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Let's Trade Options

  • #12,661
  • Apr 8, 2016 7:17pm Apr 8, 2016 7:17pm
Quoting The Fool
.....spoos maybe close down 20, maybe less, flattish week, good weather for watching theta help your credit spreads, or bleed your debit spreads, anyway, just so sick of sideways market, how many years must I endure this boredom? Have a nice weekend.....
Gawd. Looks like I'm a gonna have to work earnings ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,662
  • Apr 9, 2016 7:15pm Apr 9, 2016 7:15pm
Quoting ZebraSquirl
{quote} Gawd. Looks like I'm a gonna have to work earnings ... .
Well, there's still some time until the "quality" earnings plays (at least for options) pop to the fore ... . NFLX announces on 4/18, which is a mere 9 days away -- the first of the "goodies" that I've always played. There maybe others that pop to the front but some of the other well-knowns just generally aren't frisky enough IV wise to make them generally worthwhile (IBM, MS). Just will have to look at names as they come up in the announcement queue for a thumbs up or down ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,663
  • Apr 9, 2016 7:23pm Apr 9, 2016 7:23pm
Quoting The Fool
{quote} speaking of patience, the City banks keep sliding down into the open maw of impending Brexit.....still room to slide.....then bounce when the Brexit fails......now you can buy Sep BCS $13 calls for a dime, $11/12 bull calls for a nickel....but maybe do much better in May....? {image}
Or ... DB, ja:

Attached Image (click to enlarge)
Click to Enlarge Name: DB DAILY.jpg Size: 121 KB


Option expiries aren't exactly abundant, however ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,664
  • Apr 10, 2016 3:25am Apr 10, 2016 3:25am
Quoting ZebraSquirl
{quote} Or ... DB, ja: {image} Option expiries aren't exactly abundant, however ... .
well, maybe...my premise has to do with the UK banks rebounding after the Brexit ref fails....but banks stocks are down everywhere, ZIRP everywhere, perhaps Brexit failure would not be such a catalyst if all else remains the same......them dogs might stay beat down for years
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,665
  • Apr 10, 2016 3:44pm Apr 10, 2016 3:44pm
Next week remains kind of premium selling wasteland (I've already got stuff on in EWZ, the sole nonearnings contender for something that's got some vol in it).

I've got one short DTE setup to dispose of -- a RUT IC. Other than that, don't want to pile into much unless we either get a VIX cave in or a ginormous VIX pop, particularly ahead of earnings. So, a schnoozer as it stands right now ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,666
  • Apr 11, 2016 3:15am Apr 11, 2016 3:15am
futures pointing to a little bullish action to open the week for US equities....maybe we can see something with conviction, spoos > 2080 by Friday....? ....couple weeks of sideways pa is enuf....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,667
  • Apr 11, 2016 6:04pm Apr 11, 2016 6:04pm
Quoting The Fool
couple weeks of sideways pa is enuf....
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,668
  • Apr 11, 2016 7:58pm Apr 11, 2016 7:58pm
Choppity sloppity. Basically, sideways for days in this range box, with the floor being more clearly defined than the ceiling:

Attached Image (click to enlarge)
Click to Enlarge Name: SPX 4H.jpg Size: 150 KB


Could chop around in here indecisively for days, with any one of a number of earnings motivating movement ... .

VIX up to 16.26, so still hand sitting on another VXX sub-17.5-ish long setup ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,669
  • Apr 11, 2016 8:02pm Apr 11, 2016 8:02pm
Screw it. Going to layer on a bit more "Brazilian", since it's basically the only nonearnings premium selling play out there worth anything (IVR 95/IV 59), and it's not often than you can get a $100+ credit on anything less than $50/share.

EWZ May 27th 22.5/31.5 short strangle
Probability of Profit: 73%
Max Profit: $104/contract
Buying Power Effect: ~$274/contract
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,670
  • Apr 12, 2016 9:38am Apr 12, 2016 9:38am
Quoting ZebraSquirl
Screw it. Going to layer on a bit more "Brazilian", since it's basically the only nonearnings premium selling play out there worth anything (IVR 95/IV 59), and it's not often than you can get a $100+ credit on anything less than $50/share. EWZ May 27th 22.5/31.5 short strangle Probability of Profit: 73% Max Profit: $104/contract Buying Power Effect: ~$274/contract
Filled for a $104 credit. I'll look to take it off at 50% max.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,671
  • Apr 12, 2016 9:47am Apr 12, 2016 9:47am
Bought to cover April 15th RUT 1110/1135 short call vertical for a $131 debit.

This is part of an April 15th RUT 1060/1080/1110/1135 iron condor. The short call side was worth $719 in credit, I closed it out for $131, realizing a $588 profit/contract on that side (minus fees/commissions).

With only a couple of DTE, I'm hoping that the trading gods will be with me and keep price above that 1080 strike. I ordinarily don't like waiting until "the last minute" to roll these, but it's the only setup I need to deal with this week ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,672
  • Apr 12, 2016 10:17am Apr 12, 2016 10:17am
That was quick: bought to cover April 15th RUT 1060/1080 for a $108 debit (about 50% max). The side was worth $228, so booked a $120/contract profit on that side.

