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Let's Trade Options

  • #13,821
  • Jul 7, 2016 8:35pm Jul 7, 2016 8:35pm
Quoting The Fool
I say "risk-free" there - and that can be true if you hit the ratios right.
I will be shorting UVXY after the R/S - off a tall spike if I'm lucky, but I will still try to put on no/low-risk long vol trades with VXX. I prolly won't need to, but I could guard the downside with a cheap VIX (not VXX) (10c) Dec $13/$12 put vert....not completely risk free, but close
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,822
  • Jul 8, 2016 8:08am Jul 8, 2016 8:08am
Quoting The Fool
I will be shorting UVXY after the R/S - off a tall spike if I'm lucky....
I saw list of trades of one trader, and that guy has 285 winners out of 290 trades. His secret, his mojo or whatever is quite simple - vast majority of the wining trades, lets say 95% of them, are short UVXY trades. Fuck it, logical thing... the mofo just constantly goes to single digits, gets revived by reverse split, rinse and repeat... I have read one article recently on SeekingAlpha, and another dude is holding his "core position" of mofo UVXY short, since 2010, or 2011, not sure...

Other shit:

Behaviour of the VIX and its derivates right after Brexit was a huge, huge tell... (market down AND VIX and its shit down also) but I was too bearish to accept that, a lesson learned.

/NQ on the verge of breaking a resistance trend line

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Since this is 4th touch, we could see a break... I would rather see something like FAILED attempt (look above and fail, upthrust, failed breakout - call it what you like). But, market doesn't give a f... what would I like.

Crude is very weak, but market don't give a fuck.
Hope is dangerous in this game.
  • #13,823
  • Jul 8, 2016 10:21am Jul 8, 2016 10:21am
Quoting The Fool
the $13.50 calls went to 32c when VXX rose to >$13.50....I had a 35c gtc on it....pretty sure it missed....will see what tomorrow brings...
re: the VXX strangle - coulda shoulda woulda on the Thursday pop to $13.50.....that was worth a double, but I ended up closing at b/e on Friday's drop to $12.50....what a difference a day makes.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,824
  • Jul 8, 2016 10:41am Jul 8, 2016 10:41am
Quoting StrayDog
I saw list of trades of one trader, and that guy has 285 winners out of 290 trades. His secret, his mojo or whatever is quite simple - vast majority of the wining trades, lets say 95% of them, are short UVXY trades. ............ Other shit: Behaviour of the VIX and its derivates right after Brexit was a huge, huge tell... (market down AND VIX and its shit down also) but .....
YEAH I will be on the lookout for that tell in the future. Short UVXY, sure.....at the rate we are going it will only be $25 after the 1:5 r/split.....I will continue to put long call spread lotto tix on it though, so long as I can get in them for pennies, and always looking at plausible events to set those up on. I am somewhat disillusioned, though, to say the least....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,825
  • Jul 8, 2016 6:36pm Jul 8, 2016 6:36pm
http://www.forbes.com/sites/adamsarh.../#1db359963659

