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  • #721
  • Mar 5, 2017 10:01am Mar 5, 2017 10:01am
Next Week in a Nutshell: https://www.tradingview.com/chart/VI...HAT-THAT-S-IT/ There ain't much, lemme tell ya ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #722
  • Mar 5, 2017 10:32am Mar 5, 2017 10:32am
I may piddle with one of these Liz and Jenny diagonals ... . I'm not a huge fan of them, but if you're going to do diagonals without potentially taking it up the glory hole if price rips away from the setup, well, this is the way to do that. In essence, you sell the front month short at the 20 or 30 delta (depending on your risk appetite; closer to current price means lower POP% for the short option, but higher credit brought in at the door). You buy the back month long for a debit slightly less than what you were paid for the short option, receiving a small net credit for the whole setup. If price rips away from the diagonal (in which case both the long and short go to worthless), you haven't earned much, but you're also not losing what you would pay in debit for a tighter diagonal where the debit you paid for the back month exceeds what you received for the front. Here's an example:

Attached Image (click to enlarge)
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This particular setup, however, doesn't come cheap; the spread is 24 wide and comes with a $2400 BPE price tag. Of course, you can piddle with the back month long option; bringing it in closer in time will allow you to narrow the spread while still being paid a net credit for the setup.* Similarly, bringing in the short option closer to current price (e.g., the 30 delta; I wouldn't go in closer than that) will allow you to bring in more credit for the short option and bring in the long option closer to current price.** Alternatively, you can use a smaller, broad market instrument like IWM ... .

* -- The April 21st 230 short put/May 19th 220 long put diagonal (a 10-wide). (.04 net credit/contract).

** -- For example, the April 21st 233 short put/June 16th 217 long put diagonal (a 16-wide), where the April 21st 233 is at the 30 delta. (.04 net credit/contract).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #723
  • Mar 6, 2017 10:56pm Mar 6, 2017 10:56pm
I like doing diagonals but I have never done them so wide. The bp hit a deterrent. Always nice to put them on for a credit or tiny debit.....but, you get what you pay for. Or what you don't pay for, as the case may be. So, the less you pay, the more you risk. But if things work out and the S&P falls sharply in May with your long May puts intact....money.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #724
  • Mar 7, 2017 6:38am Mar 7, 2017 6:38am
Quoting The Fool
I like doing diagonals but I have never done them so wide. The bp hit a deterrent. Always nice to put them on for a credit or tiny debit.....but, you get what you pay for. Or what you don't pay for, as the case may be. So, the less you pay, the more you risk. But if things work out and the S&P falls sharply in May with your long May puts intact....money. {image} {image}
I also prefer the less pricey. I can understand the logic of doing it for a net credit, but ties up too much $$.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #725
  • Mar 7, 2017 6:40am Mar 7, 2017 6:40am
Covering: DKS March 17th 43/50/50/57.5 iron fly for a 3.26 db at open; in for 4.18; out for 3.26; .92 ($92) gross profit per contract.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #726
  • Mar 7, 2017 7:07am Mar 7, 2017 7:07am
Opening: URBN 21.5/25.5/25.5/29.5 iron fly for a 2.24 credit (High IVR/High IV; earnings volatility contraction play).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #727
  • Mar 7, 2017 9:00am Mar 7, 2017 9:00am
Opening: SPY April 7th 241.5/244.5 short call vert for a .40 cr. (Delta balancing/adjustment trade for core position).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #728
  • Mar 8, 2017 3:46pm Mar 8, 2017 3:46pm
Quoting ZebraSquirl
Opening: URBN 21.5/25.5/25.5/29.5 iron fly for a 2.24 credit (High IVR/High IV; earnings volatility contraction play).
... and out for a 1.68 db at open; .56 ($56) gross profit per contract.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #729
  • Mar 8, 2017 3:49pm Mar 8, 2017 3:49pm
Covering: ATVI March 17th 39/42.5 short put vert for .06 db. This is part of a broken earnings play I'm working ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #730
  • Mar 9, 2017 4:33pm Mar 9, 2017 4:33pm
Opening: ATVI covered put. The continuing saga of this broken earnings play. It's a long story: https://www.tradingview.com/chart/AT...I-COVERED-PUT/
Fireworks are fun ... as long as you don't blow your fingers off.
  • #731
  • Mar 11, 2017 8:53pm Mar 11, 2017 8:53pm
Ugh. Doing my weekly market review/screening and there is literally nothing high IVR/high IV to play ... . Nada ... . Zilch ... .

One option is to sell puts in one of these "just high IV" underlyings:

VRX: April 21st 11 goes for .56
AKS: April 21st 7 goes for .31
AMD: April 21st 13 goes for .66
WLL: April 21st 8 goes for .28
CLF April 21st 8 goes for .34
X: April 21st 32 goes for 1.25

These are all at or around the 30 delta ... .

For earnings, what little "quality" stuff is left to this season is still a few days out:

FDX (IVR 92/IV 30) (3/21 AMC)
GME (IVR 73/IV 46) (3/23 AMC)
MU (IVR 76/IV 47) (3/23)

VIX: For a "Term Structure" play,* the earliest expiry where the 50 delta strike is at 16 or greater and pays ~2.50/contract is June, and that's 101 DTE ... .

