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Let's Trade Options

  • #13,041
  • May 20, 2016 2:29am May 20, 2016 2:29am
ZS, do you get these daily notes? - TP is a premium seller, like you...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,042
  • May 20, 2016 3:07am May 20, 2016 3:07am
Quoting The Fool
....it looks like (milagros!) USO could pin $12 tomorrow, expiry day, and those could net back 40c+.....
Here's hoping! I've been long USO a while now (ETF, not options). Keep wondering whether to take some off or not. Maybe at $12. Congratulations on your trade TF!
You reap what you sow.
  • #13,043
  • May 20, 2016 11:58am May 20, 2016 11:58am
out for 28c net on all USO calendars, a net 4-bagger, bastards couldn't cut me a break and pin $12.....but I can't complain....just holdin RIG and PBR call calendars for some long term oil rally continuation
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,044
  • May 20, 2016 2:26pm May 20, 2016 2:26pm
Quoting The Fool
I am loading variations of the trades shown on this page, ....AAPL $80/$105 DC, safe from near $70 til near $120, holy cow a $50 profit zone.....get sum....
filled the puts, the calls ran away from me, no big rush there, will try next week....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,045
  • May 20, 2016 4:00pm May 20, 2016 4:00pm
Quoting The Fool
...excruciating watching the do-nothing market do nothing.....
another weekly 50c doji for SPY.....we might see this run all the way to June FOMC.......
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,046
  • Edited 8:34pm May 20, 2016 7:45pm | Edited 8:34pm
Bought to close SPY 197/201 short put vertical.

With 7 days to go, I'm closing this iron condor wing at 50% max profit ($24/contract), leaving me with the short call wing (the short option of which is at 208) to deal with going into expiration.

Because the short call side is a rolled spread for which I paid a debit, I'm looking to get out of that side at near max ... .

Naturally, I'll roll that side again and sell an oppositional side against to finance it or otherwise delta balance it.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,047
  • May 20, 2016 7:46pm May 20, 2016 7:46pm
Sell in May is a myth, like the yeti, or the chupacabras....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,048
  • May 20, 2016 7:51pm May 20, 2016 7:51pm
http://jlfmi.tumblr.com/post/1446749...r-in-the-stock

flattest market in 20 years, 2nd flattest ever...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,049
  • May 20, 2016 7:51pm May 20, 2016 7:51pm
Quoting The Fool
ZS, do you get these daily notes? - TP is a premium seller, like you... {image}
Yeah, I do. But I almost never check the email address they're sent to ... . Lol. May look at an SPX iron condor next week, but VIX ended today on a total "weak sauce" note, and I'm not sure I want to overweight that Brexit/FOMC expiration area with index ETF setups (I have some; but no more than the usual). Post opex always seems to be a little odd for a few days as traders take new positions, so we'll see ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,050
  • May 20, 2016 7:58pm May 20, 2016 7:58pm
Quoting The Fool
Sell in May is a myth, like the yeti, or the chupacabras.... {image}
I read that "sell in May" narrative in numerous articles describing "bullishness muted by 'sell in May' pressure" ... . That may be true or it may be that we're just in a long-ass sideways market (Cramer says we're not, but he's on crack ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,051
  • May 20, 2016 8:19pm May 20, 2016 8:19pm
Rolling June 20th VXX 17.5 short call to July 1st 17.

This is part of a poor man's covered call setup in VXX, the back month of which is a September VXX 12 long call.

I'm being somewhat mechanical here in rolling the 17.5 short call to the July 1st 75% probability out-of-the-money short call. I say "somewhat mechanical" because the usual thing to do is to wait until the short call is near expiration and then roll it out for another 30 days (assuming you haven't yet taken the whole setup off in profit before then).

