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Let's Trade Options

  • #12,241
  • Mar 3, 2016 4:03am Mar 3, 2016 4:03am
Quoting The Fool
VIX Mar4 exp is 3/22, gives you a week post FOMC to catch a rise - a multi-strike vert will be spendy but could pay very well if there's a vol spike.... {image}
Mate, I need some of your help for my question as bro trade more on US equities. I have run pretty successful on Dax at Eurex and intending to run on DJIA. What I got now is on YM (Mini Dow) on ECBOT. I have look on IG Markets and everyone know they are OTC. I found out that Bid and Ask have a difference of 18 pips exact as this hour. Does the spreads better if I trade on US hours?

Thanks in advance.
  • #12,242
  • Mar 3, 2016 4:12am Mar 3, 2016 4:12am
By the way, I almost forgot NFP on the way. Is it because of NFP or because I can get better spreads during US hour?
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  • #12,243
  • Mar 3, 2016 4:59am Mar 3, 2016 4:59am
Quoting ChinaTraderz
By the way, I almost forgot NFP on the way. Is it because of NFP or because I can get better spreads during US hour? {image}
they are a spread betting firm not a options broker
  • #12,244
  • Mar 3, 2016 7:07am Mar 3, 2016 7:07am
Quoting Cecil Gee
{quote} they are a spread betting firm not a options broker
I know they are spread betting firm or better to describe as OTC. But in fact on Dax, their spreads are much cheaper than I trade on Eurex now. I do compare with Interactive Brokers and the spreads indeed higher. This screenshot which I took from IB direct ECBOT. Is it because of US hours or due to NFP that cause higher spreads? By the way, I am not using IB but will be trading directly to ECBOT. Just took couple of them to compare.
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  • #12,245
  • Mar 3, 2016 11:55am Mar 3, 2016 11:55am
Quoting ChinaTraderz
Mate, I need some of your help for my question as bro trade more on US equities. I have run pretty successful on Dax at Eurex and intending to run on DJIA. What I got now is on YM (Mini Dow) on ECBOT. I have look on IG Markets and everyone know they are OTC. I found out that Bid and Ask have a difference of 18 pips exact as this hour. Does the spreads better if I trade on US hours? Thanks in advance.
I'm not trading any of the names you list, so to see how the spreads change over the hours of the day I'd have to just watch those and see - which you can do for yourself, I'm sure.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,246
  • Mar 3, 2016 7:11pm Mar 3, 2016 7:11pm
Quoting The Fool
{quote} ZS and I were talking about nattygas up above a little ways - I am guessing UNG will keep dropping & maybe go into the $4.xx for a seasonal low. UGAZ will go lower also and will get a RS if ngas won't rally. I am wary of holding any leveraged etf's outright, as the SEC is considering new rulemaking that could shake up that whole equity space - many would be wiped out...I will post a link on that later, will be decided this year....
Natty gas is one of those things that I did a ton of research on back in September/October, looking for peak injection to occur some time in October or, at the latest, mid-November. Nevertheless, it did not help my timing as to entry. Long story short: mid-October to mid-November marks the peak "injection" period when stores are at their highest; mid-Jan to mid-Feb (roughly) are supposed to be a "seasonal peak." Weather is what moves natty gas, and this year, a particular strong El Nino led to mild temperatures virtually across the entire US, so the "peak" (lol) has been extremely muted, if not nonexistent, as there has been no significant draw down on natty gas reserves due to the mild weather. If $6 bucks is the seasonal peak for natural gas here, I don't know what price the peak injection will bring, but the pattern in previous years has been all down from the seasonal peak (aside from a small bump that occurs in the summer months as gas fired electricity plants gear up for increased electrical demand associated with air conditioning use).

