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Let's Trade Options

  • #13,341
  • Jun 12, 2016 4:03am Jun 12, 2016 4:03am
Quoting The Fool
A ^VIX spike above 25 will probably triple my accounts across the board.
High Hopes....a lot can happen between now and Jul 01....I have big sets of some long VXX calls that have been cut loose from the spreads they were in....the debit on these Jul 01 $17's was <10c....a spike to $30 would get me $10.00....$0.10 to $10.00.....????? ....of course, I would prolly start taking something off at 1/2 of that if it shows....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,342
  • Jun 12, 2016 5:50am Jun 12, 2016 5:50am
Quoting The Fool
{quote}High Hopes....a lot can happen between now and Jul 01....I have big sets of some long VXX calls that have been cut loose from the spreads they were in....the debit on these Jul 01 $17's was <10c....a spike to $30 would get me $10.00....$0.10 to $10.00.....????? ....of course, I would prolly start taking something off at 1/2 of that if it shows.... {image}

I am also hoping ....
Position sizing, risk & phycology management are real definition of trading
  • #13,343
  • Jun 12, 2016 1:44pm Jun 12, 2016 1:44pm
Quoting Cecil Gee
{quote} could be over the weekend there was a significant brexit lead in the polls plus CNY industrial production coming out of china may just have a wider miss tomorrow morning. waiting
I'm thinking it's a combo of things -- little bit of oil weakness, little bit of dollar strength, little bit of risk off in advance of opex/FOMC minutes/Brexit ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,344
  • Jun 12, 2016 2:05pm Jun 12, 2016 2:05pm
Orlando will only exacerbate market volatility....will affect the Brexit vote, because there is a lot of anti-immigrant animus in the mix there....maybe will tighten the US prez election race, also.

Just for the record, I am a speculator and I try to trade the volatility in the markets that is caused by disruptive events in the World. But I am not cackling with glee when there's a massacre or a hurricane or a war breaks out somewhere. My goals include being able to make enough money trading the markets so that I can give the lion's share of those gains to causes that I support. I will continue working toward that.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,345
  • Jun 12, 2016 2:13pm Jun 12, 2016 2:13pm
Quoting The Fool
{quote}High Hopes....a lot can happen between now and Jul 01....I have big sets of some long VXX calls that have been cut loose from the spreads they were in....the debit on these Jul 01 $17's was <10c....a spike to $30 would get me $10.00....$0.10 to $10.00.....????? ....of course, I would prolly start taking something off at 1/2 of that if it shows.... {image}
The hardest thing with these long vol setups: where is the "money, take, run" point? Lol. With the poor man's covered calls, I'm just looking to exit at break even for what I put those on for, my profit being the credits collected on the rolls of the short calls to date, and I've got GTC orders on to do just that. Unfortunately, the profit potential isn't looking very "sexy" for those at this point (25-35% of what I put them on for).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,346
  • Jun 12, 2016 2:26pm Jun 12, 2016 2:26pm
Quoting The Fool
Orlando will only exacerbate market volatility....will affect the Brexit vote, because there is a lot of anti-immigrant animus in the mix there....maybe will tighten the US prez election race, also. Just for the record, I am a speculator and I try to trade the volatility in the markets that is caused by disruptive events in the World. But I am not cackling with glee when there's a massacre or a hurricane or a war breaks out somewhere. My goals include being able to make enough money trading the markets so that I can give the lion's share of those...
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,347
  • Jun 12, 2016 2:56pm Jun 12, 2016 2:56pm
Quoting peterdrill
Anyone have any good options strategy for Monday's open? Looking at UVXY calls and SVXY puts.
That's a toughie ... . I generally use VIX as the guide (UVXY, VXX are subject to contango; SVXY, the inverse) and look to enter trades at VIX extremes rather than attempting to play the middle ... . I'm looking to fade a spike here, but VIX @ 17 isn't exactly the kind of spike I'm looking for:

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As a really crude guideline, I'm looking to fade VIX spikes above 20 (obviously higher is better; 30 would be swell). Watch VIX for these levels and then look to fade via VIX options or options in the derivative instruments (VXX/UVXY (short), SVXY (long)) at whatever levels they're at if you don't want to monkey with VIX options ... . While you can naturally go long puts in VXX or UVXY to fade or long calls in SVXY (since it's an inverse), my tendency is to go with a directional spread of some kind (long put verticals in VXX/UVXY; long calls verts in SVXY), the alternative being calendars or diagonals with a longer-dated back month to give yourself some additional time for the mean reversion to occur ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,348
  • Jun 12, 2016 3:12pm Jun 12, 2016 3:12pm
Quoting ZebraSquirl
{quote} That's a toughie ... . I generally use VIX as the guide (UVXY, VXX are subject to contango; SVXY, the inverse) and look to enter trades at VIX extremes rather than attempting to play the middle ... . I'm looking to fade a spike here, but VIX @ 17 isn't exactly the kind of spike I'm looking for: {image} As a really crude guideline, I'm looking to fade VIX spikes above 20 (obviously higher is better; 30 would be swell). Watch VIX for these levels and then look to fade via VIX options or options in the derivative instruments (VXX/UVXY (short),...
Also need to keep in mind that VIX/VIX derivative IV collapses as price declines, so it may be to your advantage to look to a premium selling setup for the fade (short call credit spreads, call diagonals where you collect premium on the short call, etc.).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,349
  • Jun 12, 2016 4:15pm Jun 12, 2016 4:15pm
I can see why just going long put might be sexy ... . Consider having gotten into some VIX 20 puts during one of these vol spikes we had it seems like eons ago for, like $10/contract. The July's are now worth $340/contract, and that's after this little pop we've had here ... . So your $10/contract is now worth $340 ... . Multiply that by a few contracts, and that's good money. So I could see just going long a few VIX 20 puts for cheap (if we get that; it'll have to go "a bit" higher from here) in an expiry with enough time for a sub-20 mean reversion ... .

But when's the last time we saw VIX 20 puts at $10? Lol.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,350
  • Jun 12, 2016 7:27pm Jun 12, 2016 7:27pm
Quoting The Fool
Just for the record, I am a speculator and I try to trade the volatility in the markets that is caused by disruptive events in the World. But I am not cackling with glee when there's a massacre or a hurricane or a war breaks out somewhere. My goals include being able to make enough money trading the markets so that I can give the lion's share of those gains to causes that I support. I will continue working toward that.
Well said, TF. This reminds me a bit of Jesse Livermore's attitude in October 1907. He'd already made over a million dollars selling stocks short during the crash, and now there were no buyers left. He imagined how much more he could make if he entered huge sell orders right then - with hardly anyone left to buy the price would drop like a stone almost to zero. But compassion and patriotism took over, and instead of selling more he bought a shitload instead. This was despite having little sympathy for the big bankers who helped caused the crash in the first place (ha ha... sounds familiar?). Anyway, his actions helped to kick-start the recovery. So yes, shit happens, and people are going to suffer for it. That doesn't mean that speculators should just walk away from it, particularly if what we gain can help the people who are suffering.
You reap what you sow.
  • #13,351
  • Jun 12, 2016 8:08pm Jun 12, 2016 8:08pm
I don't want to be Jesse Livermore.

http://www.nytimes.com/2001/09/09/bu...l-elusive.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,352
  • Jun 12, 2016 9:44pm Jun 12, 2016 9:44pm
Quoting ZebraSquirl
{quote} Interesting stuff ... . Corporate repurchases of stock, however, are subject to regulation and easily locateable if you know what to look for. Unfortunately, very few people know what a 10-Q or 10-K is; fewer really want to read through the whole thing ... . https://corpgov.law.harvard.edu/2013...e-repurchases/ My take is that the vast majority of companies think that these repurchases add value to their stock in the eyes of potential investors, so they usually gush about how much stock they're buying...
Thanks for this informative post. (Sorry if I digressed too far from the subject of options trading in my earlier posts, BTW.)

