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Let's Trade Options

  • #10,161
  • Aug 16, 2015 12:36am Aug 16, 2015 12:36am
Quoting The Fool
you wanted to spend about the same amount on a 2-week strangle, you'd have to widen to Aug4 $12.5/$15.5 - that would be 11c + comms but you'd get a little more time to run
If we got a quick reversal and USO jumped up $1.50 in a few days, a 2-week spread would give back some time value, too....on a 10-lot trade for ~13c net debit, anything over 25c net back would be quite acceptable
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,162
  • Aug 16, 2015 12:55am Aug 16, 2015 12:55am
I tried to find a good Dr. Evil "100 Billion Dollars!" clip on yotube, but no......

http://finance.yahoo.com/news/euro-m...080323057.html

Anyway, I am in a bunch of NBG Aug $1 calls for a nickel a piece, would like to see NBG jet to $1.15+ in the next few days....

GREK, sitting at $10, should move up to $12 pdq.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,163
  • Aug 16, 2015 2:27am Aug 16, 2015 2:27am
carnage in the Asian crosses
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,164
  • Aug 16, 2015 7:02am Aug 16, 2015 7:02am
Hi folks, I'm after a bit of advice/info on fx options.

I have savings in AUD (in Oz) but I live overseas, and I want to protect against further declines in AUD/USD, i.e. protect the value of my savings while I'm overseas.

I opened an OANDA account and took a short AUD/USD position, but the leverage and volatility kept me glued to my computer day and night (not appreciated by husband and toddler) and frazzled my nerves.

After some googling, it looks like maybe buying an option might be a better hedge for my savings. I won't have to watch it or pay interest on my position, my downside is limited and I don't have to put lots of margin in an account.

I found a platform where I can trade AUD/USD options (SaxoBankGO) and opened a demo account. Now I'm trying to make sense of it but I feel like I'm drowning in new ideas, information, jingo-ism, etc.

What sort of instrument should I be looking at is I want to hedge against AUD/USD dropping further in 2016? I'd take the longest time frame option that I can buy. I think I only want to buy a put option, rather than write a call, right? Because I want to limit my risk. What instrument should I be looking at? How does it all work? So much to take in! (I don't come from a trading background if you can't already tell, not stocks, not forex, etc.)

I guess buying a few puts and calls on a shorter time frame (in demo account) would be the best way to make sense of how it all works?

Any info, links, advice, direction, etc. on how to proceed would be greatly appreciated!

Cheers, Luce
  • #10,165
  • Aug 16, 2015 8:34am Aug 16, 2015 8:34am
can. kicked.
http://news.yahoo.com/eurogroup-cons...-business.html

expect fiber & US equities to rise this week.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,166
  • Aug 16, 2015 9:53am Aug 16, 2015 9:53am
Quoting The Fool
can. kicked. http://news.yahoo.com/eurogroup-cons...-business.html expect fiber & US equities to rise this week.
I don't share that view. I've been bullish on EURUSD for a while, but I've changed my mind this week. Maybe I'm flipping at the wrong time, maybe this is epic foolishness on my part, but it seems to me, based on my reading of the techs and understanding of the fundamentals, that the euro is now much more likely than not to retest its lows. It's had a few months of countertrend action, which has enabled it to go from 1.05 to 1.14 but I think this week's spike 1.12 is probably the ceiling from here. I'd be amazed if it can get back above 1.12 again. But this is markets, what we think is highly unlikely magically "happens" on almost a daily basis; it's an occupational hazard.

As for stawks, if you look at the weekly chart on SPX it seems to me there is a clear absence of strength. I think sellers are going to emerge on any push northwards. They couldn't push it over teh 200dma last week; I'm not sure why they would be able to do it this week.

I'm short EURUSD and I think it's one of the safest bets out there, the others being SPX to 2000 within weeks or a few months and TLT/ZB to anywhere north of here, albeit TLT/ZB have rallied strongly since they based a month or two ago so it's not as easy to be aggressive there.
Also probably not a safe bet but a reasonable one, I still think there is substantial downside in AAPL, and I'm back in long puts targetting maybe 10% off from here.

