Let's Trade Options

Fortunately, all was not lost in this week of largely hand-sitting, keeping powder dry for a vol pop ... . I watched tons of videos, etc. on correlated pairs trades (e.g., SPY/IWM, GLD/SLV, SBUX/GMCR, yada yada). The concept looks enticing and potentially gives you an extra edge if the pairs behave themselves and properly revert to a mean ... . Otherwise, it looks like a lot of shenanigans to maybe get a few extra bucks in credit, which doesn't appeal to me because there is a lack of simplicity to trading correlated pairs (you've got to watch for the divergence, figure out what ratio of contracts you should use, and then manage both sides individually, etc.). So, good to know about, but nahhh for me ... .

Seems like I'm in one kind or another TLT trade on a constant basis ... . Keep taking my eye off that HYG ball ... .

what a joke....fml....wait around on this crazy combo for a month and it finishes at the dead nuts low spot? are you kidding me?

fuck

bullshitish

$89 is doable in a month....

/ZB well up overnight, TLT should gap up $2 Fri. Rate relief will drive up TLT

trying to fill a $130 calls Oct/Oct4 calendar for 7c

Well.... /CL down almost 3%... UVXY up >16%, indices down...
European markets down 2-3%...

So that breakout yesterday from ascending triangle on US indices was failure, so far...

From ShadowTrader


Could it be possible to see a fat red candle today?

filled for 8c. What do you think next week will hold, SD?

I'd guess US stocks will be looking for /es >2050 next week

Idk TF... I see no reason for that, since uncertainty is prolonged, my bet is sideways to down. There is a kick ass level on SPX around 1950 that was attacked today, and obviously it cannot crack from the first attempt.

Market stopped yesterday right at a 61.8 fib retracement, of the ATH to the 1830 dip.

addon

Attached Image (click to enlarge)

maybe not quite 2050 but back to this weeks high for sure. I bought Oct/Oct4 diag SPY calls for 4c near the close (no fill), bot Sep4 VXX $20 puts for 6c.

Bullish.

sold out of all Oct VXX call flys, all $21/25/29 in for about 12c out for $0.90....trying to learn to take a healthy profit when I can & not wait around for the perfect finish on time spreads, end up with less....

With Thursday's up-move and Friday's down, I got out of a ton of crap at 50% max profit, including some of those bitches I rolled out to steer clear of FOMC ... . One thing I can tell you, the weeks leading up to FOMC is not the time be playing around with the number of contracts you're going to be putting on per trade that you and your account are comfortable with ... .

Passed on adding to my FXE short put verts that are laddered from here to December until I can get out of some of the late September/early October rungs I put on in an abundance of enthusiasm that a rate hike was "just around the corner" ... . That set of trades will probably work out, but with no rate hike, EUR/USD could continue to be a widow-maker of sorts for spot forex traders as it drifts aimlessly between 1.08 and 1.15. And as The Fool has pointed out, no use getting all crazy and slapping a lot of buying power at the thing; even more so since the FOMC fizzle. That being said, I may put on some short put sides on to match the short call vert rungs in the short term, since I can get those margin free ... . No way we're seeing anything near parity in the next couple of months ... .

The indices are still kind of a giant cluster since SPY broke 204 (seems like eons ago), and I find it hard to call levels here yet. Currently, 202's the high and 183 the low since the breakdown, but those candles that broke through 190 appear panicked and impulsive. Best as I can tell, 202 doesn't appear coincident with any long-term S/R, although that 183's pretty darn close to that 4-2014 low ... . Because I basically don't have a clue at this point (I frankly haven't had one since the break of 204), I'm going to continue to set up IC's with the short put sides at the 1 SD and the short call sides at the edge of the expected move ... . The expected move to the upside for the Oct 30th expiration in SPY is currently around the 204.5 strike, which is great, considering that's it's above long-term support/now resistance ... . 1 SD on the put side is around the 180 -- also golden ... . Too bad the IVR isn't higher, but it'll have to do ... .

have a good weekend, ya'll. I'm looking forward to not thinking about trading for a couple days. Disappointing outcome for trades I had set up for some kind of movement off the FOMC....in the end I got just enough movement the day after to keep me around b/e. I complain about being unlucky and there's no doubt that I am, but a trader has to make his own luck, so maybe I will be a bit wiser next time....

short VXX heavy profits are in reach, just need a >$3 drop by next Friday

I hear ya ... . All of the setups I put on pre-FOMC could have gone really badly, with me getting out of one side only to have the other go to max loss ... . I consider myself extremely lucky that I got whipsaw instead, but was fully prepared to have to roll crap for several months ... . Damned if you do; damned if you don't, I guess .. .

Back to schnooze trades for me for the next couple of months is my guess ... .

I am kind of expecting a reversion to bull run-up mode for equities, and a relief rally for the long bond. took all long vix positions off Friday, have some short vix trades running, as shown above. Have the back end of SPY diagonals running for next Friday - all told bout 50 of these, long $205.5 calls the lowest, then $206, $207.

This happens when you put on diagonals & calendars and your front short leg expires, you don't close the spread - you are left with the back long legs...and sometimes you get a move that puts those into nice profit. That's why it's a good idea to buy some time in the spread - that will give you a chance to make something on the long legs if the spread itself didn't do much. If I can see a $10 move up for SPY in the coming week, I will be a happy camper.

well you can't complain there's been no action in the last weeks, doesn't mean it was so easy to trade though.....

a SPY $208 Oct/Oct4 calls calendar puts the outside b/e at around the summer highs - upper $213.xx, trade will make money if SPY rallies and trades above $202 by Oct expiry, maxP on a 12c debit is a little over $0.90. Keep in mind when modeling long call time spreads, generally iv will be falling as the u/l rises, bringing down the equity P/L and bringing in (narrowing) the b/e's - the trade needs to be modeled every so often in order to adjust one's expectations and plans.

..... sitting on lotsa dry powder and need to put on some easy to manage trades as I am going to be insanely busy in October. For me, cheap calendars and verticals are m/l "set and forget" - set em up, put on a reasonable gtc order, go make money elsewhere. If the trade does not pan out at all then you're out the cheap debit...c'est la vie ....