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Let's Trade Options

  • #14,421
  • Dec 18, 2016 3:41am Dec 18, 2016 3:41am
fishing a sell-off in US equities, way in Mar, but I think it will be sooner - anyway, if I can fill SPX flies this cheap I will - risking ~$300 to net max $8,700 - there around $2,050 has been a popular jam-up for the spoos.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,422
  • Edited 12:03pm Dec 18, 2016 10:04am | Edited 12:03pm
Quoting The Fool
I often use combo's of these spreads and even long options sometimes, but I will touch on that later if you're still interested....one thing that makes the options trading learning curve steep is the sheer number of possibilities you have to trade any given scenario. It takes time/experience to figure out what is the best way to trade and also what is the best way for you in particular.
Definitely still interested. Couple dumb questions in my post above if you get around to it.
Looks to me like iv has been the biggest thing on a long list of things I've been missing when I consider options. I was driving with my eyes closed. Very enlightening.
  • #14,423
  • Dec 18, 2016 2:39pm Dec 18, 2016 2:39pm
Quoting goosebone
Definitely still interested. Couple dumb questions in my post above if you get around to it. Looks to me like iv has been the biggest thing on a long list of things I've been missing when I consider options. I was driving with my eyes closed. Very enlightening.
https://www.tradeking.com/education/...ied-volatility

there are lots of places to read up on implied volatility. you don't have to be a mathematician to trade options. but you do need to develop an intuitive understanding of the major concepts, iv being at the top of the list.

I thought I answered your questions in the stuff I put up on including a call calendar to make a GOOGL DC trade. Restate below if you need to.

Options trading is one of those things easy to get bogged down in with too much detail if you are just talking about - I recommend getting in a demo account somewhere that has good analyzer tools so you can start paper trading various strategies. Demo trading definitely has a place for options trading noobs - you can throw up a wide variety of strategies and watch how they perform over time. So many things change with time, you really have to live with some trades to see how they work. If you pick some trades you want to do, put them up here when you enter and we can comment on them together as they go along.

So I call you "noob" but hey I still consider myself a noob more or less in OT and I learn new things all the time, still make "noob" mistakes with regularity, etc, etc, and I am trading options m/l exclusively going on 3 years.

I have a particular approach to OT - I suggest you check out zeeb's The Options Thread to see how he trades, which is more about selling options. I trade the way I do not because my approach is "better" per se, but because it works better for me, that's all.

Also, check out dough.com and tastytrade.com, both have tons of content, the latter especially - with lots of different traders showing their trades in realtime. It has never been easier to learn about any field of trading than is now for OT.

Anyway, I think we are heading for more interesting times in the markets, so it will be good for any trader to understand add OT to his toolkit.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,424
  • Dec 18, 2016 2:56pm Dec 18, 2016 2:56pm
Thinkorswim papermoney just finished downloading as you were posting. Going to play with that for a while before committing any real dollar to any of this stuff. I think you did answer my questions already now that I am rereading it again. Much appreciated.
  • #14,425
  • Dec 18, 2016 3:01pm Dec 18, 2016 3:01pm
Quoting The Fool
{quote}I use the thinkorswim platform from TD Ameritrade. I don't know if you can open an account with TDA, but they will allow US citizens to open an account without funding it. You can try dough.com, or these guys http://www.optionsplay.com/ ...the latter unattached to a brokerage but I think they charge a monthly subscription fee....
thanks I appreciate it but I was looking for forex option in particular.
do you know any platforms that offer a good simulator/ risk reward graphs?

thanks for your time
  • #14,426
  • Dec 18, 2016 3:05pm Dec 18, 2016 3:05pm
Quoting TraderCDS
{quote} thanks I appreciate it but I was looking for forex option in particular. do you know any platforms that offer a good simulator/ risk reward graphs? thanks for your time
the platforms I mentioned the best I can do for you
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,427
  • Edited 7:07pm Dec 18, 2016 3:19pm | Edited 7:07pm
http://wolfstreet.com/2016/12/15/for...-never-before/

if this continues - it does so as enter the King of Debt, the serial Bankruptor, DJT, who famously suggested the US could "renegotiate" its debts with creditor sovereigns, as if he could Chapter 11 the USA - the honeymoon will be over sooner than later.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,428
  • Dec 18, 2016 4:10pm Dec 18, 2016 4:10pm
http://www.screencast.com/t/TYcfwWjoYkLV

