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Let's Trade Options

  • #12,721
  • Apr 19, 2016 10:18pm Apr 19, 2016 10:18pm
Thanks, TF.

Awesome screencast and as I visualized it ... . The main thing I like about the setup is the potential for a fairly large profit zone with excellent risk/reward metrics as compared to other setups I've been working VIX products with (short call diagonals with the back month way out in September; pricey mofos on setup).

I may not get every drop of profit out of the thing (since it requires a fairly "perfect finish"), but will probably just set it up to take the whole thing off as a unit at some multiple of the debit paid.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,722
  • Apr 19, 2016 10:23pm Apr 19, 2016 10:23pm
I been trying tofill some Jun/July VXX call calendars. The premise here is 2-fold: maybe we get a ^vix run-up into the June expiry, with the June FOMC and the Brexit referendum near that date. Your calendar may pay well right at expiry in that case. If ^vix is tame up until June expiry, you could let the June calls expire and let the Jul calls run for a month to catch the aftermath of those big events. You could close some in Jun and let a balance run...

If you want to catch something with long Jul calls, it makes sense to pay a little more and set those lower...
Attached Image(s) (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,723
  • Apr 19, 2016 10:44pm Apr 19, 2016 10:44pm
omg. omg, am I over-extended on long vol trades? Shooting for a vol spike a notoriously fickle exercise. We might see market flatline for months, afraid to breathe, smothered by cloying CB bungling but too awash in easy punch to crash. I am putting on bullish SPY call diagonals AND SPY fotm bear call verts to asymmetrically hedge heavy speculative long vol trades. The latter are being set up margin-free, keeping margin open to hedge...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,724
  • Apr 20, 2016 2:15am Apr 20, 2016 2:15am
UNG popped $7 today, first time since mid-Feb. I am looking for pops >$10 in the next 6-10 months....

http://www.bloomberg.com/news/articl...e-u-s-gas-glut
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,725
  • Apr 20, 2016 10:40am Apr 20, 2016 10:40am
Quoting The Fool
I been trying tofill some Jun/July VXX call calendars.
FILLED at 19c & 20c.....will look at calendars down to $25 if VXX keeps dropping.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,726
  • Apr 20, 2016 1:28pm Apr 20, 2016 1:28pm
Quoting ZebraSquirl
{quote} Awesome trade ... . Looking like long vol is currently the only game in town. Passed on what ordinarily are good earnings plays this week because not only did volatility get sucked out of the broader market, it got sucked out of individual underlyings, too ... .
thx guys waiting for earnings to end and IV on the VIX to drop a little then should be the right time to go long on VIX. Go out 9 months to Feb 17 for a big move on VIX long and short S/P and DOW, timing won't be perfect hence the 9 months out from May onwards and it will take the election into account. The options should be very cheap on OTM
  • #12,727
  • Apr 20, 2016 5:47pm Apr 20, 2016 5:47pm
Quoting Cecil Gee
{quote} thx guys waiting for earnings to end and IV on the VIX to drop a little then should be the right time to go long on VIX. Go out 9 months to Feb 17 for a big move on VIX long and short S/P and DOW, timing won't be perfect hence the 9 months out from May onwards and it will take the election into account. The options should be very cheap on OTM
you are wise to give yourself lotsa time - the last 4 years vix trading has been a total snooze, you could have gone broke many times over trying to fish a spike, CB's in control of the markets still and that trend may continue. I think the Brexit referendum, the Fed trying to get off the zirp, the US elections, Greece drama Act ?.x - all are some good instigators....but that doesn't mean we will get anything good. The biggest spike seen in years, the late Aug 2015 yuan devaluation spike, was a bolt from the blue...good luck, Cecil.
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-04-20_1541vix.png Size: 52 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,728
  • Apr 20, 2016 5:55pm Apr 20, 2016 5:55pm
If ^vix keeps sliding I will look to fill VXX Jun/July $25 calendars, add to the $30 calendars I already have. Will not chase above $0.25, though...
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,729
  • Apr 20, 2016 11:47pm Apr 20, 2016 11:47pm
UVXY (oh lord) Jun $12/$9 bull puts gets ya about a buck now.....the last R/S on UVXY was @ $8.09 low last May....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,730
  • Apr 20, 2016 11:54pm Apr 20, 2016 11:54pm
Quoting Cecil Gee
{quote} thx guys waiting for earnings to end and IV on the VIX to drop a little then should be the right time to go long on VIX. Go out 9 months to Feb 17 for a big move on VIX long and short S/P and DOW, timing won't be perfect hence the 9 months out from May onwards and it will take the election into account. The options should be very cheap on OTM
I agree with TF about giving yourself time, which is why I opted for the VXX short call diagonals, with the back month in September with the setups I've got on now, with short strikes at 16, 17, 18, and 21 (I jumped the gun a little bit with the 21 ... ). If we see VXX 15, I may be tempted to use the Jan 17 expiry for my "synthetic long" ... . The unfortunate thing about them is the "entry fee", particularly if you do a back month extremely far out in time and opt for a particularly wide diagonal ... . However, we're getting down into territory here where I think you can go comparatively narrow with the diagonal (I mean, a 10/15 kinda seems insane, but you never know ... ).

