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Let's Trade Options

  • #11,021
  • Oct 19, 2015 12:29pm Oct 19, 2015 12:29pm
Quoting The Fool
trying to fill variety pak of cheap vert spreads for the fatass big movers, no luck yet. I think these are easier to fill right at the open but I am just guessing about that....
these big price breaks show up often on the relatively illiquid names - a big oi at one strike will push that option's value up against the neighboring strike's value, so you think you can spread super cheap - and you might just get a great deal, so worth shooting at, anyway - but if the neighbor has very low oi (not uncommon) then you have trouble filling the spread. But if you can get in any kind of spread for <10c on the dollar, you are set for a big gain if you catch the move....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,022
  • Edited 3:44pm Oct 19, 2015 12:43pm | Edited 3:44pm
Quoting The Fool
I closed most bearish VXX trades, but some are running and will do better with more time gone, maybe I will end up letting short $20 puts expire and holding the $19.5 & $19 calls into next week.
from VXX O/O4 $20/19p diag rolled the O-$20p down to O4-$18.5p for a net debit of 22c overall, now VXX running under $18.50 and I may make out a double. looking to close for 50c+ on a nice green day tomorrow
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,023
  • Oct 20, 2015 9:21am Oct 20, 2015 9:21am
Mostly hand sitting here .... .

Closed out a SPY short put spread and a TLT short call spread at 50% max. Put on one small EWZ iron condor; modest volatility to sell premium there.

Not catching a break on these earnings plays; IBM breached the short side (is there a pattern here?), but got out of the call side at nearly max profit. Rolled the put side out; at least I don't have an inverted YUM situation there ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,024
  • Oct 20, 2015 2:56pm Oct 20, 2015 2:56pm
SPX sideways/unchanged, but broke down shortly after NY close to come to rest at short term support (SPX500 2027-ish). It made a brief run at the 204 mark, but fell short at 2039.1 ... . VXX popped somewhat today, reaching to nearly 19.30 before retreating to slightly below 19 to finish the day.

SPY, IWM, DIA, and QQQ IVR remain below 20 (i.e., not worth selling premium in).

TLT IVR edged up a bit to 33, but best to wait on until it's at 35+ at a minimum. TBT is slightly better at 37, but I'm not fond of the bid/ask spreads for trading it.

Z-z-z-z-z-z-z.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,025
  • Oct 20, 2015 8:16pm Oct 20, 2015 8:16pm
Quoting ZebraSquirl
SPX sideways/unchanged, but broke down shortly after NY close to come to rest at short term support (SPX500 2027-ish). It made a brief run at the 204 mark, but fell short at 2039.1 ... . VXX popped somewhat today, reaching to nearly 19.30 before retreating to slightly below 19 to finish the day. SPY, IWM, DIA, and QQQ IVR remain below 20 (i.e., not worth selling premium in). TLT IVR edged up a bit to 33, but best to wait on until it's at 35+ at a minimum. TBT is slightly better at 37, but I'm not fond of the bid/ask spreads for trading it. Z-z-z-z-z-z-z....
yup, been a slow grind up last 2 weeks 1965 to 2025....what was shaved off at the close has crept back in Asia......I was sad to see VXX pop back above $19, but there's 3 td's to get me some profit on $19/$18.5 bear puts....otherwise, I'm somewhat out of it & trade volume is low, working long hours at the day jobs....trying to fill some def-risk ER trades on various names as shown above, zero fills, not chasing anything....the market needs to show me something worth trading else I got other shit to do....
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,026
  • Oct 20, 2015 8:34pm Oct 20, 2015 8:34pm
been about 2 months since the China crash scare and the ripples from that big splash are gone, they are figuring out how to lay in a nice, controlled upslope on the shcomp (lol, sending short-sellers to the work-camps does wonders for that).....Santa will not skip China
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-10-20_shcomp.png Size: 292 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,027
  • Oct 21, 2015 7:13am Oct 21, 2015 7:13am
Oct FOMC in 1 week.....nobody talking about it (fine with me)....nothing really moving equity markets enough for any big moves either way....maybe the Fed will surprise next Wednesday.....?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,028
  • Oct 21, 2015 9:28am Oct 21, 2015 9:28am
AAPL DD, with AAPL rising b4 the ER on 10/27, I can ignore the put side & let them run thru ER day - maybe AAPL will tank? - but will take off the call spread on ER day w/ hopes of decent profit if AAPL stays under $118 or so, iv doesn't skew too much
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-10-21_0923AAPL.png Size: 79 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,029
  • Oct 21, 2015 8:11pm Oct 21, 2015 8:11pm
Quoting The Fool
{quote} The market needs to show me something worth trading else I got other shit to do.... {image}
Ditto here. Went through my cycle of looking at SPY, VIX, and the Dough Grids.

