Hi traders. Well most of us are scrambling around trying to find some good trades for the week ahead.
Thanks to Newport (maybe) I have opened some VECO puts for July at both the 40 and 41 strikes. A new stock for me but it looks pretty good.
I also have some spreads with NFLX and PCLN
Tomorrow maybe we can tell if the mkt is going to come back some. At this time the DOW is up a little and the NASDAQ is down some. The market is certainly in need of a positive bounce one of these days. That being said, the market will do what it does!
Trade careful and don’t try to force a trade by compromising your filters.
109 comments:
Jerry,
Any naked calls? or call spreads?
Hey All, Hope you all had a good weekend. Looks like the market doesn't know which way it wants to go today. FLAT is good for me with crumbs haha.
I just did my frist Iron Condor.
Took the following:
SPX - Trading at 1270.42
Did An IC For - Put - 1200 / 1195 & Call - 1330 / 1335
This gives me 70 points on the put side and 60 points on the call side of cushion. Premium was .15 3% (before comm) for 5 days of trading. After comm this is 1.63%. I was getting 1.2% when doing a vertical spread before but now with an IC I can get an extra .4% return with the trade and not have to put up anymore margin.
I will see how this new style of trade goes the "Iron Condor" :)
Go Vancouver!
waiting on VECO still - if it tests 51.5 again and bounces I'm in
good luck to those in already :)
Rick (Bald Harley), I've always found it difficult to type while sitting on my hands. Your comment "expounding - It seems to me your account equity ($25K or $25MM) is not relevant to our mutual goals here; maximize earnings. Assuming that is your goal as well." My "account equity" in neither "here-nor-there" and not relevant to any discussion on this blog...I agree with you on that. In this GIGO, I have found (so far) a strategy that is relatively safe and I'm able (so far) to extract "chunks of cash" with relative ease. This is a strategy that takes advantage of two guarantees when trading options: 1. all option premiums vary in value and 2. all option premiums decay (due to the effects of theta) in value. The option premiums for all OTM strikes will go to .00 bid by an offer that is minimum increment size for that underlying (for SPX it's .05). There is no way to stop that, it has to happen, it will happen. Now, price action and volatility can delay that, but for all OTM option premiums, it will happen (theta will eventually win out)...and it's that "guaranteed to happen" characteristic or phenomenon of option trading that I'm using to make my GIGO money off of. Look, I have stated before (more than once), that for me (and only for me) and for this strategy (and only for this strategy), I'm not concerned about ROR/ROI...only "the cash". I understand that you and others are concerned with "maximizing earnings" (as you stated), I'm not trying to discount the importance that you and others place in ROR/ROI as a major factor in determining the trades you take. I totally respect that. I'm just saying that for me and only for me and for this strategy and only for this strategy, I'm not concerned with ROR/ROI (I don't know how I can state this any other way with any more clarity). If you look at this strategy only from ROR/ROI, I agree, it does not look very good (yes, I will concede that). As I stated before, trading options are about trade-offs. On-the-one-hand, I'm giving up some on ROR/ROI, so what am I gaining (on-the-other-hand) for doing that? I'm gaining a system that has proven (so far) to be relatively safe and also one that I can extract cash with relative ease (so far). How do I define "safe"? In a word: "cushion". In three words: "cushion, cushion, cushion".
Your comment "In my view (my humble view), the GIGO method, while obviously effective, seems to maximize commissions and personal effort, and not necessarily profits." My commissions are .80/contract and no ticket. Not the best, but not the worst either. I'm very comfortable with that (for now). So for me (and speaking only for me), commission costs are not a big concern. Yes, anytime you exit one trade and enter another, there are going to be commission costs associated with that. But, I'm not going to let worries or concerns about commission costs get in the way of me making money...it's just not going to happen. As far as "maximizing personal" effort is concerned, once filled on an SPX naked put trade, I punch in a GTC order to BTC that trade for (.05), so that happens automatically (usually the next day). Then to determine the strike where I'm going to sell my next naked put trade at, it takes about 60 seconds (90 at the most) of looking at the SPX option chain to do that and two or three mouse clicks later the trade is entered. Gotta be honest with you Rick, not a lot of effort there. It's really pretty easy to do (looking at the option chain, selecting the strike, and punching in the trade). In reference to your statement about not maximizing profits, I agree with you (as I've stated my position on this before). I trade this strategy for its safety (cushion) and its ease with which I've been able to extract "the goods"...not for the ROR/ROI.
Your comment about being able to trade out @ 75% of your profits, but 25% are gimmes, I totally agree. My broker does not charge an added fee for trading SPX, so I'm not familiar with that.
Your comment "Are you seeking to maximize profits/earnings, or to maximize 'action?' I fear it could be the latter". OK Rick, if you call closing out trades (the next day), for a profit, and taking risk off the table as "maximizing action", then I stand (proudly) before you "guilty as charged". If an option sold on one day is only worth .05 the next and you agree that little is gained by holding that weekly option (till expiration just to "squeeze out" that additional .05) with 6, or 5, or 4, or even 3 days left in the lifetime of that option and you would rather sell another option @ .15 or higher to make better use of that margin money (all the time maintaining a certain level of safety...i.e. cushion)...if you call that as "maximizing action", then I stand (proudly) before you "guilty as charged". If you call working the fringes (edges) of the SPX option chain to take advantage of the "domino effect" of all OTM options having to (strike by strike) decay to a .05 offer as "maximizing action", then I stand (proudly) before you "guilty as charged".