I would note that closing this setup out for a $700/contract profit or so isn't as "sexy" as it looks, since it was not an "original" setup. It involved a couple of rolls that I got credits for, but when you roll an underwater side, you realize a loss for that, so it's important to paw through your trade chain from beginning to end, making sure that you're exiting profitably or at least for less of a loss than you would have experienced were to have just shut the whole thing down ... . Otherwise, you may be exiting the current setup profitably but not net profitable for the original setup plus any rolls you've done ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,673
  • Apr 12, 2016 10:44am Apr 12, 2016 10:44am
Throwing some change in possible strong finish of the week, bullish into the opex, and all...
And, some OIL deal again, you can read about it everywhere, Saudis and Russians...

So, I had add to my current bullish hedge poistions, IWM 112/112.50 and 112/113 call spreads, payed 6c and 9c for those.
In case of a /ES bullish breakout, these should follow.
Or this PA today is just another joke... /NQ WAS very weak, and than booom! 50 points in your face...
Range on /ES is 2026 - 2070 and it should break out of there soon.
Hope is dangerous in this game.
  • #12,674
  • Apr 12, 2016 1:43pm Apr 12, 2016 1:43pm
Quoting StrayDog
Throwing some change in possible strong finish of the week, bullish into the opex, and all... And, some OIL deal again, you can read about it everywhere, Saudis and Russians... So, I had add to my current bullish hedge poistions, IWM 112/112.50 and 112/113 call spreads, payed 6c and 9c for those. In case of a /ES bullish breakout, these should follow. Or this PA today is just another joke... /NQ WAS very weak, and than booom! 50 points in your face... Range on /ES is 2026 - 2070 and it should break out of there soon.
I look at it as another opportunity to add in short call credit spreads north of 212, but I'm heavily short delta, so what I actually need is some weakness to balance ... . Ugh.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,675
  • Apr 12, 2016 1:49pm Apr 12, 2016 1:49pm
Adding in a little bit of index ETF action in IWM, which has the highest IVR of the bunch:

May 20th 102/105/114/117 iron condor
Probability of Profit: 55%
Max Profit: $97/contract
Buying Power Effect: $202/contract

I don't like the POP metric, but I'm trying to eek out 1/3rd the width of the wings in credit. I'll also probably layer on additional setups in the May expiry later on to allow me to "mix and match" spreads or different legs of spreads on exit to increase overall POP.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,676
  • Apr 12, 2016 1:56pm Apr 12, 2016 1:56pm
VXX is poised to break below 18 on this up move. 17.50 would be great (17 even better) for the addition of a long setup in VXX or something comparable in UVXY ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,677
  • Apr 12, 2016 2:06pm Apr 12, 2016 2:06pm
Next week's earnings: NFLX looking juicy, particularly if you can go short strangle. (3.00 at the mid for the standard 1 SD short strangle; April 22nd expiry). YHOO looking like nickels and dimes (.64 for a mid price short strangle). IBM's got the IVR, but not the IV, so I usually pass on that ... .

Looked at STX, but it's an ADR with earnings announcement tentatively scheduled for the 15th. "Tentatively" set announcements are no good for vol contraction plays where you want to put on the setup right before the announcement ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,678
  • Apr 12, 2016 2:07pm Apr 12, 2016 2:07pm
Quoting ZebraSquirl
VXX is poised to break below 18 on this up move. 17.50 would be great (17 even better) for the addition of a long setup in VXX or something comparable in UVXY ... .
Whoop, there it is ... . Sub-18 ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,679
  • Apr 12, 2016 2:52pm Apr 12, 2016 2:52pm
Quoting StrayDog
Throwing some change in possible strong finish of the week, bullish into the opex, and all... And, some OIL deal again, you can read about it everywhere, Saudis and Russians... So, I had add to my current bullish hedge poistions, IWM 112/112.50 and 112/113 call spreads, payed 6c and 9c for those. In case of a /ES bullish breakout, these should follow. Or this PA today is just another joke... /NQ WAS very weak, and than booom! 50 points in your face... Range on /ES is 2026 - 2070 and it should break out of there soon.
Still a sideways market since Mar opex, fine if you have nice credit spreads to erode, but I don't have enough of those to balance out many directional trades. I have both long and short vol trades of various stripes, and they trade off day by day making and losing money, but if the market just flatlines, they will all be worthless eventually. Saving grace on majority of those is they are out to Jun mostly. I complain, but all accounts are up well this week, and that is mostly because I have a lot of long PBR calls - quite a few at $7 and mostly out to Jul, and the news out of Brazil + oil rally is boosting PBR....

anyway, am losing interest in trading in the flat pa and have too much going on elsewhere - this pretty much a guarantee I will miss the breakout...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,680
  • Apr 12, 2016 8:45pm Apr 12, 2016 8:45pm
Quoting ZebraSquirl
Adding in a little bit of index ETF action in IWM, which has the highest IVR of the bunch: May 20th 102/105/114/117 iron condor Probability of Profit: 55% Max Profit: $97/contract Buying Power Effect: $202/contract I don't like the POP metric, but I'm trying to eek out 1/3rd the width of the wings in credit. I'll also probably layer on additional setups in the May expiry later on to allow me to "mix and match" spreads or different legs of spreads on exit to increase overall POP.
No fill.
Fireworks are fun ... as long as you don't blow your fingers off.
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