Hi Traders; Well we made it through a tough week. Hopefully all of you made some money. My advice is to avoid opening positions in any of the index type of available trades. There is just to much unknown until this is settled. As the reported deadline of this coming week approaches, I would imagine that the two sides will make some concessions and the president will sign it. Well, lets hope so! If we get a budget, the market should take off.. should!
Even though we have introduced various new kinds of option plays, Fulgore demonstrated this past week that plain old vanilla naked puts can and do make money in this nervous market. Various spreads can help with margins and maintenance and allow more positions, but the simplicity of naked puts is still a very viable play.
For those that are impressed with the movement in PCLN, don’t forget that earnings come this week.
For me I will wait until I get some direction from the budget etc. Trade careful and don’t try to ‘outguess’ the market, it will eat your lunch.
109 comments:
@Jerry
You probably wish you had never mentioned these calendar spreads, but here's another rudimentary question that is probably obvious to all but me. Say you establish the Aug 400/Jan400 AAPL spread as per your last post on previous thread. Suppose AAPL jumps over strike to ITM due to debt limit settlement. What is the exit strategy? Can you roll to the next week on the sold leg for additional premium? I'd like to know these things before seeing them in 'real time'. Having trouble getting my rapidly aging mind around these matters. Thanks, c
HI Safe, yes too big of a move creates some problems as the Jan will not go up as fast as the near options. What most will do is to buy back the sold Aug calls of Aug 5 and sell the Aug 12 at one strike higher. You will still make some $$ and get closer to the existing stock price. Each week/month you do that until you hit a time where the stock either drops some or levels off while you play catch-up. The Jan will also be appreciating but also losing some of its time value as each week gets closer to the Jan strike.
There has been some changes in strategy with the arrival of weekly’s. But as witnessed with the earnings of GOOG and AAPL and the big jump in stock prices, it shows that there is no sure way with any style. Watch out for PCLN this coming week.. who knows
Safe, I should add that the goal of continually rolling the sold call is to eventually get above the stock price. It will then expire and you can either continue to roll to another strike, close the complete position by letting the sold call expire and sell the Jan call.
The end result in a perfect world is to make money each week and if the stock has gone up pretty good you will also make money on the bought Jan call that you can now sell.
Thanks Jerry, I'm gonna give it another try....after the debt ceiling debacle!
Thanks Jerry, that helped me as well.
But how do you handle a situation where the stock drops, let's say AAPL goes down to 385? The value of your long call would then drop 6-7 points, over shadowing the gains in the sold call and all other crumbs that may be going on. For example, 35 AAPL Jan400 would then be $21,000 under water for the week.
Would you wait this out or roll the long call somehow? I remember AAPL going from it's high of 369 all the way down to 310 before returning up to new highs.
A deal has been struck.
http://finance.yahoo.com/news/Its-a-deal-Obama-Congress-apf-4225932286.html?x=0&sec=topStories&pos=1&asset=&ccode=
The question now is will the house pass the bill?
I might open some put spreads on SPX with the VIX being so high tomorrow. Hopefully this will give plenty of cushion and if the market does tank I hope it doesn't drop 100+ pts for the week. Anyone else thinking the same?
I will if I can get .10 with reasonable cushion. I see the debt vote as a non issue, the concern is the economic data later in the week.
IMO MMM has been overbeaten. Initiating neutral/long cal spread today. RK
Opened 1210/1200 put spreads on SPX for 1.44% ROI. I think I rushed into this trade, hope the week goes well though.
My spread for SPX 1150/1125 just went through for 20 cents.
I have 1170/1165 open at .10 but so far no takers.
@ avid Kris
Thanks for taking my bid, i closed my position. I had that position initially, got bounced out on a stop. Opened it (more qty)again for 0.50 Friday and when I saw the SP drop today closed for 0.20. In the end i walk away with a profit but now do not have a "stop" plan.
I closed it not because i think it will hit 1150 but i will be away from my computer all week and still do not have a solid "away" stop plan in place (even the sell with sold put is 3X ask did not work well since the ask ran up to 3X on a small 15 pt move). Enjoy the money i left on the table.
RHM
I got 1175/1170 for .10 filled
Ok, trying that one now.
You guys aren't waiting until the vote today?