Look, this is not a perfect strategy, I know that. I will defend its strong points, and I will acknowledge and concede its weaker ones. I take very, very, very seriously the fact that in this strategy, I'm naked (unprotected) an almost $1,300 underlying and my potential losses are unlimited. My number #1 goal in trading is to not lose money (capital preservation) and to help me achieve that goal with this strategy on such an expensive underlying, I trade it with lots of cushion. To gain the advantage of lots of cushion, ease of trading in/out of positions (single-legged option trades), riding the "domino effect" of theta decay on strike prices, and the ease of extracting money on the fringes of the option chain, I have to give up something in return and that something is ROR/ROI. I'm not married or even emotionally tied to this strategy, it may seem so, but I'm not. My only reason for posting messages about the GIGO, is not to get people to trade it, but to find out if there's anything I'm missing here because extracting cash (with each GIGO iteration) from the market (even in bearish markets, as I'm finding out) is pretty easy to do, and I was thinking maybe I'm missing something here. But now, I think I got a pretty good handle on this GIGO and I'm going to continue to trade it and see where it takes me, but I'll dump this strategy at any time, if I feel it's not a good fit for me anymore.
It's funny that you should make a comment about taking emotion out of the equation because if there is one person that stands out in my mind as being emotional in their trading, based on comments posted on this blog, it would be you. There's not even a close second that comes to mind. I remember one time calling a friend of mine and asking him if he read the comments made by "Bald Harley" (that day) and I made a comment to him that based on those postings I thought he (Bald Harley) was an "emotional wreck". Rick, I mean no disrespect here, I respect everybody, and I mean everybody that posts messages on this blog but some of your older messages conveyed a lot of emotion in them (IMHO). And, I admit Rick, I have not been able to take the emotion out of my trading...my biggest weakness in trading, without a doubt. If I heard it once, I heard it a thousand times (take the emotion out of trading), but it's very hard to do.
Nic, I will respond to you in another posting as this one is already too large. Basically though, I agree with what you're saying.
noob here with a question about order entry. Are you selling a naked put first or do you enter the trade on the same ticket. Looks like on the spread ticket you can add more legs but only one price shows. Hope someone if following me. I know this stuff is second nature to some. thanks
Starting tomorrow, there are going to be tons of economic data for the week. Things should be increasing, maybe we'll get a better idea where things are trending.
Dave G,
I knew I should have remained sitting on my hands. "viva la diference" right?!?!? Your trading style, or anyones, is completely none of my business. My apologies to you and anyone offended by my comments.
Best of everything to you and yours..
Rick
Fulgore,
Good luck on the IC. It's hard not to grab the extra premium when it's 'free' right.
Cheers!!
rick
We all differ and each has to find trading methods (and different sheep counting method) as suited to our personalities and characters, right? Some are happy with spread & ROI, others are happy with naked put call and certain annual capital returns (like me) or absolute dollar amount per period....
Dave G, I think naked put with the index or stocks is pretty cool like you did b'cos you can go way out of money (almost 100% probability zero risk like spx 1125 weekly now)and get pretty luxurious premium for minimum time without waiting painfully for a nickel or dime to get filled (ha ha - it's a good training camp for patience lol) All I could see is Time Decay is incredibly fast.If you are happy with your returns (I thought it's a wow!!), never mind ROI or some accounting jargon....
Good trading folks.
hey all,
and especially to dave g and bald harley, great input, comments, and discussions. i think dave does a good job of explaining his gigo and bald's comments were enlighting.
i hope both you guys will continue to give us the details of your trading styles.
Hi Kite yes some naked puts with VECO 40'S & 41'S
Some call spreads with PCLN 540 & 545's.
Jerry
STO a handful of VECO 40 at .25 at the end of the day - see what happens
Fulgore, I was chasing that spread most of the day after I read your comment, but no luck. This was a dreadful day without any fills at all. Either I'm too cautious (which I guess is fine) or I'm not reading the option chains correctly. The 1200/1195 had a negative bid most of the day, what does that mean??? They expect people to pay in order to sell a put? :o)
I must say that Dave G's GIGO strategy is tempting, I never had these issues when I was trading naked puts, but I just can't see how that would work for me. The amount of SPX I would be able to afford would be abysmal compared to the number of spreads I do today. I've started looking into portfolio margin since that has been mentioned numerous times here, but as far as I can understand this seems to require a diversified portfolio, whereas I would probably use all my funds on the same naked. All very confusing.
Oh well, new day tomorrow.
Just found out that Optionshouse doesn't offer portfolio margin.
Roadking, when entering a credit spread order, either put or call the BUY part of the spread is usually entered first.
ex; A call spread. the stock is 100 and you want a credit spread for the strikes of 120/125
Assume you are doing 10 of these. You would buy to open (bto) the 125and 'STO' the 120's.
Hope that helps.
@Roadking, what platform are you using this might help us. With Think or Swim I just right click my option trade and choose verticall sell.
@Nic, originally when I did the IC it said it would give me .00 premium. But I checked both the call and put side of the trade 1 strike up and down. The strike up was about .15 return or so and the strike down was about .05. This told me that I could get filled on the put side for .10 and the call for .05. I set the premium i wanted at .15 and waited. It went through after about 10 min.
What I would like to know is if there is a way I can input what I want for the premium for each side. For Example, say I want .10 on the put side and .05 on the call side or vice versa. Is there a way to do this to get my order filled more quickly. I will be calling Thick Or Swim this week to ask this question.
