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Let's Trade Options

  • #14,301
  • Nov 22, 2016 4:27pm Nov 22, 2016 4:27pm
Quoting ZebraSquirl
I priced a few today, but I think VIX lower before the week is out ... .
well you could take a shot at something for the Dec FOMC - a whiff would be a shocker. That would be one way for JY to show DJT who runs the FR. The EC meets Dec 19, maybe something will go off up in there.....?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,302
  • Nov 22, 2016 5:24pm Nov 22, 2016 5:24pm
Quoting The Fool
{quote}well you could take a shot at something for the Dec FOMC - a whiff would be a shocker. That would be one way for JY to show DJT who runs the FR. The EC meets Dec 19, maybe something will go off up in there.....?
I really can't imagine there being "little to no friskiness" around FOMC. Last go 'round, it got awfully frisky and it lasted for a couple of months. Of course that was when "we're thinking of doing four this year". We did, um, lemmee think here ... . Wait a sec ... . Got it here somewhere ... . (Shuffles papers furiously, looking for his FOMC rate hike spread sheet). Zero. Nada. Zilch. Lol.

It's ... uh ... "different this time."(?)
Fireworks are fun ... as long as you don't blow your fingers off.
  • #14,303
  • Nov 22, 2016 5:28pm Nov 22, 2016 5:28pm
Quoting The Fool
{quote}well you could take a shot at something for the Dec FOMC - a whiff would be a shocker. That would be one way for JY to show DJT who runs the FR. The EC meets Dec 19, maybe something will go off up in there.....?
But I'm really looking to play a post-pop afterglow/crush. I seem to have more success with those, since it seems that the climb down goes off a lot quicker than the climb up (that post-election crush was a hoot with SVXY). Virtually immediate gratification at max profit ... . And Daddy likes his gratification "immediate."
Fireworks are fun ... as long as you don't blow your fingers off.
  • #14,304
  • Nov 22, 2016 6:05pm Nov 22, 2016 6:05pm
Quoting ZebraSquirl
But I'm really looking to play a post-pop afterglow/crush.
yes the lesson from Brexit and US elections is any long vol event trade needs to be well represented on the front end.......vol vehicles are dirt cheap now, so......honestly though I really will not be surprised to see the FOMC be a non-event.......unless they whiff.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,305
  • Nov 22, 2016 7:27pm Nov 22, 2016 7:27pm
Quoting The Fool
{quote}yes the lesson from Brexit and US elections is any long vol event trade needs to be well represented on the front end.......vol vehicles are dirt cheap now, so......honestly though I really will not be surprised to see the FOMC be a non-event.......unless they whiff.
Well, for all the sturm und drang surrounding the elections, I'm surprised that VIX didn't pop higher, so who knows ... . Maybe this bizarro market will take it in stride ... . Seemed to shrug off all the Trump scary talk and cherry pick Trump's agenda for the items that would fit into a "bullish narrative" -- infrastructure spending, Dodd-Frank repeal, small biz friendly environment, Milania redecorating the Lincoln bedroom ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #14,306
  • Nov 23, 2016 12:07am Nov 23, 2016 12:07am
Quoting ZebraSquirl
... . Seemed to shrug off all the Trump scary talk and cherry pick Trump's agenda for the items that would fit into a "bullish narrative" -- infrastructure spending, Dodd-Frank repeal, ... .
http://blogs.barrons.com/stockstowat...od-theyre-bad/

YES, but make a case for fading the Trump love fest - especially the financials, health care, and construction-related (see list in article) .....financials I guess have the best case on projected rate hiking, but Dodd Frank repeal is a fantasy.......repealing ObamaCare not gonna happen either imo, or if it does it will be a repeal phased in over a couple years.....infrastructure spending maybe not as large as proposed......but we'll see on all the above.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,307
  • Edited 3:29am Nov 23, 2016 3:09am | Edited 3:29am
UVXY tricks 'n treats: I have not tried any of these since the Brexit vote. I like to do them when ^VIX is cratering, but really, no reason you can't do them anytime, just need to be looking to trap a vol spike. First is a wide fly - need to get it on as wide as possible & with plenty of time. If there is a vol rush the b/e points will move out towards each end. Not looking to take this to expiry, maybe put the fly expiry a month or more past the expected vol spike date. And the watchword is: cheap. Idk if I can fill for 10c, but we will see.

I played these all over the Brexit vote and some made large returns. Some were too early, in which case you can roll down the far calls to make a wide-ish vert still before expiry, though no guarantee on that, either. The Jan expiry of the fly shown means I am looking for some mid-Dec vol.....I show the P/L at Dec 15, a day after the Dec FOMC & over a month b4 expiry.