A note on combining spread trades (=combos) - see vid - the "problem" with a fly is you have to be good with your target. You could be right on direction for the u/l move but if it moves too far, could move past the b/e's and the trade would fail. If you are planning on catching a good directional move though, the fly has its place and can serve as a "bridge" down to the cheaper options in the chain, which you can put on the outside end of the fly's profit zone and thus insure profit everywhere below/above only one of the fly's b/e. In other words, as shown in the put spread combo, a risk-free trade below the upper b/e. Adds to the cost of the trade, but money well spent if you are right on direction.
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  • #14,429
  • Dec 18, 2016 4:40pm Dec 18, 2016 4:40pm
no btfd for bonds.....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,430
  • Dec 18, 2016 4:55pm Dec 18, 2016 4:55pm
Quoting The Fool
http://www.screencast.com/t/TYcfwWjoYkLV A note on combining spread trades (=combos) - see vid - the "problem" with a fly is you have to be good with your target. You could be right on direction for the u/l move but if it moves too far, could move past the b/e's and the trade would fail. If you are planning on catching a good directional move though, the fly has its place and can serve as a "bridge" down to the cheaper options in the chain, which you can put on the outside end of the fly's profit zone and thus insure profit everywhere...
I see what you did there. Seems like price would have to be gapping fast for you to miss unwinding at your fly target though right? Guess I'll need to paper trade one to see how it feels.
  • #14,431
  • Dec 18, 2016 7:00pm Dec 18, 2016 7:00pm
Quoting goosebone
I see what you did there. Seems like price would have to be gapping fast for you to miss unwinding at your fly target though right? Guess I'll need to paper trade one to see how it feels.
yeah but that happens with flys and calendars and diagonals - you can get the direction right but if the move goes far enough you can end up losing money. The 40x SPY winner I journaled above was worth only 1-2x the day before expiry - almost all of the 40bag came on when SPY pulled back on the last day. The b/e's on those spreads pull way in near expiry and the hard lesson I have learned is: you don't have to be a hero - if you see decent gain well before expiry there are lots of good reasons to take off all or part....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,432
  • Dec 18, 2016 8:33pm Dec 18, 2016 8:33pm
short China
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,433
  • Dec 18, 2016 9:03pm Dec 18, 2016 9:03pm
take yer pick

http://chinese-school.netfirms.com/a...nese-NYSE.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,434
  • Dec 18, 2016 9:06pm Dec 18, 2016 9:06pm
@ LFC looks like $12.5/$10 bull put verts in the oi.....some of these names will go to $0 the way China is going....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,435
  • Dec 18, 2016 9:23pm Dec 18, 2016 9:23pm
CHL Mar $45/42.5 bull puts for 3c - risk $3 to make $250 less a mountain of comms
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,436
  • Dec 18, 2016 9:45pm Dec 18, 2016 9:45pm
BIDU Feb/Mar $125 calendar for 18c - risk 18c to make >$4.00 - a nice setup because the ER is 2/23, the week after opex, so ride the calendar down to d-day and hold the long calls for another month, with the ER there to help you
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  • #14,437
  • Dec 19, 2016 1:37pm Dec 19, 2016 1:37pm
Quoting The Fool
BIDU Feb/Mar $125 calendar for 18c - risk 18c to make >$4.00 - a nice setup because the ER is 2/23, the week after opex, so ride the calendar down to d-day and hold the long calls for another month, with the ER there to help you
I like this BIDU put calendar idea but it's filling >3x that mid from last night, will wait a bit .... filled a BIDU put fly, Mar $150/145/140 for 30c - that will prolly be there for 25c if BIDU posts some gains.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,438
  • Dec 19, 2016 2:00pm Dec 19, 2016 2:00pm
filled a FXI Jan27/Feb17 put calendar @ $31 for 12c
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,439
  • Edited 9:52pm Dec 19, 2016 9:31pm | Edited 9:52pm
Filled GOOGL Jan27/Feb17 put fly today for $2.95; filled SPX Mar17 $207.5/205/202.5 put fly for 25c
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14,440
  • Dec 19, 2016 9:59pm Dec 19, 2016 9:59pm
Quoting The Fool
BIDU Feb/Mar $125 calendar for 18c - risk 18c to make >$4.00 - a nice setup
yeah went to 68c mid, too beaucoup...
"If The Fool persists in his Folly he will become wise." - William Blake
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