The notion here is to have my VXX poor man's covered calls kind of straddle Brexit/FOMC ... . Picked up an additional $56 credit for the roll, further reducing my cost basis in the long. Given the credits I've received so far for the rolls, I'll look to take the entire setup off for what I paid for it ($418/contract). The credits collected for the rolls will be my profit for the setup. (Received $102/contract so far ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,052
  • May 20, 2016 8:21pm May 20, 2016 8:21pm
Quoting ZebraSquirl
Rolling June 20th VXX 17.5 short call to July 1st 17. This is part of a poor man's covered call setup in VXX, the back month of which is a September VXX 12 long call. I'm being somewhat mechanical here in rolling the 17.5 short call to the July 1st 75% probability out-of-the-money short call. I say "somewhat mechanical" because the usual thing to do is to wait until the short call is near expiration and then roll it out for another 30 days (assuming you haven't yet taken the whole setup off in profit before then). The notion here is to have my VXX...
Downside presently is that the September 12 long call has decreased in value, so I'm $20/contract under water with that setup currently ... . Poppage is required to exit .. .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,053
  • May 20, 2016 8:24pm May 20, 2016 8:24pm
Quoting The Fool
out for 28c net on all USO calendars, a net 4-bagger, bastards couldn't cut me a break and pin $12.....but I can't complain....just holdin RIG and PBR call calendars for some long term oil rally continuation
Congrats .. . I obviously bailed on my USO position wayyyyyyy too early (don't have the heart to go back and look at when). Seriously didn't think it would continue to rip to the upside after Doha. Guess there's speculation goin' on in them there hills ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,054
  • May 20, 2016 8:32pm May 20, 2016 8:32pm
Quoting The Fool
ZS, do you get these daily notes? - TP is a premium seller, like you... {image}
I actually have warmed up to SPX over time (as well as RUT and on the occasions my nuts grow out, that monster NDX). The instruments are somewhat finicky on fill (price will swing across the mid +/- .10 easily due to the size of the instruments), but they settle to cash, and there's none of that assignment risk nonsense you have with SPY, IWM, DIA, and QQQ. The key with SPX is to scale the trade using the width of the wings (which are in $5 increments) ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,055
  • May 20, 2016 8:48pm May 20, 2016 8:48pm
Quoting The Fool
ZS, do you get these daily notes? - TP is a premium seller, like you... {image}
Ohhh, he's that goofball that only sells a 70% OTM SPY put every month after opex (they usually bring in about $125 or so in credit). Do or die, he runs them into expiration, either allowing them to expire worthless or taking the hit if they ain't gonna rather than rolling ... . Seems like a recipe for at least a couple of major owies a year ... . I'm sure he's got band-aids for that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,056
  • May 21, 2016 11:13pm May 21, 2016 11:13pm
Quoting The Fool
http://jlfmi.tumblr.com/post/1446749...r-in-the-stock flattest market in 20 years, 2nd flattest ever...
zzzzzzzzzz....just shopping around cheap Jun & Jul VXX spreads to hedge all my long vol trades built up in the last months....put calendars mostly...I can't really imagine anything happening that could move the markets ever again....if anything is left of my accounts this Summer I am going to liquidate and take up a more wholesome hobby.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,057
  • May 22, 2016 10:02am May 22, 2016 10:02am
One of the last workable earnings plays this season:

BBY announces earnings on 5/24 (Tuesday) before market open, so look to put on a play shortly before Monday's NY close to take advantage of the implied volatility crush that commonly occurs post-earnings announcement. Here's the preliminary setup, since price may move during the NY session, requiring slight adjustment of the strikes:

BBY June 3rd 29.5/35 short strangle
Probability of Profit: 71%
Max Profit: $104/contract
Max Loss/Buying Power Effect: Undefined/~$371/contract

Note: Look to take this off at 50% max profit.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,058
  • May 22, 2016 10:14am May 22, 2016 10:14am
Quoting The Fool
{quote}zzzzzzzzzz....just shopping around cheap Jun & Jul VXX spreads to hedge all my long vol trades built up in the last months....put calendars mostly...I can't really imagine anything happening that could move the markets ever again....if anything is left of my accounts this Summer I am going to liquidate and take up a more wholesome hobby.....
I feel ya, man ... . This is a manic sport. One day, you're feeling great about the positions you've got on, everything's coming together nicely ... . The next, you think everything's a ginormous turd pile ... . Really thought I'd exit some long vol crap last week pre-opex, only to have volatility ebb away running into it, so no dice ... . I'm a patient guy, but don't like waiting in line for long for my ice cream ... . This seems like a lot of waiting in line with screaming kids, an old lady in front of you who wants to write a check ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,059
  • May 22, 2016 10:18am May 22, 2016 10:18am
Could VXX open up an Oct expiration already? I assume it'll be here soon but with VXX hovering around 15-ish, I could see potentially slapping on another one of these long-dated setups, but don't want to do more with a Sept back month and don't really want to go all the way out to Dec either ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,060
  • May 22, 2016 10:24am May 22, 2016 10:24am
The classic 45 DTE 85/75 (short put 85% OTM/short call 75% OTM), bearishly skewed SPX iron condor currently nets one-third the width of the $10 wide wings:

Attached Image (click to enlarge)
Click to Enlarge Name: SPX Classic IC.jpg Size: 145 KB


The buying power effect's about $665/contract ... .
Fireworks are fun ... as long as you don't blow your fingers off.
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