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Let's Trade Options

  • #12,421
  • Mar 20, 2016 12:14am Mar 20, 2016 12:14am
Quoting The Fool
I see $14/$10 as a possibility maybe you can get 80c for it, and that sucks.
bolder would be $17/$13 for maybe $1.50.....if I am right about ^VIX running up in June before the Brexit referendum then maybe that looks good....at this point I don't think the Fed will do anything but coo until after the election
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,422
  • Mar 20, 2016 8:34am Mar 20, 2016 8:34am
looking at the communication sector for see volatile days coming real soon. AT&t and VZ are the two being looked at coming trading week may look to do 3 month trade on, charts indicate down but I may just do a strangle to be safe as the options are cheap
  • #12,423
  • Mar 20, 2016 3:45pm Mar 20, 2016 3:45pm
Quoting The Fool
{quote} I don't often go super bull on the vix product options, but I keep an eye on the UVXY puts. as there are sometimes some extreme pricing disparities in there. Occasionally you can get your long leg ask @ <10c with a pretty fat short leg bid $2-$4 away .... you can see in the Jun puts chain how shitty the spreads are. This is a recipe for pain if you want or need to buy out of the spread b4 expiration. I see $14/$10 as a possibility maybe you can get 80c for it, and that sucks. If there is a vol spike and you want to buy out, the future spreads...
I'm doing the old "consider all the possibilites" routine, checking on different setups to see if they're workable, etc.

Clearly super bulls are out, since OI is toward working the call side, so the options are basically bull call spread, a credit spread that is near ATM, a call cal/diagonal, or some kind of fly ... . I imagine things flip to the put side on a spike, with traders doing the inverse of those things. Just haven't worked these products nearly enough to have a fluency in what works and what doesn't ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,424
  • Mar 20, 2016 4:26pm Mar 20, 2016 4:26pm
Quoting ZebraSquirl
I imagine things flip to the put side on a spike, with traders doing the inverse of those things. Just haven't worked these products nearly enough to have a fluency in what works and what doesn't ... .
the basic problem with short vol trades is this: options price is based on iv and if you observe you will see how quickly they lose value as iv decreases and the u/l price goes down. You can lose money on a long otm UVXY put trade even when UVXY moves $10 in your favor. I don't usually even touch the puts in any of the vix products anymore, just occasionally look for the rad mispricings in the UVXY chains.........as noted above, if you want to be short vol you might as well put on some long call spreads in the equity indices
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,425
  • Edited Mar 21, 2016 12:05am Mar 20, 2016 7:56pm | Edited Mar 21, 2016 12:05am
Still shopping Jun UVXY call flys ----- $29/40/51 for 60c .....wide June flys will get better as the ^VIX keeps falling
.....will see if I can fill something under 50c
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,426
  • Mar 21, 2016 1:41am Mar 21, 2016 1:41am
Quoting The Fool
.........as noted above, if you want to be short vol you might as well put on some long call spreads in the equity indices
well and then there are the inverse ^vix products - like SVXY, which I am making money with atm as ^vix slides....would love to see ^vix make new atl's sub 10 and I think it berry well could this Spring
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,427
  • Mar 21, 2016 8:06am Mar 21, 2016 8:06am
Quoting The Fool
..., if you want to be short vol you might as well put on some long call spreads in the equity indices
Or you can put long call spreads in SVXY. (I know, shitty options there.)...

I see now you mentioned that bellow the original post. You can also sell call spreads on VXX, I used to do that.
Hope is dangerous in this game.
  • #12,428
  • Mar 21, 2016 10:38am Mar 21, 2016 10:38am
I filled a SPY calls calendar - Apr/Apr4 $212 @ 13c
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,429
  • Mar 21, 2016 12:15pm Mar 21, 2016 12:15pm
Really shitty volume again... with SPY just like 50 M so far.
According to Yahoo Finance, average SPY volume in last 3 months was almost 150 M per day. I can remember 200 M per day, but back in 2014...
Hope is dangerous in this game.
  • #12,430
  • Mar 21, 2016 12:25pm Mar 21, 2016 12:25pm
Quoting StrayDog
Really shitty volume again... with SPY just like 50 M so far....
I don't even know what it means anymore.....market is mostly bots trading against each other on the subsecond tf's......
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,431
  • Mar 21, 2016 12:53pm Mar 21, 2016 12:53pm
Someone told me yesterday that over 60% of total volume on NYSE goes to algos now. Idk if that is true. Market is very very mechanical, and that is a good thing if you scalp it.

