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Let's Trade Options

  • #11,501
  • Dec 14, 2015 12:05pm Dec 14, 2015 12:05pm
Quoting The Fool
big el Nino means mild weather for the US northern tier......you need a "polar vortex" or some other prolonged cold spell to help the natgas storage suck down in the winter.....not likely....I dunno how low gas could go, I have heard people smarter than me saying sub $1.50, even down to a buck....next summer could be the time to look for the alltime low....or the summer after that....
UNG another one to watch...it will bottom eventually.....worse case though is it hits a bottom level and flatlines there m/l for years.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,502
  • Dec 14, 2015 12:14pm Dec 14, 2015 12:14pm
Hi people. I had some various shit to do regarding my current day job, so I was just reading the thread, but with no posts.

For merquise
Javi se na pm za to sta te zanima.
Hope is dangerous in this game.
  • #11,503
  • Dec 14, 2015 1:23pm Dec 14, 2015 1:23pm
Quoting The Fool
orders I have on to catch a ^VIX collapse, as seen I am not looking to risk too much....fishing for the crash b4 the spike.....crazy?
no short vix trades filled as it is slumping a bit today......I am holding out for a little more juice (for Dec/Jan long vol spreads) - hope not in vain.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,504
  • Dec 14, 2015 1:34pm Dec 14, 2015 1:34pm
it a mthrfckin gold mine yo.

http://finance.yahoo.com/news/years-...210002513.html

"....one little-known long-short mutual fund manager is beating some of Wall Street's biggest names ..... by using options to short leveraged exchange traded funds which are ETFs that offer two or three times the daily positive or negative return of an index and which have become increasingly popular among hedge funds and other traders as the broad U.S. market has flatlined."
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,505
  • Dec 14, 2015 7:48pm Dec 14, 2015 7:48pm
Quoting The Fool
it a mthrfckin gold mine yo. http://finance.yahoo.com/news/years-...210002513.html "....one little-known long-short mutual fund manager is beating some of Wall Street's biggest names ..... by using options to short leveraged exchange traded funds which are ETFs that offer two or three times the daily positive or negative return of an index and which have become increasingly popular among hedge funds and other traders as the broad U.S. market has flatlined."
Gotta give kudos to the guy ... . Smart approach capitalizing on these flaws ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,506
  • Dec 14, 2015 7:50pm Dec 14, 2015 7:50pm
except.....buried in the article was a reference to this:

http://www.sec.gov/news/pressrelease/2015-276.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,507
  • Dec 14, 2015 8:20pm Dec 14, 2015 8:20pm
Quoting The Fool
{quote} UNG another one to watch...it will bottom eventually.....worse case though is it hits a bottom level and flatlines there m/l for years.....
Mofo just totally imploded (somebody forgot to tell that there won't be any seasonality if there aren't any seasons ... lol). I briefly considered UNG covered calls, since the IVR's at 88, but it may implode even more yet, so best to wait. There's no sign that it's going to rise from the dead in short order ... . We may get a short seasonality run up, but with a fairly mild winter forecasted, there'll be a disproportionate carryover in storage that'll only make things worse for prices in 2016 is my guess ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,508
  • Dec 14, 2015 8:34pm Dec 14, 2015 8:34pm
agree on natgas, plenty room below.....Fed hiking should boost the banks
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-12-14_1831bac.png Size: 70 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #11,509
  • Dec 14, 2015 8:38pm Dec 14, 2015 8:38pm
Quoting merquise
Ok guys thanks for your input.. I will go through all what you wrote Anyway so options is more for longer term trading, as I can see. 2-3 weeks to couple of months lasting trade right? Now I have a couple of stupid questions as it may seem but I have to ask them Straddling the lets say Oil at the start of the month by buying one ATM put and call option, how profitable or not can it be? Also using protective call/put strategies in the same manner how useful are they? Now the time period could be even 2,3 months, or even the whole year for yearly...
There are a lot of variables to consider with both of those questions and the answer will be different at different times. A particular setup like a short strangle is excellent at certain times (where volatility is high), but poor at other times (where volatility is low), but even when volatility is high, sometimes it is just not worth it to short strangle a particular instrument, because the profit potential in the setup is too low (for example, where the price of the underlying is low).

The only way I can figure out whether a particular setup is worthwhile is to run it through the software so that I can see what the profit potential of the setup is, how much buying power it will require, what the likelihood it will expire in profit is, and where "break even" points are.

