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Let's Trade Options

  • #14,281
  • Nov 18, 2016 2:22am Nov 18, 2016 2:22am
SPX and /CL a year ago.../CL was on a drop from $44 to $26 from late Nov to Valentine's.....if oil will not rally now I see a similar reaction in SPX after the Dec FOMC. It is hard to estimate what will happen as Trump announces his cabinet of crackpots and incompetents, finally realizes he has to stop rallying and begins to dabble in running the country. I don't have very much hope...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,282
  • Nov 19, 2016 11:48am Nov 19, 2016 11:48am
looking for gift under $1200, watching the Mar/Mar qtly GLD call calendars @ +$100

https://www.yahoo.com/finance/m/0234...-may-soon.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,283
  • Nov 20, 2016 4:28pm Nov 20, 2016 4:28pm
Big Kahuna - cheap fly bridges out to super cheap verts - long vol long shot needs to be cheap...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,284
  • Nov 20, 2016 4:34pm Nov 20, 2016 4:34pm
Hey F
Good job you've done there since 2013 when you started the thread.

Are those P/L real money accounts ?

Btw I got interested in options because I wanted to get into stocks and discovered that I can buy & sell with leverage using options. That's why I got into options.

However,so far it looks all like Chinese to me even though I have very good knowledge on FX

All those "Butterflies" "Theta" etc haha.

I am mainly interested into swing trades medium to long term.

Any good place to start learning the basics on options in a simplified way??

Thank you.
  • #14,285
  • Nov 20, 2016 5:02pm Nov 20, 2016 5:02pm
Hi timos,

all the P/L charts I post are from the thinkorswim platform at TD Ameritrade, where I have a small IRA account. I don't do any demo trading...

For a lot of educational resources, check out tastytrade.com and dough.com. Learning how to trade options takes time: I recommend doing some paper trading on the different strategies you want to try. You really have to work through actual trades before you will start to understand.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,286
  • Nov 20, 2016 7:08pm Nov 20, 2016 7:08pm
Quoting The Fool
XLF barely traded above $30 before the subprime crisis, since then been a 8-yr grind up from sub $5. Will print one of its biggest green week candles ever this week, maybe close above $21. The Jan $23 calls are 4c. Feb $23C @ nearly the same, but no volume. You could do a calendar between the two for 1c but may have trouble filling. Might be fun to take a shot at the Jan $23C, with enough numbers to take some off early in a Santa rally...a 100-lot trade debits me $485 and could net near $20k on an epic bump to $25 by Jan opex. {image} {image}
It seems you're 84 cents away from a big smile ,right ?

I spent 8h today learning about options.
So far I've learned about:

  1. Call Long
  2. Call Short
  3. Put Long
  4. Put Short
  5. Vertical Spread and
  6. Iron Condor

Looks like a lot of you trader are vertical spreads,you do that to limit your risk ,right?

In the above trade,if price doesn't hit 23,max you can lose is $485?

I am sorry if am asking too many question, I am just trying to see if I am learning the rights way.

Thanks for your time anyway

  • #14,287
  • Nov 20, 2016 7:33pm Nov 20, 2016 7:33pm
Quoting timos
a lot of you trader are vertical spreads,you do that to limit your risk ,right? In the above trade,if price doesn't hit 23,max you can lose is $485?
verticals are a way to trade directionally with limited risk, yes....just a long call would have limited risk also, but a vertical will have another advantage - lower cost - if the underlying move is not so large.

Not sure what you are looking at in "trade above" ? ....just above is a UVXY call combo, a fly that bridges out to a vertical, max loss is around $150 or so, and the b/e is at $12.50 @ expiry. MaxP a little over $1,000...

Something to keep in mind with options is that the P/L shown at expiry for a given strategy is different than the P/L on any other day running up to expiry. Everything changes. You need to be able to model how the P/L changes over time and also how things change with changing iv and changing greeks - your plan for the trade may include ideas to close or adjust the trade on any day up to expiry.

The above is not easy to do but if you trade a lot and watch what happens closely with a trade over time then it will come to you.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,288
  • Nov 20, 2016 7:39pm Nov 20, 2016 7:39pm
Quoting The Fool
{quote}verticals are a way to trade directionally with limited risk, yes....just a long call would have limited risk also, but a vertical will have another advantage - lower cost - if the underlying move is not so large. Not sure what you are looking at in "trade above" ? ....just above is a UVXY call combo, a fly that bridges out to a vertical, max loss is around $150 or so, and the b/e is at $12.50 @ expiry. MaxP a little over $1,000... Something to keep in mind with options is that the P/L shown at expiry for a given strategy is different than...
Thanks.

I was talking about XLF

Your chart was at 20, your Buy with a strike at 23,20 Jan 2017 at 0.04 cent/share.

