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Let's Trade Options

  • #13,561
  • Jun 21, 2016 6:51pm Jun 21, 2016 6:51pm
Quoting The Fool
... I am trying to close VXX put spreads now - some are going off around 3 bag - these are things like: Jun 24/Jul 15 $17...
You may recall that I have some of those too, TF. I have a couple of newbie questions, if you don't mind:

1) When does the put actually expire on the 24th? I'm assuming it's at the and of the US session, and not the beginning?

2) Would you consider holding it until the 24th (once we know the results)? Or would you try to close it on the 23rd, just to be safe? I know it depends on what the price is, but let's assume it's still itm by end of session on the 23rd, and the referendum results aren't in yet.

Cheers,
NT
You reap what you sow.
  • #13,562
  • Jun 21, 2016 6:52pm Jun 21, 2016 6:52pm
Quoting ZebraSquirl
{quote} Just my two cents, but I generally avoid trading on the basis of where the call side/put side action is. It's usually uninformative for several reasons, one of which is that they may be positioning for something peculiar to their portfolio; something neither you nor I can see easily from just looking at strike volume. For instance, they may be selling call side to reduce cost basis; they've got a particular volume of underlying to deal with; if it's large, there will be a large number of offsetting calls to cover ... . Naturally, some crap...
Thanks for your input. Somewhat agree and disagree. But the last 2 times I have witnessed this price action; it worked in my favor. Maybe not so favoritism this time yet I found it difficult sitting on the sidelines. I was debating a straddle but the call side appeared to demonstrate some higher activity last few hours and felt the need to get in. Whatever happens the next few days, I'm holding to see what demonstrates next week. Their really is not much in the economic calendar holding the markets green for long.
  • #13,563
  • Jun 21, 2016 8:02pm Jun 21, 2016 8:02pm
Quoting NorthTrader
{quote} You may recall that I have some of those too, TF. I have a couple of newbie questions, if you don't mind: 1) When does the put actually expire on the 24th? I'm assuming it's at the and of the US session, and not the beginning? 2) Would you consider holding it until the 24th (once we know the results)? Or would you try to close it on the 23rd, just to be safe? I know it depends on what the price is, but let's assume it's still itm by end of session on the 23rd, and the referendum results aren't in yet. Cheers, NT
http://www.cboe.com/products/optionsonetfs.aspx

Hey, North - you can check the CBOE website for any options product - find the "specifications" tab to find info about expiry, etc:

Options on Exchange Traded Products (ETPs) Product Specifications
Underlying: Generally, 100 shares of one of the exchange-traded products (Exchange-Traded Fund - ETF; or Exchange-Traded Note - ETN) above.
Strike Price Intervals: Minimum strike price intervals of not less than 1 point are permissible if the strike price is equal to or less than $200. When the strike price exceeds $200, strike price intervals will be no less than 5 points.
Strike (Exercise) Prices: In-, at- and out-of-the-money strike prices are initially listed. New series generally will be added when the underlying shares trade through the highest or lowest strike price available.
Expiration Date: The third Friday of the expiration month.
Expiration Months: Generally, two near-term months and two months from a January, February or March quarterly cycle (e.g., March cycle - March, June, September and December). LEAPS may also be available.
Last Trading Day: Trading in Options on ETPs will ordinarily cease at the close on the business day (usually a Friday) preceding the expiration date.
Exercise Style: American - Equity options generally may be exercised on any business day up to and including on the expiration date.
Settlement of Option Exercise: Physical Delivery. Exercise notices properly tendered on any business day will result in delivery of ETP shares on the third business day following exercise.
Margin: Uncovered writers must deposit 100% of the options proceeds plus 15% or 20% of the aggregate contract value (current ETP price multiplied by $100) minus the amount by which the option is out-of-the-money, if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate contract value. Long puts or calls must be paid in full.
Position Limits: For position limits on Options on ETPs, visit the Options Clearing Corporation's web site.
Trading Hours for Options on ETPs and Indices:
Click here for the close times for individual Options on ETPs and Indices