@RHM - Thanks for your 20 cents, I am grateful :) Nice trade making 30 cents on a day!
Usually in the last 3 months I have been trading, I have never seen 1150/1125 go to 50 cents even on the opening day. I would think the reason that it went up that much on thursday/friday of last week was due to the debt vote uncertainty. Otherwise I would do the same thing that you did almost every week even if I could make 15 or 20 cents!
Also, setting up auto stops in spreads is almost impossible unless you are willing to accept erratic results on closing trades. One of way closing losing spreads would be to close the short part alone if it doubles (using the premium doubling principle of Jerry), but this has its own set of +/-.
@Josh - There is minor element of risk there on the vote, but hoping it to pass almost 99%. Once the vote is done, volatility will be low and the premium won't be juicy on SPX like it is now.
I have been trying to resist the temptation of buying calls, but I just could not do it at these levels, I gave in and purchased FAS Sep 17 $22 Calls for $2.50, the bid ask is now at 2.66/2.69, I should have bought more.
I'm just not getting filled at Optionhouse :( I set up two identical orders at TOS and OH and the TOS one filled almost instantly, the OH one still hasn't been filled at all.
I googled around to see if other people were unhappy, and although I didn't really find anything specific, it does seem as if OH is using something called 'payment-by-order-flow' where they route to brokers that give them kickback "if all things being equal". They are apparently also piggybacking on their owner, Peak6.
All this makes me wonder if OH always fill at a couple of cents lower than the market. It probably doesn't make that big difference for most, but when trying to get 10 cents far out it seems to throw a wrench into the cogs. Anyone else having trouble getting filled at OH?
I have an account with OH, I opened because of the low commissions, but I experienced the same as you, also a lot of partial fills, now I use TK as my main account, no problems with them.
I did the same test as well, same exact orders on TK and OH, TK was filled OH was not.
Nic, I'm with OH and have been getting fills in a timely manner. I sometimes feel it's a timing issue on our part.
I'm sure it could be, it's just that I'm using TOS and OH in parallel and seems to be getting different results.
@ Avid
Yes. What i had been doing when i was away up to now was set a trigger based on the sold put only (ask etc on spreads are too erratic). I used 3X since 2X had been close on swings. It worked well (ie did not get triggered) for 4 weeks but the market had been pretty bullish/flat
This week i opened the spread at 0.20 on Thursday. The 3X point on the sold put was 1.65. So i set a stop for if ask >1.75 then sell the spread at market. The SPX dropped only 15pts (155 to 140 pt cushion) but the ask on the 1150 jumped to 1.70. I got dumped out at 0.60! Bought it back at 0,50 (more QTY) to get a profit.
Is it because of the debt thing? Is it because of MM? Don't know but i need to find
a better way that can "lock" in 3 to 4X loss max per "bad trade". (which i have built into my yearly ROI).
Anyhow need to crunch the data over the past 20 years or so and look for something.
Regards
ps: Type trigger >1.65 (which means 1.70 on spx)
@RHM - Thanks for the clarification. Initially I thought you had a close order on the spread itself. If it happens on a single leg, then this is cause for concern. I have been trying to set up this kind of stop as well, but I guess there is no easy way to step auto stops like stocks.
So the premiums for AAPL calls look very attractive near the money. Time for a nice high yielding calendar spread? Market seems to be flattening out a bit.
anyone taking the chance on PCLN? juicy premiums but lots of risk as well.
Road... I am leve PCLN alone.. to much risk with world events, earnings etc.
My positions as of this morn
cal spreads-Jan and this week=
AAPL 390/395
" 400/400
BIDU 160/165
vertical's
AAPL 360*365
370/375
As I mentioned I will post my results from last month. They are below
Monday was a holicay here and so i didn't have a chance to get on. Also I am not opening any new positions until Wed or Thurs of this week.
All Trades are Monday-Friday Only
Week 1 - Puts - SPX 1275/1280 = +1.2% Net (After Comm)
Week 2 - Puts - SPX 1235/1240 = +2.2% Net (After Comm)
- Calls - SPX 1355/1350 = +.25% Net (After Comm)(Opened the IC to my put leg)
Week 3 - Puts - SPX 1225/1230 = +3.2% Net (After Comm)
Week 4 - Puts - SPX 1250/1255 = +1.2% Net (After Comm)
Total Return For July = 8.05% NET
My target is 4.8%, but there was free money on the table for 2 of the trades and I took it.