As an alternative to playing natural gas via UNG, there's always CHK, the nation's second largest natgas producer; naturally, the thing's been totally hammered this past year.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,247
  • Mar 3, 2016 7:32pm Mar 3, 2016 7:32pm
Quoting The Fool
{quote} be patient....let the Spring equity rally run its course and tank the ^VIX. Also, if you want to bracket that 6/23 Brexit date, there's no vix product options (UVXY, VXX) beyond June until Sept - need to wait til the July options roll up......idk, what do you think, Cecil - will we see the Brexit go through......maybe all a buy rumor/sell fact scenario when no Brexit is the outcome....either way, gotta love the scheduled volatility events.
If it's anything like the Scottish Independence vote (which I played when I was still heavy into trading spot forex), there will be an anticipatory run up/down in Cable based on polling as the vote approaches. Of course, this particular vote is somewhat different, since the Euro is more directly involved, so you could see the Euro dipping on the "mere possibility" and then running up in relief if no Brexit occurs.

Working Brexit via a directly related product of some kind is somewhat difficult here unless you're going to go to futures to play the Pound and/or FTSE or to spot. There's naturally FXE to play the Euro effect, but I'm still in the camp that the Euro and/or FXE should only be shorted on strength since the ECB is in an easing cycle and the Fed is in a tightening one, which puts a natural downward pressure on the currency pair, and FXE just isn't that great an instrument to do that, particularly if you're selling premium.

Market uncertainty/fear products just might be the way to go ... . In any event, it never hurts to go long vol on one of these ebbs ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,248
  • Mar 3, 2016 7:42pm Mar 3, 2016 7:42pm
Quoting ZebraSquirl
A short-term, "I'm not ready for April index ETF setups yet," "don't wanna tie up buying power for a long time," engagement trade: RUT March 4th 970/975/1045/1050 iron condor Probability of Profit: 66% Max Profit: $171/contract Buying Power Effect: $329/contract This is one that it's worth trying to get a fill above the mid price. Due to the price of the underlying, price will dance around the mid by +/- .05 easily ... .
This was was originally filled for 1.69; stripped off the short put side for a .10 debit, rolled the call side out to the March 11th 1060/1070 for a .45 credit and sold the 985/995 for 1.20. Stripped off the March 11th short put side today for a .20 debit.

Have a few days left on the short call side; looking like another roll from here (price finished today at 1070), but ya' never know ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,249
  • Mar 3, 2016 7:48pm Mar 3, 2016 7:48pm
Quoting ChinaTraderz
By the way, I almost forgot NFP on the way. Is it because of NFP or because I can get better spreads during US hour? {image}
Any US instrument -- better spreads during NY session as a general matter and particularly within the first two-three hours of the session.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,250
  • Mar 3, 2016 9:29pm Mar 3, 2016 9:29pm
Quoting The Fool
{quote} I'm not trading any of the names you list, so to see how the spreads change over the hours of the day I'd have to just watch those and see - which you can do for yourself, I'm sure.
Thanks mate and I just found out yesterday and silly to put in trade earlier yesterday. Again it is chinese, hope you guys could understand those code when I share. LoL
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  • #12,251
  • Mar 3, 2016 9:31pm Mar 3, 2016 9:31pm
Quoting ZebraSquirl
{quote} Any US instrument -- better spreads during NY session as a general matter and particularly within the first two-three hours of the session.
Yeah. I just found out yesterday after I put on the trade. It is absolutely better spreads during NY session from what I notice yesterday. Even on European session, they charge almost 24 pips difference but during NY session, you might get only 8-12 maybe.
  • #12,252
  • Mar 4, 2016 5:25am Mar 4, 2016 5:25am
Quoting Cecil Gee
GLD is at a crossroads if it can close above 120.00 then continuation in GOLD however if it closes below then I believe GLD/ GOLD are heading down GOLD is around 1241 and GLD closed yesterday 118.68, will position myself accordingly
GLD closed above 120.00 yesterday
  • #12,253
  • Mar 4, 2016 5:31am Mar 4, 2016 5:31am
Quoting The Fool
Cecil I am looking at some shorter term trades to catch a vol spike after the March FOMC. Nobody expects the Fed to do a rate rise in March, so it would be a big surprise if they did. JY has said, however, that they expected to do 4 x hikes in 2016, so it's not like there has not been fair warning. Question is open as to whether a Mar rate hike would be seen as a bullish sign by the markets, as it (initially) was back in December....
we could see a spike today once NFP comes out, purely from a technical view. The VIX 200 MA on a weekly TF is at 15.64 and VIX closed 16.xx yesterday a could mean a fall in equities if we bounce of that 200 even if numbers are strong for US,
  • #12,254
  • Mar 4, 2016 10:42am Mar 4, 2016 10:42am
SPX is imo in the resistance field now... above current price we have sma200 on ~2018 (on /ES pretty much the same, 2017)... Descending trendline and 2020 S/R level from before. Could this be a turning point to a drop or not... Lets say next week, a touch of the above levels and at least a pullback.