I did do a June VXX butterfly (a 16/22/28) that I got filled for a $76 debit. Figured it was something I could contemplate occurring (VXX at 22) while acquainting myself with flies (haven't done many and need to putz before I'm comfortable).

Today's other, modest play: an SLV May 27th 16.5 short straddle (a two lot) that I put on for a $260 credit, which I'll take off at 25% max ... . Something to keep me entertained (IVR was above 70 earlier today; tapered off to 65-ish late in the sesh), without not much else to do besides delta balance a couple of SPY train wrecks that didn't anticipate the depth of this upmove ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,731
  • Apr 20, 2016 11:58pm Apr 20, 2016 11:58pm
Quoting The Fool
UVXY (oh lord) Jun $12/$9 bull puts gets ya about a buck now.....the last R/S on UVXY was @ $8.09 low last May....
Yowsa ... . May have to look at that ... . With all the VXX crap I've got on, it's starting to look like a plate full of spaghetti, so I may have to gander at UVXY to make sure the VXX stuff doesn't get so overwhelming that I miss an expiry or a roll that needs to be done ... . Alternatively, I just need to quit layering crap on ... . Lol.

Course, an R/S mid-options trade would suck hard ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,732
  • Apr 21, 2016 12:03am Apr 21, 2016 12:03am
Quoting The Fool
UNG popped $7 today, first time since mid-Feb. I am looking for pops >$10 in the next 6-10 months.... http://www.bloomberg.com/news/articl...e-u-s-gas-glut
Still working that UNG covered call ... . I've got the cost basis down to about $7/share; figured I'd just hang onto it; see where it goes ... . Some legislation passed today that'll benefit LNG ... . http://oilprice.com/Energy/Energy-Ge...ergy-Bill.html
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,733
  • Apr 21, 2016 12:08am Apr 21, 2016 12:08am
Quoting ZebraSquirl
I agree with TF about giving yourself time, ... .
well, the long-dated long-vol flys work well if you want to put something on that will make some money across a huge range. Like any fly, the maxP only develops near the expiry and around the mid-line of the fly but, with long-dated long-vol flys, the maxP of the P/L is pushed out past the mid-line (early in the fly's life, that is)...... . The returns not great if you get out early, but a big range - if they were cheap to put on you could put on a bunch and take them off over time....the VXX Sept $20/25/30 calls shown at Jun expiry
Attached Image (click to enlarge)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,734
  • Apr 21, 2016 12:14am Apr 21, 2016 12:14am
VXX Sep $25/30/35 a better deal at 11c debit - and you are targeting VXX $30, which seems to be a common spike destination - put on blocks of 10 and take them off as fortune allows....
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-04-20_2212vxx2.png Size: 76 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,735
  • Apr 21, 2016 12:22am Apr 21, 2016 12:22am
loaded the Sep VXX $25/30/35 for 10c - a 20-lot debits $270 and has a maxP of $9,800....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,736
  • Apr 21, 2016 6:34pm Apr 21, 2016 6:34pm
Quoting The Fool
loaded the Sep VXX $25/30/35 for 10c - a 20-lot debits $270 and has a maxP of $9,800....
Bueno, muchacho ... . I'll have to consider slapping a few more of those kiddies on, assuming that VIX doesn't go all cray before I have time to hop on the bus (modest pop today .... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #12,737
  • Apr 21, 2016 6:51pm Apr 21, 2016 6:51pm
Quoting ZebraSquirl
Bueno, muchacho ... . I'll have to consider slapping a few more of those kiddies on, assuming that VIX doesn't go all cray before I have time to hop on the bus (modest pop today .... ).
never filled that fly, sitting there loaded gtc a dime - it went to 12c I tried 11c, now at $0.145....plenty time to get on the long vol bus if that's your poison
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,738
  • Apr 22, 2016 2:45am Apr 22, 2016 2:45am
here's a screencast of me shopping for UVXY Sep wide bull call verts in ToS - it's hunt & peck.....$31/41 for 75c well let's see where it might fill.....I loaded it for 65c.....(maybe I will get ambitious and turn the mic on sometime)

http://screencast.com/t/dJJP9ZjT
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,739
  • Apr 22, 2016 2:43pm Apr 22, 2016 2:43pm
Quoting The Fool
here's a screencast of me shopping for UVXY Sep wide bull call verts in ToS - it's hunt & peck.....$31/41 for 75c well let's see where it might fill.....I loaded it for 65c
might fill for 70c b4 the close.....FILLED
"If The Fool persists in his Folly he will become wise." - William Blake
  • #12,740
  • Apr 22, 2016 3:03pm Apr 22, 2016 3:03pm
sold my SVXY $50/60/70 Jun call flys - in for $1.25 out for $2.95, need the cash for more more more
"If The Fool persists in his Folly he will become wise." - William Blake
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