Note: as you can see if I get .05 on the premium my return is .25% Net (this makes me cry) haha. I only open this side of the put spread to make it an Iron Condor if I'm 100% confident I have enough cushion, otherwise I would rather not waste the money I have on my put leg for .25% return.
Impressive Fulgore. So when you get 2.2% resp 3.2% you manage to get .15 and .2 on those spreads? And always with 20 points cushion for every day left?
Impressive results fulgore. I netted 6.54% for july. IC still scares me and I only use it once or twice per month at most. How much cushion do you usually leave for the week? I aim for around at least 80 points on SPX.
It's like a wild WOW!
@Thanks for the comments. I just wanted to post to what is possible with the cumbs method and taking it as safe as possible.
@Nic, Yes you are correct, 2.2% was .15 and 3.2 was .20. My cushion works out to be 16-20 points a day, BUT I usually open up a position during Monday early in the afternoon to late in the day. This means that I get 4 days of time decay instead of 5 which is nice for the same cushion.
The .15 and .20 are flux. They were being offered and i took them. I usually go with .10, but if the market wants to give me .20 for 100 points for the week I will take it.
I would really love to take the .05 positions, but my return is way to low to do that due to my commissions. This would be alot safer. You USA people got it easy !!
@Henry, thanks for the comments. I do about the same as you. I get 80-100 points of cushion for the week depending on what the market is showing and what day of the week it is. I basically look for the lowest strike that gives me .10. This is typically the last $5 spread on the put or call side.
ToS will show me .05 and i will change it to .10 and see if it goes through most of the time.
This week I have no positions yet. I don't like what is happening in your white house. I will wait till WED to open anything right now. And I think it will be the call side.
The last $5 spread?? Huh, that's 1100 on my chain... That would be great.
Jerry, about those diagonals.
How do you handle a larger drop on your 400, let's say AAPL goes down to 385 or 380 this week?
Would you wait this out or roll the long call somehow? AAPL's next boost may not be until late September I guess.
I just checked TOS commissions today and they have merged TD Ameritrade pricing in TOS. I see now that options pricing listed as 9.99 + 0.75 cents per contract. They have not mentioned about whether only one ticket charge applies to spreads. If anyone is on $1.50 per contract, this is the time to call TOS and ask for a better rate.
SPX drop didn't look good today. Hope it comes back up or stays neutral tomorrow, else I will have to think of exit strategies on Thursday!
Didn't like the way market is going. I closed my SPX 1150/1125 at 10 cents.
I just closed my SPX 1185/1180 puts for .10 loss, I don,t like the looks of this at all. Should have bought instead of selling.
@Nic, Sorry Nic most of the time during a normal week the last $5 spread is .10 cents. But if it is not I usually go to 100 points away on a normal week and try and get .10 out of it. If it doesn't go through I will try the 95 then the 90 etc..
@avid_kris - In canada it is $1.50 per contract :(
I just opened up some SPX for this week. I have the 1165/1160 put spread. I have my premium at .10 but it went through at .25 Thanks ToS! This is not a full position and low qty of contracts. This gives me about 88 points for 3 days. now that i am posting this the SPX is down 11 points so i now have 78 points for 3 days.
CUT AND RUN
@Jerry, Fulgore, others etc
I have found with SPX spreads using the 2X or 3X ask on the sold put to trigger a mkt sell on the spread can be triggered falsely.
SO an open question
Hi forgetting about auto stops etc but lets say you have set up a put spread on Monday. It has given you 0.15, it is 80-100 pts of cushion which means looking at weekly data you are probably at a 96-98% chance of being successful.
This still means on a 52 week year you can expect 2 bad weeks. 2 bad weeks can wipe out much of you hard earned 50weeks of 1% ROI so the open question:
Q: When do you start suspecting this could be one of the two bad weeks per year? What do people use to say I am closing out?
SPX drops 5%?. Spread price climes above 5X what you paid? Etc. Is it use the 2X-3X sold put ask rule on Mon-Tue only etc, Is it when the spread gets within 30pts of sold PUT? etc..