The Mar $25/35/45 fly has a 4c mid.....occasionally this crazy shit will fill way below the Nat, just keep in mind UVXY is r/s'ing 1-2 times a year, so you might get stuck with some adjusted options that are a pain in the ass.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,308
  • Nov 23, 2016 3:37am Nov 23, 2016 3:37am
another UVXY trick, one I don't use but I knows those who do: if you look out a couple months sometimes you will see people are buying the fotm calls when they get cheap (i.e., when the ^VIX is bottoming) - these long calls usually have the largest oi at the bottom of the chain - where they are cheapest, and they are just trying to catch a vol rush which will swell the options prices all the way out to the end of the chain, even if the u/l price goes nowhere near that far strike.

If it were cheap enough I might try it but I think the flys are a better deal. Advantages are you aren't short anything and there's less comms...
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,309
  • Nov 23, 2016 4:32am Nov 23, 2016 4:32am
the biggest piece of red meat DJT seems to be hanging onto from his campaign is the proposal to deport millions of hombres malos. The prospect of this will badly hurt the Mexican economy and will push EWW down sub $30.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,310
  • Nov 23, 2016 10:07am Nov 23, 2016 10:07am
FILLED a UVXY Dec16 $12/12.5 call vert for a dime (filled instantly at E* and grinding since the open at tos, which is typical)

....filled the UVXY Jan $25/35/45 fly shown above @ 13c

also filled a Mar/Mar31 GLD call calendar, thinking we are bottoming and gold will regain its footing on inflation hedge buying, a small bet.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,311
  • Nov 23, 2016 10:25am Nov 23, 2016 10:25am
Quoting The Fool
The Mar $25/35/45 fly has a 4c mid.....occasionally this crazy shit will fill way below the Nat, just keep in mind UVXY is r/s'ing 1-2 times a year, so you might get stuck with some adjusted options that are a pain in the ass.
Mar BWB @ 24c in the rta, strickly a nickel/dime trade for me...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,312
  • Nov 23, 2016 11:37am Nov 23, 2016 11:37am
filled the EWW Mar put vert ezackly as shown above ....como se dice "dystopian"...?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,313
  • Nov 25, 2016 11:03am Nov 25, 2016 11:03am
good shootin', fool. Thanks, buddy. These near-term call calendars are just the ticket for a grind-up market....( was in for 45c)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,314
  • Nov 25, 2016 8:25pm Nov 25, 2016 8:25pm
filled today, risk $175 to net $1,225 on a perfect finish - I'd be happy with net 4bag
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,315
  • Nov 26, 2016 1:16am Nov 26, 2016 1:16am
winter?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,316
  • Nov 29, 2016 12:08am Nov 29, 2016 12:08am
XLE Big Kahuna near term proxy for binary crude move off OPEC this week, risk 7c to net 50c, risk all upside, take the perfct finish and/or let back options run into next week on a big move down....might pass on the calls, or add as shown
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,317
  • Nov 29, 2016 9:31am Nov 29, 2016 9:31am
had to slide down the puts 50c or so but filled the BK, paid more too, about 12c, but still has near 5x potential by Fri and b/e @ $70.....ignoring the calls atm
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,318
  • Nov 29, 2016 7:02pm Nov 29, 2016 7:02pm
Mar 17 105 Calls for BUD seems a very good trade
  • #14,319
  • Edited 10:33pm Nov 29, 2016 7:21pm | Edited 10:33pm
Quoting charron
Mar 17 105 Calls for BUD seems a very good trade
GOOD CATCH - I will look at some call spreads later.....BUD looks more comfortable around $120, will get back there in time...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,320
  • Edited 10:30pm Nov 29, 2016 10:18pm | Edited 10:30pm
SAY you think BUD is heading to $120 by Mar opex and you have up to $600 to bet: you can buy one Mar $105 call for $570.75 or you can buy 5x Mar/Jun $120 call calendar spreads for $532.50. At expiry, if BUD trades at $120, the single call will be worth $940, with a b/e point at $110.75. The calendars would have a maxP of $1,783.50, with a b/e @ $107.25.

The straight long call trade is over at Mar expiry; if BUD trades <$120, the Mar $120 short calls in the spread expire worthless and I am left with 5x $120 Jun long calls to extend the trade for another 3 months. In other words, in the latter case, I essentially bought the June @120 calls for $1.03. If I had just bot $120 Jun calls originally, I would have paid ~$2.05 each.

I rarely do straight long options.
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"If The Fool persists in his Folly he will become wise." - William Blake
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