I was away all day on business but had enough time to stop at a Boston Pizza to use the wireless and get my IC in. It looks like the market was up nor down at the close, this is good for my IC!!
Good luck this week all. I will be back in the office tomorrow to keep an eye on the market. Bloody thing better not act up tomorrow :)
Gotta continually fight the greed/trader in me. Jerry is at 540 calls on PCLN and I find myself at 515. Still ok but gotta learn to just go for the 1%
Fulgore, I'm on Optionhouse, and the bid was negative. I assume this is because the bid on a lower strike is higher than the one I'm looking at, are you looking at verticals or the single option chain?
@Nic, it was negative for me this morning but I just changed it because I knew I could get .10 out of it.
@Nic, just test the vertical spreads on the put side if that is what you are looking for. Right now I am showing a .05 on the 1185 / 1180
Fulgore, I see a .05 as last mark, but the bid is -.20, and that is what determines supply, right? The mark is the last deal done but that could have been a while ago. For instance, the 1205/1200 shows .15 and the 1215/1210 only .03. The current bids (which I guess are old now anyway) are negative all the way up 1240/1235.
I'm really amazed that there is such a spread on something like SPX, which must be traded in the thousands.
Not sure about other platforms, OH doesn't show interest and volume when looking at spreads, so will try with two windows open, one single and one vertical, perhaps that can give a clue on possible fills...
Fulgore/Nic
The most likely reason for a negative spread bid on SPX, PCLN and other WIDE bid/ask prices is likely due to the bid/ask prices overlapping between the adjacent strike prices.
Just slide your price to the middle, and adjust from there.
Good hunting
rick
@Nic / Bald, Im not a pro or vet so I don't know the technical stuff. All I know is that I look for a certain premium for my put side and my call side. .10 and ,05 respectively. I then just change what ToS is going to give me for a premium to .15 and wait to see if it goes through. This is typically 60-80 points for the put and almost the same for the call for weekly's.
Sorry I don't know know the technical answer :( Bald seems to know what he is doing lol, but this guy here on this side of the keyboard, Me, I don't know :) .
Fulgore,
Don't apologize, you're thinking is exactly correct. We cannot always know what the right cushion is for different stocks or indexes. In a way, the pricing does that for us. Looking for .10 on indexes and .05-.10 on stocks will put you in the right price range for 1-2% per week after comm/fees.
I am often guilty of looking for .20 cents on SPX (.30 for IC's) because I have had good luck using these on Tue/Wed trades. I've also been scared a few times, like two weeks ago when my 1300/1295 put spread was good by .16 cents!! That really is too close for comfort.
Risk tolerance varies by trader.
Cheers!!
Rick
@Rick, your crazy!!!! crazy in the sense that .16 is waaaay to close for my comfort !!!.16 CENTS!!! haha. You have nerves of steel sir. I would not be able to handle it I would have gotten out of the trade a long time ago on your 1300 SPX last week.
Market is up a decent amount today. I think it will drop a bit but close today up.
Ok ok people list your trades for this week, don't be shy!
Nic, as per your post from 6/11, I agree with everything you said. There is nothing you said (and you stated it very well) that I would want to take the other side on.
Rick, I wasn't offended by any of your comments. One has to understand (and I do) that when you post comments/opinions or anything online, you open yourself up to possible criticism from others. I want your feedback Rick. Are you kidding me...you've got 25 years of experience trading the markets, I want feedback from someone with that kind of experience, please don't sit on your hands! But, I want you to understand that I will defend my position or anything that I post on this blog. But, I'm not one of those people who thinks he's always right and if correctly pointed out that I was wrong, I will admit when I'm wrong. I welcome your feedback Rick and thank you for your comments.
Hannah, well said and thank you for your comments.
Trader Lux, thank you for your comments.
After closing out my remaining positions in SPX short puts on this morning's bounce, I'm nearly flat. No more positions in SPX, I'm short some AAPL puts @ 290 (looks pretty safe...they expire on Friday) and some VZ puts that expire on Friday (99.99% safe on that one, I'm trying to play the WOF on VZ, but the stock never gets put to me, so I'll keep selling them puts until it is). I wanted to be flat going into tomorrow where I'll be attending a class on market makers and the tactics and tools that they use to try to take money from us and how to recognize that so that we don't get trapped by them and lose money to them. I don't want any open positions distracting my attention (as has happened in the past) because I'm going to be away from my computer. I'll be in class all day, so there will be no trading for me tomorrow (first time in a long time). I'm very, very much looking forward to the new (real) weeklys that come out Thursday morning...love them weeklys baby!
Jerry, BTW, it looks like your concern about the vote on the debt ceiling was warranted. I was wrong about not giving that issue enough respect about its possible impact on the markets. I'm still going to trade SPX, but I'm going to give it plenty of breathing room. They have until August 2 to vote on whether or not to raise it.
Dave G,
Deal... No more hand sitting...
Your 'emotional wreck' comments were not far off. Sometimes I scare myself. I do have a higher tolerance for risk. My comments re your trading were based solely on seeing myself in YOUR trading. I used to make 10-25 trades per day. I made money ~70% of those days which only fueled my FIRE. Trouble was, my losing days were much worse than the winning days.
I'm a 4th generation commercial/industrial contractor (read extreme gambler). Its in my DNA. I love Vegas.... But I've (almost) learned that that thought process has to STAY in Vegas. I've had 14 straight winning weeks. Not bad in a down market. I owe it to taking very calculated risks, and taking what the market gives me. NOT fighting it...a prior problem for me.