* -- I set these up with the short leg of the short call vertical at the strike closest to the 50 delta strike and buy the long out several strikes from there, but don't like going lower than the 16 strike in light of the long-term moving average for this puppy (shown in blue):

Attached Image (click to enlarge)
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Naturally, shorting on a pop is "more ideal," but the last time we had a >15 pop was around the November elections ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #732
  • Mar 13, 2017 3:23pm Mar 13, 2017 3:23pm
Covering: TSLA March 17th 240/245/260/265 for a 1.95 db on this little bounce, yielding a .09 ($9)/contract profit (yippee!). Price was dancing around the short put, and I just didn't feel like rolling it out to give it additional time ... .

Rolling: ATVI April 21st 47 short put to the May 17th 46 short put for a .57 credit. This is part of a covered put and moves the short put to slightly below my cost basis.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #733
  • Mar 13, 2017 5:29pm Mar 13, 2017 5:29pm
Trade Idea: SPY April 21st 230/233 short put vert. Metrics here: https://www.tradingview.com/chart/SP...HORT-PUT-VERT/

I'm using it to pick up a little long delta for my core SPY position, but it's also good as a stand-alone trade.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #734
  • Mar 14, 2017 8:38am Mar 14, 2017 8:38am
Quoting ZebraSquirl
Trade Idea: SPY April 21st 230/233 short put vert. Metrics here: https://www.tradingview.com/chart/SP...HORT-PUT-VERT/ I'm using it to pick up a little long delta for my core SPY position, but it's also good as a stand-alone trade.
Filled for .55 ($55)/contract ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #735
  • Mar 14, 2017 9:41am Mar 14, 2017 9:41am
Fading Ackman's throwing in the towel on Valeant with a monied covered call. VRX Shares + April 21st 10 short call for a 9.38 db. Basically, betting that this poo pile stays above $10 through April expiry ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #736
  • Mar 14, 2017 10:31am Mar 14, 2017 10:31am
Quoting ZebraSquirl
Fading Ackman's throwing in the towel on Valeant with a monied covered call. VRX Shares + April 21st 10 short call for a 9.38 db. Basically, betting that this poo pile stays above $10 through April expiry ... .
Been burned too many times with these dogs :-)

I'd play these more conservatively by capping the loss.

Max profit for your trade = $62 minus commissions.
Max loss = $938

Option #2:
Sell Apr 10 P for .66 x 2 = 1.32
Buy Apr 9 P for .36 x 2 = .72

Max profit = $60 minus commissions
Max loss = $140

***Option commissions are lower than stock commissions.
***Selling Apr 10 P x 1 will gave same R:R as your trade but has just 1 position to deal with so less commissions. No need to buy stock.
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  • #737
  • Mar 16, 2017 5:03pm Mar 16, 2017 5:03pm
Quoting srt
{quote} Been burned too many times with these dogs :-) I'd play these more conservatively by capping the loss. Max profit for your trade = $62 minus commissions. Max loss = $938 Option #2: Sell Apr 10 P for .66 x 2 = 1.32 Buy Apr 9 P for .36 x 2 = .72 Max profit = $60 minus commissions Max loss = $140 ***Option commissions are lower than stock commissions. ***Selling Apr 10 P x 1 will gave same R:R as your trade but has just 1 position to deal with so less commissions. No need to buy stock. {image}
Yeah. That's a better play. I kind of shot from the hip with the monied covered call ... . Oh, well ... . She's on now. The only minor advantage I get from doing it this way is the potential to roll out that short call for additional juice which I really have no intention of doing with this poo pile unless (a) it shoots the moon (ha, that's a funny one); and (b) rolling it out brings in some kind of ridiculously juicy credit (unlikely) ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #738
  • Mar 16, 2017 6:09pm Mar 16, 2017 6:09pm
Quoting ZebraSquirl
{quote} Yeah. That's a better play. I kind of shot from the hip with the monied covered call ... . Oh, well ... . She's on now. The only minor advantage I get from doing it this way is the potential to roll out that short call for additional juice which I really have no intention of doing with this poo pile unless (a) it shoots the moon (ha, that's a funny one); and (b) rolling it out brings in some kind of ridiculously juicy credit (unlikely) ... .
Nice 4% pop in extended hours on another purchase by a large hedge fund :-)
Just don't like stocks that are down 95% over the past year. Usually just a matter of time before the final hammer drops. Just pray not until your option expires :-)
They just rolled over some debt so the final ax will be extended if it happens. Only 30 billion in debt. No big deal.

***Selling a naked put allows you to roll to a higher put also just like rolling the call. Just less commissions when you're not dealing with the stock.
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  • #739
  • Mar 17, 2017 9:24am Mar 17, 2017 9:24am
Dec. Corn:
Sold 380P @ 26.75
Bought 340P @ 9.5
Credit of 17.25 ($862)

Break Even @ 363
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  • #740
  • Mar 17, 2017 12:27pm Mar 17, 2017 12:27pm
Quoting ZebraSquirl
Trade Idea: SPY April 21st 230/233 short put vert.
index short verts either way will prolly be good for a while, I sense another spell of flatness.....if anything I expect US stocks to start to sputter in the uptrend, maybe slide a little.....sideways is the new down...
"If The Fool persists in his Folly he will become wise." - William Blake
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