Nothing sticks out that I want to play, so just letting the probabilities of what I got on now work themselves out. Makes for extremely short work, which can be nice .... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,030
  • Oct 22, 2015 8:19am Oct 22, 2015 8:19am
QE forever

Draghi warns on China, hints at further QE to come in December

He put a fire under DAX (currently +3% versus eur/usd -1.5%), that is for sure... and here we go again. BTFD all the way to new ATHs.
Hope is dangerous in this game.
  • #11,031
  • Oct 22, 2015 9:17am Oct 22, 2015 9:17am
Quoting StrayDog
and here we go again. BTFD all the way to new ATHs.
Oct FOMC a non-event, Santa rally (at least thru November) on-track for US equities. /ES could rally another 100 pts in November.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,032
  • Oct 22, 2015 10:36am Oct 22, 2015 10:36am
good result on SPY O/O4 $205/$206 calls diag today - the $205 short leg expired worthless last week and I let run 35 of the O4 $206 long calls w/ a $0.30 GTC, which was hit ...original diagonal was a 4-5c debit.....always nice to get paid....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,033
  • Oct 22, 2015 11:18am Oct 22, 2015 11:18am
Quoting The Fool
.....always nice to get paid....
Nice job amigo.

My trading activity is pretty thin recently, a couple of small winners (scalping), nothing to brag about... Last option trade I took was that /ES call spread that I sold, and exited at just the right time, although at just 25% or so... When I saw today that MCD is up 8% and DOW over 5%... I knew that the party is started, and Draghi just put more oil into the fire. Only /CL is lagging behind, to complete the picture. Still, plenty more earnings to come, starting from today -> we have GOOGL, MSFT and AMZN in AH. Show must go on.
Hope is dangerous in this game.
  • #11,034
  • Oct 22, 2015 12:08pm Oct 22, 2015 12:08pm
Quoting StrayDog
Nice job amigo.
That is really the best way the diagonals can go, you put them on and catch a trend, the initial debit is somewhere +/- $0.00, the front week or month expires worthless, and then the back long options benefit from trend continuation, so your 1c debit runs to 50c credit or more, I wish they could all work out that way....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,035
  • Oct 22, 2015 2:30pm Oct 22, 2015 2:30pm
Quoting StrayDog
-> we have GOOGL, MSFT and AMZN in AH. Show must go on.
check em out, all green fat & happy. I closed out of a pile of bullish trades today, will prolly be kicking self tomorrow with bull market on a fresh tank o rocket fuel.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,036
  • Oct 22, 2015 2:43pm Oct 22, 2015 2:43pm
Zowie kapowie. With the day job, all I could do was watch the fireworks and hope that my short put sides were thick enough to survive the onslaught on the short call side wall. Unfortunately, a couple of soldiers made it over the wall ... . Nature of the beast.

My guess is that I'm gonna have some housecleaning to do next week, which will keep me entertained for a bit ... .

Thumbs up on those DD's working out, TF ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,037
  • Oct 22, 2015 2:55pm Oct 22, 2015 2:55pm
yeah, I wanted to put on some cheap verts for AMZN & GOOGL, but even $50 otm spreads were gonna cost more than I usually pay....lol, that's what I get for being a cheapskate....both of those I looked at $2.50 weekly verts for like $0.25 - $0.60, they would have gone 5 to 10x on the calls spreads.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,038
  • Edited 7:06pm Oct 22, 2015 6:33pm | Edited 7:06pm
summer ath high for SPY was $213.78, and that's about the sweet spot at expiry for the Nov/Nov4 $214/$214.5 calls diag, which debits 4c and is safe out to near $216.....the premise here is of course the SnP continues to rally but finds its limit after another 100 pts up in 29 dte.....might be a tall order, we'll see....

if we get SPY running up to $210, I will start looking out to Dec and selling $2-3 verts beyond $215, will use some of that credit to fund put spreads for potential Dec FOMC jitter fallbacks to $200 & below...
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-10-22_1822SPY1.png Size: 79 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,039
  • Oct 23, 2015 8:56am Oct 23, 2015 8:56am
Quoting The Fool
summer ath high for SPY was $213.78, and that's about the sweet spot at expiry for the Nov/Nov4 $214/$214.5 calls diag...
I like that idea. What is calculation on ToS for maximum gain / loss on this?

Here is that diagonal on IB
Attached Image (click to enlarge)
Click to Enlarge Name: SPY-diag.PNG Size: 36 KB
Hope is dangerous in this game.
  • #11,040
  • Oct 23, 2015 9:53am Oct 23, 2015 9:53am
Quoting StrayDog
{quote} I like that idea. What is calculation on ToS for maximum gain / loss on this? Here is that diagonal on IB
all I have on short notice is on the P/L graph shown above - on those, I will usually put "slices" at the b/e's and at the MaxP - anyway, wherever the slice are on the graph shows up numerically in the table below the graph - so from the screenshot, I see MaxP (at expiry) is at $213.65 and is $890 for a 20-lot.

I did a 10-lot $215/$215.5 as above for 4c today - I like these $0.50 spread diagonals - you can put on a good number & not tie up so much margin, and if you get on the death slide, it's a little easier slope to deal with. As far as max loss goes, below the strikes, you just lose your initial debit, but beyond the strikes, you can see the loss is a non-linear function, but the max loss is the difference between the strikes + comms - or for the 20-lot shown, around $1,000 ----- BUT, you would have to see SPY move way out past $218 to start getting close to the maxL.

These are tricky to trade and it's important to put the short strike well beyond where you think the u/l may move to by expiry, as the losses are steep past there. Also, you have to hold these close to expiry to get the most out of them.
"If The Fool persists in his Folly he will become wise." - William Blake
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