Price of XLF right now is at 22.16
  • #14,289
  • Nov 20, 2016 7:52pm Nov 20, 2016 7:52pm
Quoting timos
Thanks. I was talking about XLF Your chart was at 20, your Buy with a strike at 23,20 Jan 2017 at 0.04 cent/share. Price of XLF right now is at 22.16
Oh....yeah I wish I had filled that. I actually have Dec23 XLF $24 long calls filled at $0.02 and Feb $25 long calls filled at $0.08. I already closed some of the Dec23 calls at 14c, looking for a little more but the move in XLF is looking stretched...the Feb calls are sitting at 7c-8c. If I don't see a nice pop in XLF in the coming week I will prolly close all of them.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,290
  • Edited 10:56pm Nov 20, 2016 10:40pm | Edited 10:56pm
Ideas for a heavy bullish seasonal breakout in US equities, SPX 2,300 not out of the question for Xmas
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,291
  • Nov 21, 2016 10:29am Nov 21, 2016 10:29am
filled the UVXY fly above, hedging

also filled some HYG $87 long calls for 6c, will justify later

trying to fill some way otm SPX call spreads, closed one of those expiring this week already, SPX spreads too numerous to list
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,292
  • Nov 21, 2016 12:50pm Nov 21, 2016 12:50pm
in for 50c , out for $3.00 - maybe coulda milked some more, but SPX also could move past 2190.....good enough
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,293
  • Nov 21, 2016 12:56pm Nov 21, 2016 12:56pm
Quoting The Fool
also filled some HYG $87 long calls for 6c, will justify later
the premise re HYG is high yield bonds will rise with bull equities - even though bonds are under pressure, the HYG stuff is shorter duration and it's the long duration credit that suffers in a rising rate regime. HYG up 50c today, those were Dec 16 calls I think....if it will grind up another $1.50 in the next 1-2 weeks I will look for 5-10 bag
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,294
  • Nov 21, 2016 8:55pm Nov 21, 2016 8:55pm
I had a good number of SPX calendar call shots at 2190 for expiries from last Friday to Wednesday this week.......if SPX will pull back a little bit by Wed this one could do well....or, if SPX keeps rallying, it could bomb - that's the deal with calendars. It was a 20c debit.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,295
  • Nov 21, 2016 9:36pm Nov 21, 2016 9:36pm
bot this GS call fly today, a bet GS will grind up another $5 over the next 2 weeks
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,296
  • Nov 22, 2016 12:11pm Nov 22, 2016 12:11pm
Quoting The Fool
I had a good number of SPX calendar call shots at 2190 for expiries from last Friday to Wednesday this week.......if SPX will pull back a little bit by Wed this one could do well....or, if SPX keeps rallying, it could bomb - that's the deal with calendars. It was a 20c debit.
last of the $2190 call calendars out today, the 20c 4-lot above out for $1.85.....I wish I could fill these at 20c all the time. Just catching a move and being there = golden. I have some cheap Dec SPX call calendars that were < 50c, out at 2,225 etc, but I am also looking at cheap long vol spreads for Dec dates, now while vol is dirt cheap
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,297
  • Nov 22, 2016 12:32pm Nov 22, 2016 12:32pm
Quoting The Fool
{quote}last of the $2190 call calendars out today, the 20c 4-lot above out for $1.85.....I wish I could fill these at 20c all the time. Just catching a move and being there = golden. I have some cheap Dec SPX call calendars that were < 50c, out at 2,225 etc, but I am also looking at cheap long vol spreads for Dec dates, now while vol is dirt cheap
I slapped on an IWM Dec/Jan 136.5/140 diagonal for a .01 db today. I don't do many of these, but need to do more. These vol lulls are for the birds, and they can go on for weeks ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #14,298
  • Nov 22, 2016 2:47pm Nov 22, 2016 2:47pm
Quoting ZebraSquirl
{quote} I slapped on an IWM Dec/Jan 136.5/140 diagonal for a .01 db today. I don't do many of these, but need to do more. These vol lulls are for the birds, and they can go on for weeks ... .
yeah, my gut is we'll grind up all the way to Xmas, ^VIX will flirt with new atl's, UVXY will r/s, and so on. The rest of this week should be a snooze as volume thins out for the long T'day holiday....

I am putting on long vol spreads if I can get them for near nada, otherwise it will pay to wait, I spec...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,299
  • Nov 22, 2016 3:08pm Nov 22, 2016 3:08pm
Quoting The Fool
{quote}yeah, my gut is we'll grind up all the way to Xmas, ^VIX will flirt with new atl's, UVXY will r/s, and so on. The rest of this week should be a snooze as volume thins out for the long T'day holiday.... I am putting on long vol spreads if I can get them for near nada, otherwise it will pay to wait, I spec...
I priced a few today, but I think VIX lower before the week is out ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #14,300
  • Nov 22, 2016 3:14pm Nov 22, 2016 3:14pm
Quoting The Fool
bot this GS call fly today, a bet GS will grind up another $5 over the next 2 weeks
GS popped to $212 ah and if it will do that into next week and settle @ $217-8 by 12/2, I will be happy. GS puts on much bigger pops than that sometimes, though. Financials have been flat the last week+ so maybe they will get cracking now...my XLF long calls need help....
"If The Fool persists in his Folly he will become wise." - William Blake
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