna be no different methinks...
I have no clue what I'm talking about.
  • #9,892
  • Aug 6, 2015 6:52pm Aug 6, 2015 6:52pm
a rising tide lifts all boats - or versa vice-a, even the high flyers get sucked down the drain when it opens up. So, look for the recent ER spikers to fade?

How about CLX?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2015-08-06_clx.png Size: 137 KB
Click to Enlarge Name: 2015-08-06_clx2.png Size: 58 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,893
  • Edited 7:15pm Aug 6, 2015 7:04pm | Edited 7:15pm
or CCE?
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-08-06_cce.png Size: 52 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,894
  • Edited 8:07pm Aug 6, 2015 7:15pm | Edited 8:07pm
MO? FSLR?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,895
  • Aug 6, 2015 8:50pm Aug 6, 2015 8:50pm
Quoting Boy Wonder
{quote} You took risk off today, no? I thought you said you closed some positions. Usual advice in such a situation - i.e. having made very good money on a Thursday - would be to take the Friday off. Given it's also NFPs it's even more dangerous. Trouble is we get that hit when we win and we want moar.....
Truth be told, I don't always look at options setups from a risk perspective, except perhaps from the standpoint that if I go more aggressive on the call side (like putting the short call strike below the expected move or something like that), then I am increasing the risk that that strike will be breached prior to expiry and that I will have to roll that side out for duration and credit, something I'm not really fond of doing, but that I can naturally deal with, since it happens from time to time ... .

But since I try to put the index trades on in high volatility environments and keep my setups queued up so that there are index trades on with expiries 3 weeks out, 4 weeks out, 5 weeks out, etc. I hate to pass on a high vol environment setup since volatility can be incredibly fleeting ... . IVR in QQQ could be 84 at the end of today's trading, and 25 at the beginning of the next or even lower, depending on what all happens during the NY session.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,896
  • Aug 6, 2015 8:59pm Aug 6, 2015 8:59pm
Quoting The Fool
{quote} see the spreadsheet attached, you can modify it to fit your situation. But, easy to see how expensive trading options is if you are just trading 1-5 lots.....if you're a 1 lot trader, you are 22c in the hole on any trade, unless the cheap close applies. You don't get down to 5c in the hole until you are trading >5 lots, then you have to get >40 lots to be at 2c in the hole or lower. I "never" trade anything less than 5 lots, usually start at 10 lots and work up. A 40 lot trade is still huge for me, though.... There are cheaper places to...
Thank you kindly ... . Incredibly helpful ... .

My sense is that Robyn virtually always goes for the "expire worthless" or the nickel option ... . I hardly ever see her post where she takes something off for just 50% max profit unless she's tired of the damn thing and wants to redeploy or is satisified to get back to scratch after a trade has gone awry ... . Even in that case, she's paid the gouge to enter the trade ... .

So, 5 contracts or greater it is! 40 lots?! (Dreams on ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,897
  • Aug 6, 2015 9:15pm Aug 6, 2015 9:15pm
Quoting Boy Wonder
{quote} OK I see. Wishfool thinking, story of my life....tomorrow gonna be no different methinks...
I'm in agreement with TF here ... . I'm perfectly fine if the indices rally tomorrow, as long as we don't make ATH's between now and my expiries 20-45 days out. All of my SPY short call verticals, for example, have short strike prices 1-3 strikes above the YTD highs; as long as price doesn't break like, 214 between now and 45 days out, I'm good to go ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,898
  • Aug 6, 2015 9:20pm Aug 6, 2015 9:20pm
Quoting ZebraSquirl
{quote} I'm in agreement with TF here ... . I'm perfectly fine if the indices rally tomorrow, as long as we don't make ATH's between now and my expiries 20-45 days out. All of my SPY short call verticals, for example, have short strike prices 1-3 strikes above the YTD highs; as long as price doesn't break like, 214 between now and 45 days out, I'm good to go ... .
That being said, baby needs new shoes, so further dippage would be nice to end the week ... . Still got a couple IC's on in QQQ with short call strikes at 111 and 112, and we're right at the cusp of that here ... . Got some time before expiry, but price has been flopping back and forth across 111 ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #9,899
  • Aug 6, 2015 9:24pm Aug 6, 2015 9:24pm
Quoting ZebraSquirl
All of my SPY short call verticals, for example, have short strike prices 1-3 strikes above the YTD highs; as long as price doesn't break like, 214 between now and 45 days out, I'm good to go ... .
right there wit ya champ, $214 & $215 short legs - way out to the end of the quarter, but I don't see new ath's coming under the rate hike gun
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9,900
  • Aug 6, 2015 9:29pm Aug 6, 2015 9:29pm
Love the nobbers on TradingView and the various views on where SPY will go tomorrow ... . Crazy talk, most of it ... .

5 min. charts with crazy ass harmonics crap painted all over it ... . Whatever happened to simple support and resistance/price action?
Fireworks are fun ... as long as you don't blow your fingers off.
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