Good luck to all for the coming week. I hope everyone here had a good week last week. Mine was phenominally stressful but ended OK and as ever, I learnt more about trading and myself.
I have no clue what I'm talking about.
  • #10,167
  • Aug 16, 2015 12:35pm Aug 16, 2015 12:35pm
Quoting The Fool
can. kicked.
@BW, our views are confluent & only diverge for a week or two - especially on stocks I think there will be a last run up in August then a hard slide below the channel in Sept-Oct, on fiber I am less sure.....(beware Jackson Hole)
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,168
  • Aug 16, 2015 1:34pm Aug 16, 2015 1:34pm
Quoting The Fool
{quote} @BW, our views are confluent & only diverge for a week or two - especially on stocks I think there will be a last run up in August then a hard slide below the channel in Sept-Oct, on fiber I am less sure.....(beware Jackson Hole)
Ahead of the Fed on 17th Sept when they're just weeks away from hiking for the first time in 8 years or so? Seems unlikely to me but doesn't mean it can't happen.
I have no clue what I'm talking about.
  • #10,169
  • Aug 16, 2015 1:39pm Aug 16, 2015 1:39pm
we'll see. volume liable to dive for the last bit of August and volatility along with it, neither favor big moves either way, but I still would bet on the SnP floating up $212+ in the coming week or two, FOMC minutes be damned. Different story after Labor Day....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,170
  • Aug 16, 2015 1:43pm Aug 16, 2015 1:43pm
This is why I'm in the glorious long bond and expect to be for well, a long time:

In basic terms, ongoing slowdown in the U.S. (and global) economy is a function of six headwinds, including the end of the baby boom generation-linked demographic dividend; rising income and wealth inequality; factor price equalisation; lower net of cost returns to higher education; the impact of environmental regulations and taxes; and real economic debt overhangs across public and non-financial private sectors.

Gordon estimates that future growth in consumption per capita for the bottom 99 percent of the income distribution is likely to fall below 0.5 percent per annum over the period of some five decades.

...Absent ... highly disruptive policy reforms, we will find ourselves at the tail end of technological growth frontier, with low rates of return to technology and innovation and, as the result, permanently lower growth in the advanced economies.

http://trueeconomics.blogspot.ie/201...le-threat.html

I just hope when they next dump ZB I have lots of spare capital to gobble it up.
I have no clue what I'm talking about.
  • #10,171
  • Aug 16, 2015 1:44pm Aug 16, 2015 1:44pm
Quoting The Fool
we'll see. volume liable to dive for the last bit of August and volatility along with it, neither favor big moves either way, but I still would bet on the SnP floating up $212+ in the coming week or two, FOMC minutes be damned. Different story after Labor Day....
OK geezer, we'll see
I hope they do crank it up cos it'll be a hell of a sell IMO.
I have no clue what I'm talking about.
  • #10,172
  • Aug 16, 2015 1:47pm Aug 16, 2015 1:47pm
Quoting Boy Wonder
OK geezer, we'll see I hope they do crank it up cos it'll be a hell of a sell IMO.
sounds like a plan, lad
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,173
  • Aug 16, 2015 1:47pm Aug 16, 2015 1:47pm
SPX seasonality:
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I have no clue what I'm talking about.
  • #10,174
  • Aug 16, 2015 1:49pm Aug 16, 2015 1:49pm
the oil market has wild cards to play, will be watching wti moves in the coming days....big oil moves can swing the equity markets either way.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,175
  • Aug 16, 2015 1:51pm Aug 16, 2015 1:51pm
Yep, the futures options expire tomorrow.
I have no clue what I'm talking about.
  • #10,176
  • Aug 16, 2015 1:52pm Aug 16, 2015 1:52pm
Quoting Boy Wonder
SPX seasonality:
Sept/Oct all about the Fed....I have to bet they bump the ffr unless some major shtf in the data (or something more exogenous) in the next month.....I am already set up for ^VIX spike in that time frame, have been counting on a last gasp run up in equities to get short there.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10,177
  • Aug 16, 2015 2:10pm Aug 16, 2015 2:10pm
VIX/U5 expires Sept 16; the day before the Fed meeting (or rather day 1 of the 2-day meeting).
VIX/V5 expires a month later. What's amazing is that according to the VIX there is zero fear in the market right now:

http://www.barchart.com/charts/futures/VIV15

This suggests you might very well be right about another run at the highs coming out of nowhere.
I have no clue what I'm talking about.
  • #10,178
  • Aug 16, 2015 5:01pm Aug 16, 2015 5:01pm
Quoting MadLu
Hi folks, I'm after a bit of advice/info on fx options. I have savings in AUD (in Oz) but I live overseas, and I want to protect against further declines in AUD/USD, i.e. protect the value of my savings while I'm overseas. I opened an OANDA account and took a short AUD/USD position, but the leverage and volatility kept me glued to my computer day and night (not appreciated by husband and toddler) and frazzled my nerves. After some googling, it looks like maybe buying an option might be a better hedge for my savings. I won't have to watch it or pay...
I researched forex futures and forex futures options for quite a bit of time as a possible alternative to trading spot ... . For me, there is simply not enough volume/liquidity to forex futures options to monkey with, particularly in forex e-micros ... . http://www.cmegroup.com/trading/fx/#featured Moreover, I also don't think that one should start out trading futures options if they don't understand options generally (cart before the horse sort of thing).

For basic options education, look at Dough.com, https://www.dough.com/ and TastyTrade. https://www.tastytrade.com/tt/ Yes, you'll drown a little bit in all the info, but I can tell you from personal experience that trading options is a lot less time intensive enterprise than staring at a screen monitoring your spot forex trades ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #10,179
  • Aug 16, 2015 5:18pm Aug 16, 2015 5:18pm
Quoting Boy Wonder
{quote} OK geezer, we'll see I hope they do crank it up cos it'll be a hell of a sell IMO.
(Hobbles over to Boy Wonder and hits him with cane). "Who ya calling geezers?" (Thwack!) :nerd:

This geezer's short the Euro, but I wouldn't put it past EURUSD to move a bit higher in the short-term on positive Eurozone economic data (is there any?) or some transient Greenback weakness ... . My calculus here is that Eurozone QE is just beginning and that U.S. QE has ended and that there is more tightening to occur on the horizon on the Greenback side of the equation. Many sectors of the Eurozone have a looooong way to go ... . I mean, Spain, a 22.7% unemployment rate?! Yeesh ... .

Index movement in the short-term is likely to continue to be somewhat choppy, making directionality a hair-puller. I've been saying for months that it's either gotta break 213-ish or 203-ish for something truly revelational to occur. As long as it's in this mid-March to present zone, it's likely to be more short-term buying and selling whipping it about in that range. But I wouldn't put it past the market to break 203 on an interest rate hike and then for BTFDippers to wade back in after the magnitude of the likely-to-be "weenie" hike sinks into and is thereafter shrugged off by the market short-term. I mean, is 25 bps really anything to get excited about when the distance/time between here and interest rate normalcy is like someone jogging the Kessel Run ... .
Inserted Video
Fireworks are fun ... as long as you don't blow your fingers off.
  • #10,180
  • Aug 16, 2015 6:28pm Aug 16, 2015 6:28pm
Quoting ZebraSquirl
{quote} (Hobbles over to Boy Wonder and hits him with cane). "Who ya calling geezers?" (Thwack!) :nerd: This geezer's short the Euro
Yaaah, y'do realise geezer does NOT mean old bastard in British English....GEEZER!

http://separatedbyacommonlanguage.bl...6/geezers.html
I have no clue what I'm talking about.
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