Thanks in advance
RobM
@Rhmoptions I will let Jerry answer your question as he is the vet in positions of that manner.
Personally I would close out the positions at 3X to 4X my premium receive. This all depends on how much time is left, what is happening in the market, what is happening in the white house and wall street, and how much cushion I have left.
@All Just closed out my SPX put spread I posted. I saw oportunity and took it. ROI Net (after comm) is 2.5%.
I will look to open another position with more cushion and lower return right now.
Here is my first test of the diagonal -
I bought 1 AAPL Jan 12/August 11monthly 390/405 for $3000.
I also bought a Nov 11 put for AAPL 300 for $350.
Still have some brain cells missing to understand this diagonal thing completely, but this is the start of my experiment. I bought the put for protection just in case of a major drop atleast during part of the span.
Most likely, I will be traveling entire next week or 2, returning only in the nights. I won't be doing any SPX spreads for next week.
Hope this trade is meaningful :)
Fulgore,
When you open up your SPX spreads for minimal credit of 0.10 on Monday afternoon, are you looking for 5 days of cushion at 15-20/day (which would be 75-100 points OTM or 4 days (60-80 points OTM)?
thanks,
ongba
@ongba I look for 75-100 points a day would be what I look for. I would start at 100 points away and try and get .10. If I don't get it I will start to move closer. Mind you these are all on normal weeks that don't have debt crisis lol.
Basically the farthest way I can get with .10 premium I take. When it gives me .10 I move to the next strike or 2 away and change my premium to .10 instead of .05 (which it most likely will be). This usually goes through after 1 hr max.
We saw the market rally 5+% in one week, and now we're seeing the market tumble 5+% in one week. Wow... Anyone speechless?
It's funny (well, not it's funny) that we get at least 100 pts of cushion, meaning we don't mind the market to go down this much, but when we have say 2.5 days to go with 60pts left of cushion, we get scared! LOL
@ Fulgore. Thx
Question: When you say you go to furthest away where you can get 1 0.10 premium is that a 0.10 BID on the spread or are you estimating (eg with a bid of 0.05, ask 0.15 somewhere inthe middle?) etc
cheers
@rhmoptions, I use ThinkorSwim and so when i choose sell vertical put they show me what the premium is for the last sale. I just look at this number and go farther and farther away until it shows .10 and then .05. Once this happends I go 1 or 2 more strike to be sure it is correct and then lock in at .10 instead of the .05.
@Henry, this move was all based on the debt crisis. We will still see some aftershock of it for this week. I think next week will norm out a bit.
If you think about it there is nothing holding the markets up so high. They have been going up slowing for the past 8 months for no reason. There is still a recession, there is still high unemployment etc etc.. Most people say that the market should be coming down by now but it hasn't. The debt crisis thing may have triggered this move finally, but we will have to watch and see if that is in face true.
@fulgore, thanks so its based on th elast price that went thru
Market comeback!
@Fulgore - I have been reading your post and you mention you have been using spreads to free up margin and maintance. What do you look for when setting up a spread? (20% OTM?)
Thanks
Strong resistance at 1250, let's hope it holds.
Fulgore,
Thanks for your reply! May I ask how long you have been using your system for and has there been any months where you have taken a loss and if so, how big was the loss?
Thanks again,
Ongba
@Ed I use weekly's and with that said I use a point amount. For the SPX I use around 80-100 points for the week. With other stocks like AAPL the point spread may be 30-40 or so.
@ongba, I am by no means a veteran at this. I am very new. I follow Jerry's method he describes in his book but apply it to weekly's.
I use SPX spreads mainly for the following reasons:
1. I do not have enough capital to sell naked puts on some stocks.
2. I like that spreads have a set amount of maint required.
3. I have not taken a large loss yet and I hope not to. I can not give any advice on this area. Jerry would be someone you would want to talk to regarding this using spreads for weeklys.
All please keep in mind my posted earnings are high for July. This should only be 4.2% approx. I always pick safety over return.
Hi,
Coule anyone from Canada comment on the tax treatment of naked put writing and spreads?
Tank you
Patrick
@Fulgore,
Good job with the statistics and trades. Thanks for posting. RK
@Patrick, I believe that when selling options in almost any form you get 50% taxed on these profits.
