Let's Trade Options

I set a lot of traps this week, just wait and watch mode pretty much now.....

have been filling Dec/Dec4 SPY calls calendars - $214 - $216, they're like 3-5c

Just got home after a long day at work, where I had to watch the SPY shenanigans (back to the .764 of the November range hi/lo) and oil go kerplunk on an iPhone app ... .

Out my AMBA earnings play short strangle at 50% max; a P 12/12 short straddle for a small profit (price made it back to 12 today, and I'd figure I'd take it off, since I wasn't particularly enamored with it); and a GPRO post-earnings short strangle for a small profit. I got a few earnings plays left and want to have plenty of powder dry for not only those, but FOMC action (if it isn't already priced in here, I dunno; the market got awfully jismatic over the ECB's not easing as much as expected; wonder what it's going to do when FOMC tightens exactly as much as expected (25 bps)). (Truth be told, I probably went a touch over the top in putting on stuff to bridge the gap between mid-Dec and mid-Jan earnings ... . Live and learn.)

Took off the call side of the AVGO short strangle commission-free at .05 debit; I will get out of the short call side at 50% for that side if we get a little bit of retrace/further vol collapse next week.

My ULTA short strangle's short put side is nearing worthless, but price is within a buck of the short call side. To avoid another unexpected assignment like I had in HD, I'll look at buying a little protection with a long call a few strikes above my short call strike. (And here I was looking at the chart going, "ULTA doesn't usually move much after earnings" .... ).

I have been scrambling to get long SPY for December, my long vol spreads are not looking too promising, but at least they are mostly pushed out into Jan. Fed will hike and US equities will explode north.....at least that seems to be the rumor from this week's action.

Anyway, I'd bet we touch or break the summer highs next week.....have a good weekend, ZS.

I missed taking a long at the dip to 200 post Friday the 13th/Paris aftermath and then again, well, yesterday ... . Guess I have to go back to letting IVR be the signal. Oh, well, fingers in a bunch of pies regardless.

Have a good weekend, too. Looking forward to a couple days away from the screen, the waning earnings season, too (fingers crossed that crap doesn't go totally awry with the last few earnings plays I plan to do along with the ones I got on now).

So, I'm looking to put some longer-term, background plays on that I don't have to putz with too much and that I can do somewhat mechanically at the beginning of every month without having to pour through the Dough grid, do other research, or look at a bunch of different setups/instruments. After doing mechanical SPY/IWM/DIA/QQQ iron condors for quite a bit of time and finding out what the warts on those were (horrible vol skew, spotty IV strength such that there were long droughts in productive setups, clumsiness of rolling iron condors, to name a few), I'm looking at doing VXX covered calls as one of those "constantly on" background trades.

Por ejemplo:

100 Shares VXX at 18.22
Jan 22nd 18.5 short call (mid price 1.70)
Entire setup 16.57 debit (i.e., break even is 16.57, excluding fees/comms)

The credit reduces the cost basis of the shares (in this case) by a whopping 9.3% so you could get your cost basis down to $0 in 10-11 45 day cycles, assuming you could get this kind of premium month in/out. You're not going to get rich quick this way, but, for me, a good, mechanical type background trade ... .

I have a nice pile of these Dec/Dec4 $213/$215 calls double calendars....most calendars bought for a nickel +/- .... this trade says Santa c'mon dude bring me a new set of SPY ath's the week b4 Xmas.....I may do some Dec4/Dec5 sets but I have been wary of the FedGrinch

more bull, shooting for a SPY meltup target $214-$215 in FOMC week.

push out a little further, widen to $1, put on +1 week, the spread has a nicer P/L, offers the opp to let calls run to the end of the year, $220 may be in the cards for a new 2015 high....

FCEL RS?.....the puts will pay while oil is down....Will take some time for otm puts to be tradeable

http://finance.yahoo.com/news/revers...212509471.html

RS are shorter's marks, those fucking speculators are just like vultures I tell ya....hey that reminds me....I'm hungry....let's look for some other RS marks....???

If you're bad, Santa puts a lump of coal in your stocking. Well, he won't have to spend much stocking up - pretty soon they won't be able to give the shit away. Peabody (BTU) did a 1:15 RS on 9/30 when the stock traded for $20.....and it has already dropped to $10

....you can look for super cheap puts verts out a month or more.....options volumes are spotty, prolly be tough to get fills....

short vol til the end of the year, need to calm myself down re: Jan $22/20 short puts

the exchanges telegraph splits

http://www.nasdaq.com/markets/upcoming-splits.aspx

otherwise keep doubling down....what's the worst that could happen?

Jan $20/18/15 puts brkwBfly buys insurance down to about $17.50 ( @ 3:2 )

EWZ, PBR on the volatility watch list.....

http://news.yahoo.com/impeachment-se...211535216.html

Been watching that EWZ ... . It comes up on my screener quite a bit. Unfortunately, I can rarely get enough juice out of a standard short strangle setup (Jan 15 20/27 short strangle goes for a .53 credit), so I'll have to approach it some other way or not at all (unless volatility positively explodes). I'm kind of shying away from these nickel and dime, sub 1.00 strangle plays, since I'm taking them off at 50% max profit, which means only $50 per setup at best (less with fees and commissions), even for those 1.00 credit plays ... .

PBR I'm going to wait on ... . Probably should have pulled the trigger when it was sub-4.00 ... .

For tomorrow, I'll look at putting on a short strangle in P ... . I'll have to force the strikes a little bit to eek a 1.00 credit out of the setup (but not by much) (the Jan 22nd 8.5/15.5 short strangle will get you 1.12 in credit (68% POP). I could do worse on a $12 underlying ... .

I'll also be looking to initiate a covered call setup in VXX if price sticks around this level or a bit lower ... . Would have made better sense to initiate this at the beginning of Nov, when price was between 17.75 and 18.25, since I could have had a reasonable setup that expired immediately post-FOMC; now a Dec 18 covered call doesn't make a ton of sense, since I can't get the premium I want to make for a decent break even. Need to just play VIX products in general low vol environment and not dick with forcing other stuff (which is kinda what I was doing in early Nov -- forcing index ETF/TLT setups; lol).

Ain't squat for earnings to play this week: the only IVR 70+ issue on my list is LULU (Wednesday before market open). COST, ADBE, TOL -- the IVR's too low to monkey with, but I'm going to keep on eye on them to see if something happens post-earnings to make plays worthwhile; ya never know.

However, drying out my powder a bit here isn't a bad thing ... . Looking forward to a minimum of trades on going into the holidays/FOMC ... .

Tell ya one thing, I'm liking the UVXY chart somewhat better than the VXX chart. I mean, doesn't this look like bottom to you?:



Naturally, I don't trust it a great deal since VIX isn't at bottom (nor is VXX), but it's the best it's been since mid-August for a long (2015 low is 24.34). Moreover, there's 4.53 in juice with that Jan 22 25 short call, which would put a covered call setup break even at just below $22 ... . Obviously, it would be a pricey affair, with a Jan 22 185 short covered call setup at current underlying price a $2200 undertaking ... . Were I to have just tons of cash lying about ... .

Speaking of my "ideal" long VIX set up -- I'm still waiting for a fill for a 1.50 credit for this:



Probably not happening in the near future (FOMC and all), but it'll happen at some point between now and forever ... .