Again, I see/saw alot of me in you, and would hate to see you hit a bad run... Many years ago, I lost $100,000 in a week. I'm not proud of that. I've learned from my mistakes, and hope to god I can keep my emotions in control each and every week going forward.
Jerry has mastered the greed issue, and is a shining example for all of us.
Cheers!!
rick
@All my:
IC For - Put - 1200 / 1195 & Call - 1330 / 1335
is look ok on the put side but may worry me on the call side if the market does what it did today... tomorrow. This gives me 42 points of cushion for 3 days of trading. I will see how it goes tomorrow. If the market gets to close to my strike I will close my call side and I don't care if it is a loss or a gain. Will keep you all posted.
Note to self, if I am going with this IC strategy in the future then gives at least 70 points of cushion on the call side if i can get it.
Opened 1230/1210 put spreads on the SPX right before the close yesterday. ROI is around 1.7%, let's see how the week goes.
Options House -
Nic do you think it's because OH fills are not as fast or orders routing not efficient as other brokers? (From the comments of not getting filled)What do you think?
I am just a button away from funding OH account. I spent the morning writing to TDA client service - back and forth. TDA claimed to give one side free margin too - but I entered the orders wrong all the times -lol. So I re-entered to prove the clerk wrong. Then it's silence....
Hmmm.
Hannah, it could just be me having to high expectations on fill premiums. I'm relatively new to options and compared to stocks the execution speed is obviously night and day. However, TOS has a thing where they let you close options with a value of .05 or less without cost, and when I asked OH about this they said they can't do that because they are not the ones I'm selling to. I assume this means TOS has their own 'stock' of options whereas OH does not. This could certainly affect execution speed and choices.
I'm not sure how big Optionshouse is as a company, but there has to be a reason they offer so low rates. The platform is pretty basic, especially compared to TOS and it is web based, not a standalone app, so there are some anomolies in relation to that. However, the lower rate makes a big difference on crumbs (and they did throw in a free monitor).
As an example I right now have an IC order for SPX 1230/1225 and1335/1330 that I want .10 for, and it has been open for about 20 minutes. The mark on 1230/1225 alone is .10 so I just don't know.
Nic,
I hesitated...
With indexes the difference in rates is 0.25(should I be stuck to trading indexes?), but with stocks the difference is 0.60 -it's hugh. Free commission or not on closing won't make much difference? Only $8/10.
Finally I got the answer from ToS (yes, TOS service, without owning TOS, TDA is absolutely obsolete). For multi-leg options, I have to use TOS platform or the recently launched TDA platform....So I may stick around TOS/TDA for a while.
No orders of mine get filled today - yet. May be I am waiting to see if this is just one day stock rally?
@Nic, you are trying for the 1330 on the call side? with the market like it is today I would want to go 60 points away. 1350 or so. BUT with 3 days left to trade you could get away with 1340.
Well, I just got filled after 2 hours so I guess it's a moot point now. :o)
I'm starting to feel that Monday, Tuesday and Wednesday are the wrong days to pick positions. You're not getting the premiums you find on Thursdays and Fridays, but it still 3-4 days to wonder if you're to close...
Opened 50 SPX put spread 1240/1250 @ 0.20
Also bought some SPY put to hedge the spread since the short put is too close.
Which SPY did you buy, Kenny? Curious on how you hedged.
@Nic,
I bought 126 SPY, I can use them for partial hedge in case the market moves against my SPX position.
@Nic, I know what your saying about being to close. If I see that I can't find a good medium of 70 points or more with a good return I may wait till WED or THURS to open positions. But right now I will keep on the path I am currently travelling.
#SPX
Was able to get an SPX IC to fill (finally) late today. 1235/1240/1320/1325 for .20 cents.
After being up almost 20pts today, I don't think it can go up another 30+ this week.... too much negativity out there. Then again, enuf positive sentiment, I feel ok about the 47pt cush on the downside.
I'll 'sleep well' for at least one night. LOL!!
Starting to get exciting. Seems like we need to be within the 1250 to 1320 range for everybody to be happy. Fingers crossed!
@Bald, oh how right you were / are sir. Market is down today. SPX is down 38% of what is was up yesterday.
Good for all of us even if you are just on the spread side.
My IC is holding up well with the market going down a bit today. Tick Tick Tick that is the sound of time going against you market. haha
HI all, Bald, I have not quite mastered the 'greed' factor. It is a constant battle as the better returns are always a seductive call. My hope is that I recognize the possible mistake.
I must be one o the few of our group that does not have an SPX trade going.
I have found that it is too big of a mover for my taste. I have a ton of IC’S (IRON CONDORS) but don't forget that you can still lose a lot of money with spreads just as with a total naked position. I have about 400 options out there and most are spreads, but with a 5 point spread it could get very expensive in a bad market.
Not to pour water on a party but be careful at all times. Don't get lulled into thinking you are protected with a spread. All a spread really does is give you less maintenance that is fixed. One side becomes a non-issue and the one that can go in the money can break your heart. They can still result in life changing losses. Caution and cushion...
Jerry
Jerry,
Wanted to thank you for this blog. As options trading goes, the info provided by all of the blog posters is simply second to none. I have learned a lot! (second thank you to all who have contributed)
BTW, I am using OH platform. I could not pass up all the free trades and the $500 gift to my account. Still learning the in/outs of the platform though. Seems to be easy enough. Placed NFLX trade yesterday 235/240's. Looking good.
I'm searching for the cushion for sure!