For buying an option (for example just a "buy single") you can take the profits and apply them to the TFSA so you don't pay any taxes on these profits.
The above information may not be100% accurate as I am not a tax advisor. I would suggest just calling your bank or TD. They have people on staff that can tell you this information over the phone and/or on site.
@Roadking, thank you for the comment, as long as everyone on here is making money i am happy, so lets keep the candle burning.
Fulgore,
Thanks for the ins and outs of your trades. Having the "last" trade visible is very helpful compared to just the bid and ask, since we want to end up in between. Particularly on a spread.
I use Trademonster and just added that column as 'visible'. Keep going!
George
Red this morning. We begin the slide south. This could get ugly. Anytime there is a 250-300 point slide in one day, you've got to start thinking about where this could be going. If more and more people start to sell we could see panic again. RK
Lots of Red today. I picked up the 1185/1180 SPX for .20. This gives me approximately 50 points of cushion for 2 days. With the SPX down already 22 points it has to fall another 22 today and then 22 or so more on Friday to get me shaking. I will keep a close eye on it and if i feel threatened I will pull out.
I have a Schwab account for income investments other than my options activity. Can't afford their commish on options. There is a midlevel streaming platform there that gives last trade, bid asked volumes etc in real time at no cost, called 'streetsmart'. When I am disciplined, I always check there (running in background) just before I click the order button on TK. This morning I filled an AAPL IC with the call leg but forgot to check 'realtime'. Got filled but at .06 instead of .12 that was probably available. Thanks for the reminder above. Lesson, get all the info available before 'the leap'.
@All, Right now my if the SPX goes down another 5 points to 1225 I will pull my current position. We will see how it goes.
Man what is going on every time I look at the computer the market has dropped another 5-10 points.
@james, it could finally be happening. This pull back has been a long time coming i think. We will see what happends.
Got out of my trade. Came out about even on the deal. I don't want to be in this mess right now.
I got out of my AAPL diagonal trade at break even. But interestingly I just checked again now, I could have made about 7% profit if I had stayed on for another 15 mins during the market drop. Also it did well early morning when the market was even as well. Looks like I had all weather protection, but anyway chose to get out.
@All I opened up some 1145/1140 put spreads for the SPX - 82 points of cushion for 1.5 days.
I feel better about this trade.
Just like the last one if i feel threatened I will exit.
Jerry,
Did you dump your AAPL and BIDU?
Rick,
Hope you are safe!
Hope everyone is keeping powder dry! Be careful out there. All I can say is WOW! RK
Wow,what a knee-jerk reaction today! Anybody else see this as good buying or selling puts opportunity?
Today after lunch, I checked the lowest available spread for next week. It was 1025/1000, at that time selling for 10 cents. I had to go out and I put an order for 25 cents assuming more likely, it will never get filled. Just got back and checked at 7 pm, the order has filled at 25 cents and current premium shows a spread of 1 dollar now for 1025/1000. I guess I am in a spot now, unless this recovers. Keeping my fingers crossed.
What a day! I opened a SPX weekly1170/1165 put spread this morn. for .15 credit then panicked and BTC before the close for .50 debit I couldn't stand it any longer ,lost 150.00 bucks but at least I can sleep tonight, I did buy back several calls cheap, but I am in trouble on a few short puts but I still have time for a recovery if one comes. For now I am staying out of SPX till this market turns.
It looks like a capitulation day... either it's already here or coming soon.
But it could be 200 pts lower too. I'm not going to try and catch the falling knives.
Might buy a few calls tmrw if I can't stand to step aside, but no unlimited risk situations.
-----
Did you see the Bank of NY is CHARGING A FEE for depositors with large cash balance? Or that Treasuries were carrying negative interest for a while today? Imagine paying a fee to somebody to keep your cash for a month or two.
That, ladies and gents, is panic.
I think I looked at the last bid/ask to come up with my 1 dollar spread above, which may be incorrect I think. The order got filled when the spread hit .95/.70 around 2.45 p.m. when I check TOS history.
I have never done phone trading, but I thought it may be necessary if I traveled. It looks like based on revised TD Ameritrade commission schedules, they charge 35/45 dollar fee now for phone trades. Earlier it was the same price as online orders if I remember correctly.
Help!