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HELL IS EMPTY, ALL THE DEVILS ARE HERE. -- Shakespeare
  • #13,353
  • Jun 12, 2016 11:30pm Jun 12, 2016 11:30pm
Quoting blunderbuss
Thanks for this informative post. (Sorry if I digressed too far from the subject of options trading in my earlier posts, BTW.)
it's not a problem really, bb, at least your posts have been interesting. I really do want to keep this a place for options traders, though, and I make that point to most everyone who makes random posts here, not just you. FF is a big place and there are lots of threads with lots of different kinds of content - plus a member can start their own thread for their own purposes, if they like.

I hope some other options traders won't be too shy to post here, even if they are a beginner. I was m/l a beginner when I started the thread. I have even started trying to poach some of the traders who post on the UVXY and other Yahoo message boards. No luck yet.

On the other hand, I am starting to build up some pretty complicated books and I might be better off just concentrating on trading, rather than blogging about it. Or if need to blog, maybe I should start a website and cultivate some income from it - I could even sell "signals" or otherwise get people to pay me to tell them what to trade, have links to ads, sell e-books and videos, do getaway seminars at resorts in sunny lands, etc.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,354
  • Jun 12, 2016 11:41pm Jun 12, 2016 11:41pm
I see three red weekly candles for /ES, but they don't cover much - last week's doji was almost dead flat. If we are getting into true "risk-off" market tone we should see some of them 100-pt red slabs like you see there in the last couple months of 2015. How about a break below 2,025 this week to prove the bears can still get down?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,355
  • Jun 12, 2016 11:41pm Jun 12, 2016 11:41pm
/ES down 9, 10 handles here; DXY fairly flat; oil off 1.12% ... . Can we have some continuation for a change and not have this all given up in late Asian/early Euro sesh's, please?
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,356
  • Jun 12, 2016 11:55pm Jun 12, 2016 11:55pm
Quoting ZebraSquirl
/ES down 9, 10 handles here; DXY fairly flat; oil off 1.12% ... . Can we have some continuation for a change and not have this all given up in late Asian/early Euro sesh's, please?
word. I bought a Jun $199/195/191 put fly for <20c as I recall, and rolled up the $191's to $199 when SPY was thrusting into the ath funk...it needs a drop to <$202 to make some decent money....if it looks dicey I will get a little back rolling up the short $195 to $198 or maybe even $200...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,357
  • Jun 12, 2016 11:56pm Jun 12, 2016 11:56pm
Quoting The Fool
{quote} pretty complicated books
Ohh, I hear ya, man. Life was a lot simpler when I was just working the one SPY covered call IRA account ... . But noooo, had to get another account to add in some more covered call action, and then some TastyTrade type trades, and then some long vol setups ... . Got a plate of spaghetti on my hands now; there's noodles all over the place, and I find it hard to whittle down, flatten ... . It's literally taken on a life of its own ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,358
  • Jun 13, 2016 12:02am Jun 13, 2016 12:02am
Quoting The Fool
{quote}word. I bought a Jun $199/195/191 put fly for <20c as I recall, and rolled up the $191's to $199 when SPY was thrusting into the ath funk...it needs a drop to <$202 to make some decent money....if it looks dicey I will get a little back rolling up the short $195 to $198 or maybe even $200... {image}
Say, I know there's a way to do this on ToS, but I kind of suck at all the tools there. Is there a way to model what price VIX would have to be at in order to have the 20 put be at .10? I know it's gotta be above $25 (he says, unsure of himself).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,359
  • Jun 13, 2016 12:16am Jun 13, 2016 12:16am
Quoting blunderbuss
{quote} Thanks for this informative post. (Sorry if I digressed too far from the subject of options trading in my earlier posts, BTW.) {image}
Okay, wait a sec ... . They painted this chick's jugs on with ... body paint?! Lol.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,360
  • Jun 13, 2016 12:19am Jun 13, 2016 12:19am
Quoting ZebraSquirl
Say, I know there's a way to do this on ToS, but I kind of suck at all the tools there. Is there a way to model what price VIX would have to be at in order to have the 20 put be at .10? I know it's gotta be above $25 (he says, unsure of himself).
which 20 put? The Jun 15?
"If The Fool persists in his Folly he will become wise." - William Blake
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