Interesting chart... Basically do not fight the CB's.
Attached Image (click to enlarge)
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Hope is dangerous in this game.
  • #12,432
  • Mar 21, 2016 6:05pm Mar 21, 2016 6:05pm
Quoting StrayDog
{quote} Or you can put long call spreads in SVXY. (I know, shitty options there.)... I see now you mentioned that bellow the original post. You can also sell call spreads on VXX, I used to do that.
That's the way I've traditionally "shorted vol" in a vol product -- going long SVXY, but that's been rare. At that point, my attention usually turns to shorting vol in other instruments ... .

VIX now slightly sub-14 ... . Hand-sitting's a bitch ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,433
  • Mar 21, 2016 6:08pm Mar 21, 2016 6:08pm
Quoting The Fool
I filled a SPY calls calendar - Apr/Apr4 $212 @ 13c
Calendars/diagonals are the way to go here if you're itching to play something ... . Me, think I'm a gonna wait a bit ... . Still have a few setups on, and it's a good time to attempt to clean those buggers up before moving into anything else ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,434
  • Mar 21, 2016 6:12pm Mar 21, 2016 6:12pm
Probs not going to play this, but I may change my mind:

NKE announces earnings tomorrow after market close, so look to put one of these puppies on in the waning hours of the NY session:

April 15th 56.5/60/69/72.5 iron condor
Probability of Profit: 61%
Max Profit: $100/contract
Buying Power Effect/Risk: $250/contract; Defined Risk
Break Evens: 59/70

The alternative:

April 1st 60/70 short strangle
Probability of Profit: 73%
Max Profit: $100/contract
Buying Power Effect/Risk: $846/contract; Undefined Risk
Break Evens: 59/71
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,435
  • Mar 21, 2016 10:51pm Mar 21, 2016 10:51pm
https://www.yahoo.com/finance/news/p...161923905.html
NEED to shop these ER trades coming up before iv starts ramping up
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,436
  • Mar 22, 2016 12:48am Mar 22, 2016 12:48am
Simple question but hopefully someone can solve for me

Mini Dow

Sold Call options : 17050
Receives Premium : 98
Expired : 17,557.3
Contracts Sold: 2

Brokers charged me USD 5,070.30. Is that correct?

How much exactly I loss on this trade when I go for exercise? Anybody have the answers?
  • #12,437
  • Mar 22, 2016 12:51am Mar 22, 2016 12:51am
By the way, I thought I only loss USD 4,093.00 on this trade. Shouldn't it be calculate as 17050 + 98 = 17148 - 17557.3 = 409.3 x USD 10 for 2 contracts = USD 4093.
  • #12,438
  • Mar 22, 2016 9:40am Mar 22, 2016 9:40am
Sold NKE April 15th 56.5/60/69/72.5 for a 1.03 credit.

I generally don't like to go this far out in time for an earnings play, but just couldn't get the strikes I wanted for the longs closer in time ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,439
  • Mar 22, 2016 9:46am Mar 22, 2016 9:46am
Quoting ChinaTraderz
By the way, I thought I only loss USD 4,093.00 on this trade. Shouldn't it be calculate as 17050 + 98 = 17148 - 17557.3 = 409.3 x USD 10 for 2 contracts = USD 4093.
The short call increased in value into expiration, so even though you got a .98 credit on the front end of things, it's value was different at expiration, so you'll have to include that in your equation. Also, there was probably an assignment fee of some kind ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,440
  • Mar 22, 2016 9:49am Mar 22, 2016 9:49am
One of my short-term engagement trades to pass the time:

RUT April 1st 1055/1065/1120/1130 iron condor. Looking for a fill at 2.60-ish.

You have to fiddle mightily with getting a fill at the mid; price will dance +/- .10 cross it ... .
Fireworks are fun ... as long as you don't blow your fingers off.
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