@Jerry, I know what your saying, my trade yesterday for the SPX on the one side of my IC went to 2X my premium because of how fast the market went up. I kept the position because I still had 40 points of cushion left BUT if it had kept going up I would have had to make a decision at what point do you close? if it is not 2X your premium due to your spread will it be 3X?? this is something you will have to decide. Also it could be based on how much cushion you have left. Many factors come into play.
I find that if i leave as much cushion as possible I don't worry so much BUT you still need to be careful. I will be trying for a MIN of 70 points of cushion when I play the SPX for both a call or a put.
Jerry, how much cushion are you giving for your weekly's on AAPL, GOOG, PCLN ? I know you mentioned 25 but I think it would be more with the higher stocks?
@Jerry, I know what your saying, my trade yesterday for the SPX on the one side of my IC went to 2X my premium because of how fast the market went up. I kept the position because I still had 40 points of cushion left BUT if it had kept going up I would have had to make a decision at what point do you close? if it is not 2X your premium due to your spread will it be 3X?? this is something you will have to decide. Also it could be based on how much cushion you have left. Many factors come into play.
I find that if i leave as much cushion as possible I don't worry so much BUT you still need to be careful. I will be trying for a MIN of 70 points of cushion when I play the SPX for both a call or a put.
Jerry, how much cushion are you giving for your weekly's on AAPL, GOOG, PCLN ? I know you mentioned 25 but I think it would be more with the higher stocks?
Hi Fulgore, my current positions..
AAPL @ 327 I HAVE THE 315/310 PUTs
FSLR @ 117 135/140 CALL SPREAD
NFLX @ 259 280/285 & 235/230
PCLN @ 475 540/545 & 445/450
PCLN 525/530 call
VECO PUTS 40 & 41'S
So lots of cushion with only two days left.
This is certainly a bearish market. Don’t let days like yesterday fool you into jumping in and the next day it is OMG...!
Let the market do what it wants to. These weeklys are a great way to limit your TIME exposure. I like to open position with the weeklys on Wednesday / Tuesday/ Monday. In that order. As mentioned in the book, TIME is our biggest enemy.
Jerry
Oh the pain.... TTWO hitting the $14's, wow, going to get put on in a bad way on Friday, reviews for their new release are terrible.
There's so much volatility in the market. Call spreads seem to be a good idea since the VIX is pretty high.
So scary market for me as I have SPX short put @1250 only 15 points away. I looked at the chart and thought 1250 is a good support. only one trading day left,tomorrow. Let's see where things are going...
@Jerry, thanks for the input I will check your cushion when i get a chance, work is very busy today.
My IC on the SPX is holding well with the bounce back on the markets today. I guess investors didn't like the bull yesterday, it is basically right back where it started yesterday.
Current Position
SPX IC For - Put - 1200 / 1195 & Call - 1330 / 1335
Jerry, you must have tought me well because I now find some of your spreads a bit too close. :)
What premiums are you getting on those?
@fulgore:
How did you get the put spread for SPX to be so low? I had a hard time getting filled at 1230.
When do the SPX options close (expire)this week??
SPX is AM settled this week.
So tomorrow is the last trading day, Friday opening prints is the final settlement price.
The VIX is up over 17% today alone! Wow! Looks like this maybe good news for options sellers and premiums...
This week:
Monday, I got NFLX CALL 275/280 @ .16 (2.77% ROI) It was risky for my taste but at the time I had over 22 points of cushion and felt that NFLX was not going to get close to its 52 week high in this market.
@Henry, I did this trade on Monday. If you read up a bit i explain what I did to get some premium out of my position.
1 more day of trade and then mercy. I may not trade the SPX on the 3rd weeks in the future. I don't like not being able to trade on Friday to get out if something happends.
The only order filled was the one I changed from IC to VS in the last minutes - pcln 445/435 asked for 0.15 but filled with 0.16 (pcln@469)
Could be IC is harder to fill than VS???
Must be tedious even for machine to satisfy 4 pairs of equations simultaneously with human greed involved lol
@Hannah, yes I can confirm that IC is harder to fill because it has to meet more criteria. I have only done 1 IC but I had to play with some numbers to get it to go through.
This is the first time I traded the SPX on the monthly. I am not sure if TOS will release margin funds on Friday day time or during the weekend. Will wait and see. For PM settled weeklies they release it on sunday after closing.
@Fulgore - It may not be still bad to trade the monthly though it is AM settled. As long as we have about 20 point cushion to go with on Thursday evening, the AM trade shouldn't go down more that that! Just my opinion though!
http://www.cnbc.com/id/17689937
Gives pre-market futures data. As of 8:21 CDT, the DOW is up 24, and the S&P 500 is up 3.20. This jumps around like crazy in the first hours after close, but the direction is RIGHT ON!!!
Sweet Dreams
rick
Here's another good after-market for several markets:
Click on the Majors link to select your market, even change the bar times,(1min, 5 min,etc.)
http://www.forexpros.com/charts/real-time-futures-charts
@Jerry or anyone who can give some advice on how to get out of this tight spot I am in.
I have been doing great with naked puts and monthly put spreads over the past 5 months. I however have one position now which is causing me some worries. I had a put spread on SINA expiring on June 18 at 85/80. In the past few days and with the dramatic fall of SINA it got me worried and I rolled it down to next month (16 July) at 80/75 hoping that things would turn around. But things are still not turning around and the stock closed at 86 yesterday after a 5 point drop. What would you recommend me doing ? Of course I can simply close it and take in my loss (which is a little more than one month average gain). or I could roll down again with the same expiration date but doubling the number of contracts, but I fear this would simply make matters worse if the stock keeps dropping... But it dropped 40% already in the space of 2 weeks... Any other suggestions ? Thanks in advance..