The one day I'm completely out of pocket and on airplanes the market takes a huge dump. I still have the AAPL 370/375 and 360/365 spreads.
Plan is to wake up tomorrow morning and see where the futures are indicating and see how pre market looks. If I have to dump at a big loss and my sold strike it in the money (375), is it better to leg out or try to sell the spread to close? Meaning I would BTC the sold put and then if the market kept diving my bought would make some back? With <1 day remaining these have little time value.
What's the move to save me? Get out all any cost at the open or wait until an hour or so into the opening?
Thanks in advance, everyone...this is rough!
Hi all, As I have said over and over this is a tuff market. Trade very careful!! The world is a weird place and money is scared. But saying that i expect a rally tomorrow. Once covering of short sales start it could...could be a big rally. But I am just guessing, so regarding the market, let it give you direction don't guess. A no trade is better than a guess.
Jobs report due tomorrow. Could be good news?
http://www.prnewswire.com/news-releases/linkup-predicts-better-than-expected-jobs-report-on-august-5th-126772273.html
@Josh - Close both parts of the spread as soon as market opens if you are able to tolerate the loss. It is very hard to predict how things are going to be tomorrow though I expect it to be neutral to moderately up. Please ignore if not appropriate!
Josh, I know the feeling, just got myself out of SPX 1195/1190 but it looked disastrous for a while. When it was at 1215 for the third time I decided to buy back my 1195 and I kept the 1190 put down to 1204 when I chickened out and sold, but that saved the day.
I'm no expert but if it looks bad tomorrow I would consider rolling to the same spread next week on Apple and hope for a recovery. Someone more experienced may chime in, but you should be able to roll for several weeks if needed (please correct me if I'm wrong).
This is my (stupid maybe) theory on what has happened here.
Key players in the market have been dreading this jobs report - reported on CNBC that this monster had grown to be negative figurs etc.
With the market falling, hitting support levels, the extra fear tipped it over.
What then happened? Stop losses got it, selling pressure rises. Then margin calls get called, with more stop losses hit and it really dropped.
We then had the intra-day reversal, because it was oversold and the spx closed around ok levels at 1260.
But, the huge volume reversal meant many players were now out of the market - stopped out.
If anybody watched yesterdays CNBC pre-market show, one of their analysts predicted a potentially worrisome day, because who the heck was going to get into this market before the jobs report?
So many were stopp-lossed out as the spx broke support, but didnt want to get back in.
Everybody was sitting out, waiting for this spectacularly bad number. Others got out in anticipation of the number.
So, with all this selling pressure and buyers refusing to enter again until the jobs number is out, yesterday was an extremely rare day where nobody wanted to come in (yet) and snap up bargains.
I have a feeling if the number (pre-market) is anything but absolutely horrific, it will be extremely positive for the markets, and might see a big rally.
Lets be honest here - has anything fundamentally changed in the past 7 days?
We all knew the deal was going to be done, the economy has been running like this for a while - there is absolutely no reason for this panic selling except for this rumour of the most horrific jobs report since adam was a boy.
Now, we are seeing some sources expecting it to be not too bad.
Funny place this market.
I rolled my positions for the first time, 3 rolled all for credits, whats to stop one from doing this all the time? Before I use to think if I get put on, who cares? I sell calls, but with the way things are going, I thought I would roll, so I made a little more premium, moved to Sept, and went lower on the strike price, seems like a win, win, give the market time to recover, make extra cash, move further away with the strike price.
Roadking2,
I'm doing well. Thanks for asking. I rolled my AAPL and GOOG spreads out and down to AUG. Collected a little more premium and 15-20pts more cushion. Looks like both spreads might have held up, but not with another free fall like today. I also have diags on both. The long sides were ATM on Monday with short side $5-10 higher. My concern is if I should sell the longs at a big loss or resell weeklies still above those OTM calls. Having second thoughts again on diags. They just suck money with any big move up or down.
How's everybody holding up??
rick
I could make a movie about the last 2 weeks called "Hey dude, where's my profits?"
As I somehow knew would happen the diags ended up eating my lunch. Easy come easy go! Think I may be giving them a rest for a time.
Also my auto-trading service put a bunch of index based spreads out last week in front of the moving freight train of the debt nonsense. No more auto-trading for me.