....I am pretty sure expiry for VXX options would be the Friday close. I closed the Jun24/Jul15 $20 put calendar today for 20c net out. The only way I would let this calendar run to expiry is if the short leg is otm and I thought VXX would fall in the remaining time. That is one reason for putting on the trade in the first place. In this case, I didn't think VXX >$20 by Friday was a real safe bet, glad to make 20c....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,564
  • Jun 21, 2016 8:27pm Jun 21, 2016 8:27pm
I have a few Jun24/Jul01 put calendar spreads, nothing lower than $17...I will be looking to close them Wed-Thurs
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,565
  • Jun 21, 2016 9:01pm Jun 21, 2016 9:01pm
still have a shot at glory, best chance is via VXX bull call calendars - if they could get on their back legs and ride a vol spike into the 1st week of July, I could finally be happy
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-06-21_1858vxxvxxx.png Size: 61 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,566
  • Jun 21, 2016 9:57pm Jun 21, 2016 9:57pm
Quoting The Fool
Hey, North - you can check the CBOE website for any options product - find the "specifications" tab to find info about expiry, etc
Thanks for the trouble Fool-sensei. I've also found the info on my Interactive Broker's trading platform, as below:
Attached Image

Seems like you can trade it right up until Friday close if you want.

Quoting The Fool
The only way I would let this calendar run to expiry is if the short leg is otm and I thought VXX would fall in the remaining time. That is one reason for putting on the trade in the first place. In this case, I didn't think VXX >$20 by Friday was a real safe bet, glad to make 20c....
Yeah, I see what you mean. My $17 put spread is also in profit so I might just take that off tonight (Wed morning US time). Was really hoping to have the long put on for the "remain" scenario but seems it's not to be

Quoting The Fool
still have a shot at glory, best chance is via VXX bull call calendars - if they could get on their back legs and ride a vol spike into the 1st week of July, I could finally be happy {image}
Yep, I'm gunning for you! I still have a few long July calls which might yet make me smile. Let's see!

Do you have much on in the opposite direction? I'm fairly happy with what I've got at the moment (mostly USO and N225), and a bit stretched after buying that N225 whopper, so apart from closing my $17 put spread I'm going to sit it out now and see what happens.

Thanks very much! It's a real pleasure participating in this great thread
You reap what you sow.
  • #13,567
  • Jun 21, 2016 11:52pm Jun 21, 2016 11:52pm
Quoting peterdrill
{quote} Thanks for your input. Somewhat agree and disagree. But the last 2 times I have witnessed this price action; it worked in my favor. Maybe not so favoritism this time yet I found it difficult sitting on the sidelines. I was debating a straddle but the call side appeared to demonstrate some higher activity last few hours and felt the need to get in. Whatever happens the next few days, I'm holding to see what demonstrates next week. Their really is not much in the economic calendar holding the markets green for long.
Never let me talk you out of something that's worked for you ... . Cash is king ... . I'm a mere Prince ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,568
  • Jun 22, 2016 12:03am Jun 22, 2016 12:03am
Quoting ZebraSquirl
{quote} Never let me talk you out of something that's worked for you ... . Cash is king ... . I'm a mere Prince ... .
Thanks yet already in for the run (up or down). Should be exciting either way. Still in belief for a Brexit. Only the media says otherwise.
  • #13,569
  • Jun 22, 2016 3:38am Jun 22, 2016 3:38am
In case anyone missed it.............http://news.google.com/news/url?sa=T...lVpC6uv68cTg7A

Last week more of the same pattern happened just before it went up 20-30%
  • #13,570
  • Jun 22, 2016 3:58am Jun 22, 2016 3:58am
Quoting peterdrill
In case anyone missed it.............http://news.google.com/news/url?sa=T...lVpC6uv68cTg7A Last week more of the same pattern happened just before it went up 20-30%
what a cash cow
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,571
  • Jun 22, 2016 4:00am Jun 22, 2016 4:00am
Quoting The Fool
{quote}what a cash cow
My thoughts exactly.
  • #13,572
  • Jun 22, 2016 5:46am Jun 22, 2016 5:46am
Brexit: I discovered that most of the people wishing for Brexit are Senior Citizens, military and blue collar workers. What majority (percentage) they are, I am uncertain. Both X and Y generation do not favor.
  • #13,573
  • Jun 22, 2016 10:36am Jun 22, 2016 10:36am
Quoting Cecil Gee
{quote} Might be forced to buy puts near the end of today on SPY or DIA for friday and next weeks expiry
started
  • #13,574
  • Jun 22, 2016 10:40am Jun 22, 2016 10:40am
[quote=Cecil Gee;8992238][quote=Cecil Gee;8992009]{quote} Might be forced to buy puts near the end of today on SPY or DIA for friday and next weeks expiry[/quote IN for Friday expiry plus next week long vertical puts ready now for bear action[/quote]