Francois
@Francois,
I would try Call spread instead of Put when you roll out next time.
Check this out,looks like it will keep going down for a while.
http://barchart.com/cheatsheet.php?sym=SINA
Francois; first, and for all with a problem position, when rolling I look for two things.. Time and more cushions. So if rolling because a position is bad, don't roll it out to the same strike, Get cushion.
Now for Francois. One, there is no magic bullet. Several things are possible..
1. The market turns and you are safe
2. You close the sold and hold the bought hoping for a gain.
There are different ideas on how to correct, buy calls, sell twice as many etc etc. For me I always just close the sold one unless there is little time left, and then I close both. I hurts but I bite the bullet and move on.
FSLR is offering some real juice. Look at recent chart. Traded between $116-118 today. Closed $117. Area from $110 - $125 looks like 95% certainty.
IC 105/110/125/130 was getting .75. I got 40 just for fun.
There must be news coming. It just looks too easy. $110 and $125 are literally off the chart. I.e. Beyond range.
Do not try this at home!!!!
@Bald, HAHA "Don't Try This At Home" I will take a look at FSLR today. I do not have any maint left but it will be nice to know what is going on with it.
@All - Futures are down.
DOW -54.00
S&P 500 -5.80
NASDAQ -8.00
All futures now up on decent numbers, housing permits at 5 month high and jobless claims slightly lower than expected.
@Nic, looks like it may be an up side today. Thats ok, just don't go to high :)
I took some loss to close NFLX put spread 240/235 position today.. I see the price drop max $7 (before I go to sleep, different time zone, I live in Malaysia).
What do you think about my move? Was it a good move or I was being too nervous?
I am new to selling option. I did not feel good about my position, so I quickly took some little loss and go to sleep.. As taught by Jerry in his book..
p/s: I do not know how the stock price would go tomorrow, I just know I can have a good sleep tonight..
MR Ying,
I you don't feel good about a position, RUN, get out of it. Take a step back and look at the trade and why you did the trade and learn from it. That is all we can do on losing trades.
Chris
Mr Ying, As Chris says, when you gut tells you to bail...bail! I have the 230/235 and held on and with the stock down today it was a good move. Also as Chris says, look back and learn. But to add some, I would say never second guess your move. When making a move you don't have hind-sight available. But always the best is the more conservative. Especially when new to options. Good luck in the future.
Jerry
Jerry, I have not read your book yet and for that I apologize. You made the statement "I like to open position with the weeklys on Wednesday/ Tuesday/Monday. In that order. As mentioned in the book, TIME is our biggest enemy." It's the "TIME is our biggest enemy" part of that statement that I'm in disagreement with. To me, "our biggest enemy" is not factoring in enough cushion into our crumb trades (whether they are naked positions or spreads). It's true, we all want our "precious capital" exposed to the market for the least amount of time in our trades, but I view time more as a "bargaining chip" to be used to gain more cushion and IMHO, nothing, not time, not anything, trumps cushion...next to just being in cash, cushion is king. There are two ways to get more cushion 1. VIX - a higher VIX leads to higher premiums and higher premiums enhances the capability to go further OTM in selecting strikes for our crumb trades and 2. Time - trading time for cushion. As I've stated before "trading options are about giving up something to gain something else". I would rather take on more time (I'm giving up the benefit of less time here) to gain more cushion (the something else I want in return for taking on more time). Now, we're not talking about a lot of time here. I'm still talking about a weekly option and no matter when you enter a crumb trade on a weekly option, there's not a lot of time left till the expiration of that option. It's just that if you enter a trade on the Thursday the weeklys are published or the next day (Friday), there are just a small number of days more than entering the next week on Monday or Tuesday or Wednesday. By taking on more time (entering the trade on Thursday or Friday or even the following Monday) and gaining the benefit of the additional cushion, I'm forcing the market to have back-to-back-to-back-to-back-to-back big down days (by big down days I'm taking 25-30 points) in a row before I start feeling some real "heat" in my positions. It's going to take 3, 4, or even 5 big down days in a row before I'm feeling real pressure to exit my positions (all because I have factored in additional cushion into my trades, cushion that I gained from trading time for cushion). I'm using time as a means to factor in a level of comfort into my positions that allows me to sleep better and have less worry and stress should the market move against me somewhat.
Look, we all know that the markets can have a big down day on any given day for any of a number of reasons, but can it do it 5, 4, or even 3 days in a row? It's much less likely for that to happen, but a big down day every now-and-then...hell yes, that can happen at any time. The point I'm trying to make here is that, yes, trades entered with just 2-3 days till expiration have the benefit of time, but you do so with much less cushion and the bottom can fall out on these markets at anytime. Hell, 10 minutes after entering a trade on Wednesday some news could come out that sends the SPX rapidly heading south and those that entered crumb trades that day are going to be scrambling to take action much sooner than those that entered their trades earlier with more cushion. I realize this is subjective (more cushion, but more time vs. less time, but less cushion) and there's no right or wrong answer here. It's up to each individual trader to decide what's best for them and where their comfort level lies - with more cushion or with less time. It's kind of like Gilligan's Island: Ginger or MaryAnn? There's no right answer, there's no wrong answer, there's just disagreement. So, for me, my biggest enemy is not factoring in enough cushion into my trades and I will trade time to gain more cushion...every time. I'm going to force the market to have 3, 4, or even 5 big down days in a row before my positions are threatened. If you look at the charts, it hasn't even had back-to-back big down days (25-30 points) since Jan of 2010 (excluding flash crash). I'm currently short the SPX 1075's, 1050's, and am looking at the 1025's to short next if I can get .20 for them. I'm entering those positions now to gain more cushion (trading time for cushion). This is just my take on it, no one is right or wrong here, we just disagree on time vs. cushion I guess.