All the arguments for a continuation of the bull arket in US equities are right here in this article. When absolutely everyone is bullish, and you're looking down from the tippy tiptop of the market - that's the time to go long. You don't want to be left behind, do ya? Just buy some stocks. Everything is OK. What could possibly go wrong? That';s right: nothing. Stocks are going up, gold going up, bonds going up, everything is going up. The Fool is somebody who tries to swim against those trends and buys volatility, of all things. What a loser.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,826
  • Jul 8, 2016 6:52pm Jul 8, 2016 6:52pm
Quoting The Fool
http://www.forbes.com/sites/adamsarh.../#1db359963659 All the arguments for a continuation of the bull arket in US equities are right here in this article. When absolutely everyone is bullish, and you're looking down from the tippy tiptop of the market - that's the time to go long. You don't want to be left behind, do ya? Just buy some stocks. Everything is OK. What could possibly go wrong? That';s right: nothing. Stocks are going up, gold going up, bonds going up, everything...
That's usually the case (plan) but this one is fueled on fiction. I lost after the Brexit on volatility believes and now cash. Waiting and standing by until the bull runs out of steam. The article has one advisory claim that stocks are still cheap. I do not see any attractive cheap stocks, and only a few that I would buy maintaining this over aged bull run. But not worth it. Much more room to fall then to climb presently (or the future). Presently partaking as a bystander in the audience and investors gloves are hanging and waiting.
  • #13,827
  • Jul 8, 2016 9:29pm Jul 8, 2016 9:29pm
Quoting peterdrill
Waiting and standing by until the bull runs out of steam.
YEAH, stay frosty, Pete. Something tells me I should keep a few chips in the pot for some long vol action....so I am watching it get cheaper.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,828
  • Jul 8, 2016 9:34pm Jul 8, 2016 9:34pm
I am looking for a weekly income trade, something like the VXX combo below may be good...need to backtest it. Will also look at combining VXX with VIX options. The latter has different expiry, but I can put on VIX trades in Asian Monday before the NY open.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,829
  • Jul 8, 2016 9:36pm Jul 8, 2016 9:36pm
I'd probably run the inverse of the above trade, just to have an open long call to catch something big in the off chance that anything ever spooks the markets again.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,830
  • Edited 10:26pm Jul 8, 2016 9:45pm | Edited 10:26pm
Quoting The Fool
I am looking for a weekly income trade, something like the VXX combo below may be good...need to backtest it. Will also look at combining VXX with VIX options. The latter has different expiry, but I can put on VIX trades in Asian Monday before the NY open.
the combo shown makes money with a net $1 move, either way - (i.e., a $2 range)...the weekly chart shows VXX often has a range above $2, and of course, often much better....you can't always count on putting the trade on so cheap, though...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,831
  • Jul 8, 2016 10:04pm Jul 8, 2016 10:04pm
the VIX puts are a better buy than the VXX ones - but if you put a trade on Friday, the VIX options are already 2 days old, and will expire the following Wednesday - maybe that works out in a combo with VXX, maybe not
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,832
  • Jul 8, 2016 10:17pm Jul 8, 2016 10:17pm
Quoting The Fool
I'd probably run the inverse of the above trade, just to have an open long call to catch something big in the off chance that anything ever spooks the markets again.
everybody likes to go long calls or puts and hit a big winner. The problem is: just going long options is expensive, so you start out in the hole, and they start losing money as soon as you drive them off the lot. You can use spreads to get in a position and still get some straight long options action in the mix, but cheaper. In the first screen shot I am trading 2 VXX call verts for next week: the first is atm, but more expensive than the second, which is further out - so I pile on more of the second. There are optimum ratios of the spreads in these combos, but you just have to play with the modeler to find them. In the second screenshot, I throw on some long calls just in hopes of catching a decent move.....I have bridged out to where the cheap calls are with the first two verticals, so wtf, I don't mind spending a nickel to put those lotto tix on....you never know what the next week will bring....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,833
  • Jul 8, 2016 10:40pm Jul 8, 2016 10:40pm
Quoting The Fool
the VIX puts are a better buy than the VXX ones - but if you put a trade on Friday, the VIX options are already 2 days old, and will expire the following Wednesday - maybe that works out in a combo with VXX, maybe not
you can go out to VIX Jul 20 and the $12.50 puts are a nickel there, same as in the Jul 13 chain - overlap issue not so, it seems, at least now as ^VIX is crashed
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,834
  • Jul 8, 2016 10:47pm Jul 8, 2016 10:47pm
to trade these VXX vs VIX combos, you need to keep a close tab of the correlation between the two and between each and the ^VIX.....oh boy
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,835
  • Jul 8, 2016 10:57pm Jul 8, 2016 10:57pm
Quoting The Fool
I am looking for a weekly income trade,
so that's it: VIX long puts, put on anytime Thursday thru Asian early Monday, and VXX call vert/long call combos, put on Thurs-Fri, looking for defined risk and unconstrained reward - it's just a modified volatility strangle, just using 2 different (but well-correlated) instruments....:nerd:
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,836
  • Jul 9, 2016 12:50pm Jul 9, 2016 12:50pm
FUCKIN FIRE sale in vol....Aug atm iv's in VXX options around 60%, will prolly keep dropping.....in the Brexit scare VXX had trouble floating above $17 for more than a few minutes, BUTT the atm iv's jacked to 110%.

If you want to fish a vol pop, the Big Kahuna is a cheap possibility: buy an otm wide diagonal (1-month is good) and guard the upside death slide of the diagonal with cheap verts. I model the trade below with just a 20% atm iv increase....it could easily be double that. The added attraction is you get a month of time of the back month long calls to play with as you choose (if the front calls expire worthless).
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,837
  • Edited 9:11pm Jul 9, 2016 8:44pm | Edited 9:11pm
http://www.valuewalk.com/2016/07/june-wild-volatility/

http://www.fiendbear.com/Curmudgeon224.htm

Just a huge obvious heavy handed, coordinated CB direct intervention in the markets, openly admitted by Schauble....it's not a "market" anymore, but an apparatus of mind-control.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,838
  • Edited 9:12pm Jul 9, 2016 9:00pm | Edited 9:12pm
Quoting The Fool
FUCKIN FIRE sale in vol...
Friday's VXX close $12.21 was $0.40 lower than the prior all-time low. The ^VIX closed @ 13.20, all-time low at 10.28, so if vol rout continues (why wouldn't it?) VXX will have to slide to $10 or lower, you have to wonder where reverse split territory is for VXX?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,839
  • Jul 9, 2016 11:21pm Jul 9, 2016 11:21pm
the silver lining in the vol rout shitstorm is these epic low iv's set you up for cheap calendars into the next round of earnimgs. I am watching the names come off and the 2-3 weeks past their ER's is the time to shop for calendars that will be set up to catch the next iv rise. ORCL, for instance, does not move much, but it looks like it will be good for a 10-20% iv increase into the 9/14 ER.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,840
  • Jul 9, 2016 11:31pm Jul 9, 2016 11:31pm
Quoting The Fool
ORCL, for instance, does not move much, but it looks like it will be good for a 10-20% iv increase into the 9/14 ER.
This ORCL Sept/Dec kitty with patented Big Kahuna outside protection is a fabulous, fabulous risk free trade. Sets up perfectly with the next ER 9/14, a day before Sep opex. I recommend anyone hock a kidney and put all the proceeds on it asap. And all I can say is, God Bless all the Central Bankers of the World - thank ya'll for giving us this never-ending bull market. Gobbless.... ....the P/L below modeled with a 10% iv rise and up to 1-week before the ER. If the share price has moved towards the calendar strikes it might pay to let the trade run to ER day. Also, of course, with all that time on the back legs, maybe take some off and let the trade run past Sep opex if you can.
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"If The Fool persists in his Folly he will become wise." - William Blake
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