so far it looks it may just happen
  • #13,575
  • Edited 1:37pm Jun 22, 2016 11:29am | Edited 1:37pm
Quoting Cecil Gee
started
Cecil, I'm on the same page. I was shopping bearish spreads at the open and I have not had time to check and see what filled. This run-up in equities since last week has smelled fishy to me though. Ditto the disparity between the opinion polls and the bookmakers' odds. It just had the taint of a bull trap to me. We'll be finding out soon enough....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,576
  • Jun 22, 2016 2:36pm Jun 22, 2016 2:36pm
I am closing some Jun 24 VXX and UVXY spreads here at the close with this nice little squirt of vol, decent profits and who knows if it may not be my last chance? Lots left running, though, geez...all the way out to Sept....I guess I went a little nuts.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,577
  • Jun 22, 2016 9:26pm Jun 22, 2016 9:26pm
Once the Brexit vote is in, markets more likely to move swiftly upwards and testing new highs. That should not last for long. After that, investors will concentrate on the economy. Then we should see markets drop to new levels for the year. This is my take anyways and I will position myself such as.
  • #13,578
  • Jun 22, 2016 10:33pm Jun 22, 2016 10:33pm
Quoting peterdrill
Once the Brexit vote is in, markets more likely to move swiftly upwards and testing new highs. That should not last for long. After that, investors will concentrate on the economy. Then we should see markets drop to new levels for the year. This is my take anyways and I will position myself such as.
Well, we'll see, huh? And you've got the right idea: a trader has to keep moving forward, like a shark. There are more good opportunities for all kinds of trades, right around the bend.

Been a real roller coaster ride, trading vol around this Brexit date, and now it's right here. I have learned some things about trading the vol instruments, and, as always, I have learned some things about the trader me. I had huge gains I could have banked with a few mouse clicks, a week ago when the ^VIX spiked, but I elected to stay on, and here I am. Was it a mistake? With 20/20 hindsight, sure, but I doubt I would do anything different in the same scenario. Those spikes were brief and really only gave me a few hours to act. Water under the bridge now, I need to focus on managing what I have on and think about the next hunts. I took trades with Jun 24 expiries off today @ small profits, a few more remain:

The UVXY put diagonal shown I could make a few bucks on a nice finish Fri, but I really want UVXY to close the week safely north of $10, so the $9 puts run into next week and guard the basement door. It only cost 4c to put on but it could return >$1.00 if UVXY crashes below $8 next week....
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2016-06-22_2028uvxy1.png Size: 72 KB
Click to Enlarge Name: 2016-06-22_2029uvxy2.png Size: 72 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,579
  • Jun 22, 2016 11:08pm Jun 22, 2016 11:08pm
For Jun 24 in this little account I have VXX Jun24/Jul01 $18.5 calendar calls and Jun 24 $17/$20 vert calls.....long vol trades I tried to close today but did not quite get what I wanted. In the hole 30c on this combo and a vol rush could get me near $1 net out if it sent VXX to $17 by Friday. Sadly, I will take something a little better than b/e on this now if VXX is gonna fall to close the week....
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-06-22_2102vxx1.png Size: 89 KB
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,580
  • Jun 22, 2016 11:22pm Jun 22, 2016 11:22pm
Quoting The Fool
For Jun 24 in this little account I have VXX Jun24/Jul01 $18.5 calendar calls and Jun 24 $17/$20 vert calls.....long vol trades I tried to close today but did not quite get what I wanted. In the hole 30c on this combo and a vol rush could get me near $1 net out if it sent VXX to $17 by Friday. Sadly, I will take something a little better than b/e on this now if VXX is gonna fall to close the week.... {image}
Anything is possible. Your strike would have been better next week, but you never know. Markets spike upwards today, but they may fall apart at late trading or even Friday morning. There is nothing else pushing the markets to new highs. And in the forecast for next quarterly reports, will send the markets to its lows of the year. So I'm long on calls for VXX and UVXY and short on SVXY. I'll probably get burnt today but these VIX options can easily change in no time. If I remember well, last year in August UVXY highest daily gain was 75% equity (no sure about the date) - options were 4x that.
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