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No strong sellers so far, and double bottom down there at 1800 was beautifull... And all that talking about poor structure, gaps, low volume and so on, means absolutely nothing if you are holding short position. It only means that IF from one point market sinks... that it can sink faster than usuall. Location, location, location... if you have a good location, then you improve your odds... And, if you are not right, losses can be small.
Hope is dangerous in this game.
  • #12,255
  • Mar 4, 2016 12:53pm Mar 4, 2016 12:53pm
Quoting The Fool
Cecil I am looking at some shorter term trades to catch a vol spike after the March FOMC. Nobody expects the Fed to do a rate rise in March, so it would be a big surprise if they did. JY has said, however, that they expected to do 4 x hikes in 2016, so it's not like there has not been fair warning. Question is open as to whether a Mar rate hike would be seen as a bullish sign by the markets, as it (initially) was back in December....
Still waiting, ^vix still sliding down....I have quite a few SVXY trades that are in good profit now - some call bwb's (Jun $50/60/70) that could return huge if SVXY will get up there with lotsa time left......also have Apr $45/46 calls I bot for 18c worth >70c now.....market showing no angst about Mar FOMC now, no fear of anything, happy days are here again, the lemmings could run to spoos 2,100 in a couple weeks....happened before, face ripped off so many times why I even bother sewing it back on...?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,256
  • Mar 4, 2016 1:51pm Mar 4, 2016 1:51pm
Quoting The Fool
I got in this YUM Feb/Apr $82.5/82 call diag over a month ago for around 20c.....I "knew" YUM would rebound and now here it comes.....the Feb $82.5 expired worthless and I'm left with the back Apr $85 calls...looking for a net 0ut 3x if YUM will push to $80 in the next week or so....
done, out for a net 3-bagger....maybe a lot more there, but I'm not gonna complain if it goes 10x, water under bridge now....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,257
  • Mar 4, 2016 1:58pm Mar 4, 2016 1:58pm
Quoting The Fool
{quote} done, out for a net 3-bagger....maybe a lot more there, but I'm not gonna complain if it goes 10x, water under bridge now....

good job
Hope is dangerous in this game.
  • #12,258
  • Edited 2:38pm Mar 4, 2016 2:20pm | Edited 2:38pm
Quoting StrayDog
good job
thanks, brudda. I have a whole lot of good trades on & just out, all of my Mar SPY bull put spreads have come off (the last few sets for a nickel debit) - plus many short vol (SVXY call spreads) are in good profit with lotsa time to go....everything peachy except I am still in SPY Mar $198/$201 bear calls....big loss on paper, not panicking yet, will start thinking about rolling it out to Apr next week.

I have Apr/May AAPL and NFLX call calendars that were quite cheap and could return huge if we rally thru March....hell, even some of my USO spreads are looking like they will make money.............just watching ^vix now and want to get in some more long vol spreads in case we come crashing down. Small chance for that after the Mar FOMC, but my gut is we are gonna see the bulls flex for most of Q2....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,259
  • Mar 4, 2016 2:53pm Mar 4, 2016 2:53pm
Holy Cow look at SDRL....CHK, too....where are my lotto tix?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,260
  • Mar 4, 2016 9:29pm Mar 4, 2016 9:29pm
I bought this here PBR Feb/Jul $7 call calendar on 1/4/16 for 16c....worth 42c now....I am looking for a buck....PBR will rally with crude.....Jul is a long way off.....high hopes....
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"If The Fool persists in his Folly he will become wise." - William Blake
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