I do covered calls from time to time, but those involve buying long stock and then selling short calls against to reduce your cost basis in the stock or in the alternative, covered puts which involve your taking a short position in the stock and selling puts against that position. Again, though, whether a particular covered call setup makes sense depends on a wide variety of factors (price of the underlying, IV, amount of short call premium, profit potential, etc.), which I can generally only figure out by resorting to the options software/platform, playing with potential setups, and then deciding whether a particular trade is worthwhile.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,510
  • Dec 14, 2015 8:46pm Dec 14, 2015 8:46pm
Quoting ZebraSquirl
{quote} Mofo just totally imploded (somebody forgot to tell that there won't be any seasonality if there aren't any seasons ... lol). I briefly considered UNG covered calls, since the IVR's at 88, but it may implode even more yet, so best to wait. There's no sign that it's going to rise from the dead in short order ... . We may get a short seasonality run up, but with a fairly mild winter forecasted, there'll be a disproportionate carryover in storage that'll only make things worse for prices in 2016 is my guess ... .
There also isn't that much profit potential in a UNG covered call unless you're devoted to potentially holding it for a lengthy period of time and/or chasing price up the ladder with your short call strike or if you've got oodles of cash and can take multiple positions at various prices over time such that you get a position that has a good average value. Not the funnest nor most productive way to put your buying power to work, in my mind ... .

I think they're probably best used as a buy-and-hold portfolio-building tool or just something that you'll have to do on occasion when you get assigned an underlying ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,511
  • Dec 15, 2015 5:55pm Dec 15, 2015 5:55pm
Got my "FOMC party" crap together ... . Not much to do now besides wait in line to get your ticket for the show:

Inserted Video
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,512
  • Dec 15, 2015 11:46pm Dec 15, 2015 11:46pm
While I'm waiting for the FOMC shenanigans to begin or conclude, I'm getting my scalping chops back up to snuff paper trading /ES using 1 min. TICK on my day off during the NY session. There are a bunch of John Carter vids on YouTube that show you how a pro does it (of course I won't be going in crazy like he does with 20 contracts -- yeesh), and I do glance at an /ES chart to firm up my notion as to direction (Carter mostly just lets TICK price action do the directional work for him).

In the Asian session, which tends to be a tedious 4-6 point max wide session most nights, I can still wrack up a bit of tickage, but naturally can't use TICK, so it's old-fashioned session range, obvious S/R stuff -- old hat for me from scalping spot forex. Unlike NY session TICK trading (where Carter suggests that you shoot for at least 2 pts.), Asian is a "take your two ticks like a man and move on" affair ... . String four to six of those two to four tickers together, and you've got a 2-6 points, which is not bad, particularly with a side of beer and chips ... .

Edit: For the Carter vids, just do a YouTube search with the terms, "Carter," "TICK," and "E-Mini S&P." His stuff should come up. Skip his talkathons with the Soz (TastyTrade) and watch a few of his live TICK trade videos; they're fairly straightforward ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,513
  • Dec 15, 2015 11:53pm Dec 15, 2015 11:53pm
Another boredom-induced, down-trodden energy sector high IVR/IV (100/119) covered call play:

100 Shares CNX at 6.61
1 Jan 15 7 short call
Total Package: 6.00 debit
Max Profit: $100 (minus fees/comms) if called away at 7
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,514
  • Dec 16, 2015 12:01am Dec 16, 2015 12:01am
WYNN (IVR/IV 84/65) keeps coming up on my radar.

I got this setup filled yesterday:

Jan 22nd 45/77 short strangle for a 1.96 credit.
POP%: 76%
Max Profit: $196

I'm doing it short a little bit of next earnings ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,515
  • Dec 16, 2015 12:03am Dec 16, 2015 12:03am
I considered playing FDX earnings tomorrow, but it's right in the middle of the FOMC cluster, so going to pass on it (it's too bad; it's got plenty of juice in it). Don't want FOMC broad-market shenanigans to f the setup ... .