That's why I like the calls, especially in this environment. Big down days...no big deal!
I see volume on SPX for 1175 is 7700 right now at 10 cents. Similarly volume for 1200 is 10152 at 15 cents. Not sure why there would money given away at something like 1175 about 100 points away where probability is almost zero for SPX to reach that number by tomorrow morning. May be many GIGOs getting out to purchase other lucrative options?
What happens when an opening price of a stock is between your spread? Example: stock opens Friday at 87 and a spread trader holds 90/85 spread trade.
O'boy, Apple dropping like a stone, don't like this one bit. I have some 310/305 that I'll definitely loose sleep over tonight.
Saved by the bell for the moment, nice bounce at 318.5, hope that holds tomorrow.
Roadking, I would imagine nothing really happens until close, so you would have the Friday to determine if you want to get out, stay and see if it recovers, perhaps buy back your shorts or finally roll to next week.
Dave, I tend to agree with you. I get much safer trades at better premiums on Thursdays and Fridays, I guess that weekend plays a role as well, but there is one big drawback. Since many, if not most of us, lets our options expire we won't get back the maintenance until Monday. I'm studying right now if it makes sense to only use half my maintenance every week in order to open new positions on the Thursday. I had some left today and open a couple of SPX 1150/1125 with a .50 premium and that really relaxes my trading tremendeously, could make my weekly 1% in one or two trades.
Nice, nice move up by Mr. Market in the last hour of trading today. Also, much, much appreciated recovery by AAPL the last hour. I got beat up pretty bad today on all new positions established in the morning today (SPX 1075, 1050 and AAPL 285). Had I been more patient, I could have tripled my crumb income today. I'm comfortable with my strike selection, but I could of made so much more $$$ had I waited till later in the day to enter those positions. In the fine tradition of our good friend north of the border (Fulgore), NOTE TO SELF: When the price action in the markets is more bearish than bullish, don't enter the majority of your naked put positions until the latter half of the trading day. As I stated before, I don't have all the right answers yet on how to trade the GIGO on SPX...this is still a work-in-progress for me. I could have sold them same options for quite a bit more had I waited till the second half of the day to enter them. I sold several 1130 strike puts on SPX @ .05 that settle on tomorrow's opening bell (tried for .10, could not get a fill, so decided .05 was better than nothing). Then about an hour before the close, my 1125 puts @ .10 filled (truly a gift from the market gods) as my 1135 puts @ .10 never filled. So, all I need is for the SPX to open tomorrow above 1130 and those trades are in the clear...it doesn't matter what the market does the rest of the day. Of course, I don't get that margin money back till Monday.
avid_kris - you’re speaking my language. That's what I was doing most of the day.
Nic - I'm with you dude. That's a decision you will have to make. My only advice is this: if you see a trade you like and you think it's a good trade, put that money to work. Don't hold back money just so it can be available to trade on Thursday. You may not see that good trading opportunity again. But, if there are no good trades that you want to take, by all means, save some for those Thursday/Friday trades that you can open with more cushion. That SPX trade of yours looks like a nice trade...for now.
Mr. Ying, Preserving capital is king. By keeping you powder dry you live to fight another day. I had an Iron Condor going on Netflix 225/235/295/305 as a June monthly. I had 10 wide strikes and no way was I going to let it get too close to my strikes after holding for a couple of weeks. I rolled the 225/235 to a a 5 wide vertical at 215/220 July expiration for a $.37 credit. I will put on the other side of the July condor if and when Netflix bounces back up. Just monitor your position daily and be cautious. When doing an Iron Condor I will adjust by rolling to same month or next month when the deltas of one of my short strikes gets to .25 or .30.
Say, you want to sell 40 put sprread contracts, why would one NOT select AON (All or none)? If only 1 out of your 40 contracts got filled, after commissions you may end up receiving a negative premium i.e. making a loss on that trade due to commissions being greater than the premium received.
Chelski - Justy fyi, TOS does not offer AON option for options or stocks. I got a fill on 2 out of 10 options sometime back. I called them up and asked them and the reason, they don't have any specific reason. Not sure about other brokers though!
I got .20 for june SPX 1235/1230 put spd at 10 am this morn. now I am a little worried because of all the bad news coming out of Greece.
Got my fingers crossed for good opening fri morn.
@jamesaliano,
As of now, looks ok as I check Futures. I also have 1250/1240 puts which is only 17 points away. I think we should be ok tomorrow morning.
Wow, I have been away most of the day. I closed on PCLN for a loss as I didn't llike the direction the mkt was going. I also have some aapl 310/305. Tomorrow will be interesting. Hope all sleep ok tonight. My call positions look great...lol
Jerry
Got a good trade off today, Sold FAS June $22 Puts for .34, the ask for the $22s is now down to .12, hopefully it expires worthless tomorrow, good premium for a 2 day trade.
What a start, happy triple witching day all!
Ask on FAS is 2 cents, looks good hopefully market stays up.
@All, Looks like the markets are up today. It seems my IC of SPX 1200 / 1195 & Call - 1330 / 1335
will expire worthless.
More and more as I watch you all post and watch the premiums I look towards keeping some maint back for THURS to do some trades. It seems with the weekly's you can get good premium and really good cushion with a 2 day trade (incl thurs).
I may take this route when my contracts end up getting way up there like you verterans. Right now I only do 15 contract max. But when you start talking about 50+ contract I want to make sure my order gets fully filled.
I see 2 options, I can wait till later in the week and try that out or I can just choose the next strike up or down. What do you all think would be best? maybe both? I still have a long way to go before I get to this point though.
The SPX opened today (6/17) @ 1268.58. As you should know, SPX options are settled AM for the June monthly options. The official settlement price will be that figure or something very close to it. I'll be watching for CBOE to post the official settlement value. What happens the rest of the day will have no effect on the June monthly SPX options. On to the weeklys that expire 6/24 baby!
@Dave, ah yes, thanks for that reminder. I will not look at any trades until Monday because if i see something I like on Sunday it usually changes on Monday with the open.
Looks like another good week of trading has come and gone. Hope everyone did well! =)
So do SPX weeklys (not the monthly) like this week) close on Fri pm? I'm sure this has been covered before but i can't seem to find it. On to another week. Finally getting my IRA fully funded at TK. Only took three weeks, numerous FedExes, faxes, emails and tooth pulling but it appears a done deal. Not all their doing either, Schwab is pretty slow when dealing with other people's money. Amazing how that works!
It's now official. The June SPX settlement value is: 1279.40. Congrats to all who made $$$ on SPX trading this week!
safensimple, yes the weeklys expire PM on Fridays.
Just an FYI, I placed an order with OptionsHouse to sell 40 contracts and selected 'All or none (AON)" (as I had that option) and only 1 got filled and with the commissions being greater than the premium I received I would make a loss on this trade. I called OH why 1 contract got filled when I chose AON. With some investigation they had to call the exchange and was an error, so OH took the trade and refunded me the commissions I paid.
@Chelski, Good for you, you gotta stick it to them when they make an error, they take enough of our money.
@Dave G, thanks for the offical announcement. Money again this week. We will wait till monday to see how we will play the market.
Looks like I will be back to 100% cash after the rest of my trades expire today.
SPX 1210/1215/1310/1315 IC
PCLN 530/535 weekly
MA 240/245/305/310 IC June exp.
Also closed out on a TZA AUG 35 calls bought at 35 sold at 41.
Chris.
With NFLX at 248 it is tempting to trade the jun11 240/235 for 6-7 cents....there is only 2.5 hrs to go. hmmmmmm
Did anyone else jump in on the FSLR spreads? My insane IC at 105/110/125/130 is coming in perfectly @ $120.
I continued to buy more all day yesterday from .75 down to .48 cents. I know this was WAY crazy, but the chart did not even include 110 or 125 on the price range. Very odd... I just felt much better about FSLR vs SPX with all the volatility.
btw - TradeKing has introduced a new real-time platform. It's not quite ready for prime time (no option spreads yet). Just single option or stock trades. They say additional features will be added daily/weekly.
Option house is still my main broker, but I want to further investigate TOS as they have offered a nice discount. At first glance, it's platform is a bit 'busy.' I know several bloggers here rave about TOS.
Cheers all,
rick
Rick,
I jumped on FLSR this week as well....put spread only...no calls.
Wanted to know do you like OH? Have you had good success with trades going through?
It can get frustrating with a discount broker if trades are not executing properly. (especially when we are only dealing with a few pennies here or there) Heck, a few pennies might add to $100 dollar difference. Multiply that by 52 weeks/yr and I could have bought my wife a fancy dress or something. (not that I wasn't going to anyway) hahaha
It would be interesting to do an experiment where someone places the exact same trades into two different brokerages. Has anyone tried doing this type of experiment?
Looking good for this week.
@Rick - I had the the FSLR IC @ 100/105/130/135. Agree, nice to see a trade work out so well. Had another nice IC on BIDU @ 100/105/135/140 which is working out just like the FSLR. My SPY, IWM, and NFLX IC's are in good shape as well, but not as pretty as the others. Still watching close for the remaining 1:15 of time before the market closes. Have a good weekend everyone!!
Roadking,
I have had good luck with OH. Their cash, Dell monitor, and free trades were hard to turn down. Only recently does their trade ticket show the spread/condor midpoint. Doing the math in my head was a pain. I like their option screener. That's where I found the huge IV in FSLR. Their realtime platform (quotes, fills, positions) is a must. TK still requires you to 'refresh'. Yuk.
I have had no better/worse fill speed on OH, TK, or Etrade. I think fill speed is really based on limit price vs midpoint and liquidity at time of order. Because we tend to seek high IV stocks, the spreads are wider and market makers seek higher margins. Bastards :-)
Rick
Results:
TTWO 6/18/11 $16 Put - Assigned 500 Shares
EBAY 6/18/11 $31 Covered Call - Expired
FAS 6/18/11 $22 Put - Expired
TTWO 6/18/11 $14 Put - Expired
TTWO hurts but that's the WOF, on to writing calls, as far as puts go my new favorite is FAS weekly's.
TOS is very nice. I got the margin for this week released when I checked around 1 p.m. this afternoon. Thanks for morning close!
Had put an order for 10 puts of SPX 1125/1100 for 20 cents for coming week. Just checked now and it has gone through :)
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