This probably means that NKE will be my last earnings play of the season, after which I will dry out powder heading into the next (AA's usually first up, and they announce earnings on Jan 11).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,516
  • Dec 16, 2015 11:01am Dec 16, 2015 11:01am
Quoting The Fool
it a mthrfckin gold mine yo.

http://finance.yahoo.com/news/years-...210002513.html "....one little-known long-short mutual fund manager is beating some of Wall Street's biggest names ..... by using options to short leveraged exchange traded funds which are ETFs that offer two or three times the daily positive or negative return of an index and which have become increasingly popular among hedge funds and other traders as the broad U.S. market has flatlined."
Like shorting UGAZ for example.
Hope is dangerous in this game.
  • #11,517
  • Dec 16, 2015 11:13am Dec 16, 2015 11:13am
Quoting ZebraSquirl
I considered playing FDX earnings tomorrow, but it's right in the middle of the FOMC cluster, so going to pass on it (it's too bad; it's got plenty of juice in it). Don't want FOMC broad-market shenanigans to f the setup ... . This probably means that NKE will be my last earnings play of the season, after which I will dry out powder heading into the next (AA's usually first up, and they announce earnings on Jan 11).
Hey ZS... can you tell us your impressions of this last ER's cycle... I guess that vast majority of trades was short strangles and a few Iron Condors...
How many did you do, what was the biggest pain in the ass of them? Also, in your opinion, what account size is apropriate to do short strangles on $100, and $200-250 stocks...

I traded ER's setups a lot before... I got a nice punch in the teeth with short strangle on NFLX once, (short call was a mofo) but the mistake was mine - too expensive (before split) and way too wild stock for me. An example where you simply must take a loss and run for the hills, no rolling position... But vast, vast majority of others was winners, only 2 big losers, and that second one I think didn't had to be a loser, the position could be rolled... but I was not expirienced enough for that.
Hope is dangerous in this game.
  • #11,518
  • Dec 16, 2015 6:10pm Dec 16, 2015 6:10pm
Quoting StrayDog
{quote} Hey ZS... can you tell us your impressions of this last ER's cycle... I guess that vast majority of trades was short strangles and a few Iron Condors... How many did you do, what was the biggest pain in the ass of them? Also, in your opinion, what account size is apropriate to do short strangles on $100, and $200-250 stocks... I traded ER's setups a lot before... I got a nice punch in the teeth with short strangle on NFLX once, (short call was a mofo) but the mistake was mine - too expensive (before split) and way too wild stock for me....
I lost track of how many I did, but I did most of the ones on the TastyTrade/Dough grid that were 70+ IVR and had a 1.00+ credit to offer. I did okay, but I'm still working off a few losers with rolling and such -- IBM, YUM, and ULTA. One totally blew up in my face -- HD. I short strangled (shouldn't have due to the price of the underlying), price breached the setup, I rolled, and then out of the blue was assigned (so much for Soz's "Oh, I never get assigned"). I could have also bought some cheap long call protection for the call side (it would've caused me much less grief), but I said, "F it, I'm dumping this right now," which may have been the worst thing I could have done, but I just didn't feel like tying up the buying power. Oh, well, lesson learned.

But the whole name of the game is managing the losers, rolling, massaging the strikes, etc. until you can get the thing to scratch or at least reduce the loss in some significant way. You can have a ton of winners, but just a couple of major losers that'll offset those. It's not fun working off losers, but it's the only way you'll come out ahead in the game ... . I guess why I've been doing it more frequently is that I've not been totally satisfied with the amount and quality of broader index ETF trades that I can put on (plus vol skew's a bitch in SPY, QQQ, IWM, and DIA) .... . And there is the fact that those winners are immensely gratifying ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,519
  • Dec 16, 2015 6:21pm Dec 16, 2015 6:21pm
Speaking of gratifying -- out of the HYG Jan 29 74/84 short strangle for 50% max. About $50/contract for 2 days work; I'll take it ... .

I'll look to get out of my SUNE covered call tomorrow for about $170 in profit/contract; unfortunately, I got a little frisky with my short call, put it in too close to current price and couldn't effectively roll it without going wayyy out in time ... .

Filled that CNX covered call for $6.00 without having to chase price .... .

Disappointed that we got no VIX bounce, so I took off all my "big bounce" long put verticals ... . Had high hopes for a big December pay day ... . Not to say that shit won't hit the fan now that the band-aid has been ripped off and it begins to sink in that this is just the first of a series of hikes ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #11,520
  • Dec 16, 2015 10:53pm Dec 16, 2015 10:53pm
Quoting ZebraSquirl
Disappointed that we got no VIX bounce, so I took off all my "big bounce" long put verticals ... . Had high hopes for a big December pay day ... . Not to say that shit won't hit the fan now that the band-aid has been ripped off and it begins to sink in that this is just the first of a series of hikes ... .
Life is full of disappointment. My life, that is.....
"If The Fool persists in his Folly he will become wise." - William Blake
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