Amazing how months of work can be undone with a handful of trades (with what I *thought* was limited exposure) in a couple weeks. (or even days)
It's time for me to get back to the basics; i.e. weekly vertical credit spreads for good ole crumbs, entered into on Tuesday or even Wednesday. (that model would have kept me away both last week as well as this one)
Looks like a market rally today :)
Cut and paste from yahoo news -
--U.S. payrolls increased 117,000, the Labor Department said on Friday, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, but this was mostly the result of people leaving the labor force.
The payrolls count for May and June was revised to show 56,000 more jobs added than previously reported
The report was the first encouraging piece of economic data in some time.
---
AAPL looks better premarket. Had a restless nite as market tanked ysterday to the tune of 15 points, leaving my put leg 370/365 on an IC vulnerable. Guess I'll try to hang on 'cause gettin out looks ugly. Good luck to all. What a ride. Remember, its only money!
@Kris - thanks, I'll see how the market open feels.
@Nic - with the market opening up would you still roll the spread? I could probably roll for a net credit but then I'm sitting on a close to ATM spread, which isn't great for next week. Or I could wait and hope for the market to stay above 575 for AAPL and cross my fingers today...worst case I own a bunch of AAPL at 575, right?
Let's hope everyone takes this opportunity to buy buy buy today!
@Josh Go AAPL go....I can't really afford a bunch of AAPL tho I'd love to own it!
ECB - market comeback for real!
Bailed out of AAPL put 370/365 for net .50 which cost me a little but better than being put to 1500 shares ($550,00). Don't think TK would wait while I sold the house, the cars, the boat, the dog and the wife and kids. Prpbably not much net there either. This is a hazardous game in a wild market. Calls lookin' good tho.
Josh, I'm a novice just like most here so please take my 'advice' at face value. I did get hit pretty hard a couple of weeks ago and didn't do anything, had I rolled one week my trouble would have gone away, which is not to say it will this time.
I would consider rolling in the last hour, when I'm positive that it won't recover enough to get me out of trouble. It looked promising for a while and it could go either way right now, seems stuck at 370. Apple is strong and the market knows there will be excitement in the fall, but if the whole market continues down...
Will be a very nervous day though. Good luck!
Positive!
I rolled some out to next week on a partial fill...waiting for the rest!
@Josh - Nice.
Market is back to normal atleast for now. I was worried when I saw SPX tank 30 points and people were selling like there is no tomorrow!
Hope cooler heads prevail next week so that market gets some stability.
Partial fill you say? Using Option House?
@Nicky - nope, using Tradestation. It actually got filled quickly, for some reason there was 1 contract unfilled for a couple minutes but it went. weird
Hi everyone
I should have not touched SPX in this week as mentioned by Jerry..
When the market open high today, I thought it was a rally today, so I sold 1165/1160. Just right after I sold it, the market plunged.. when it went down to 1169, I was like.... I think most of you here know how it feels. Then out of a sudden, market rebounded, it was a chance for me to get out of this crazy market. I did it, and 60% of what I earned since last two months got wiped out..
How would you handle it if you were in my situation?
(Collective sigh) - the madness is done...for today at least.
I rolled 20 spreads to next week for aapl 375/370 at a credit of .75 and bought back 10 at $3...for a nice fat loss. Will have to unravel the rest next week.
What would have happened had I done nothing? Would I have gotten assigned 1000 shares and gotten a call for $373,000? The wife wouldn't have been pleased...
I've identified the reasons I got nailed this week. They are pretty obvious and show that I'm an amateur:
1. I got greedy on Tuesday. I had sold nice, far OTM AAPLs and GOOGs at 365/360 and 565/560. Those were safe. I decided to sell 30 more at 375/370 that ultimately got me in trouble. I got .13 premium for the spread, which I should have known was too much juice for safety. Should have sold more at 365 instead.
2. Should have listened to whoever recommended sitting out this week...crazy volatility and emotion is the enemy of Jerry's strategy.
3. Should not have had positions on while on vacation. Golf is fun but losing money isn't a good trade-off.
4. Should have closed out at a loss way earlier than 30 minutes before expiration. Like 2 days ago.
Woulda
Coulda
Shoulda
I'm paying for my education, as they say.
Have a good weekend everyone!
Hello fellow traders,
I know most of us lost some money getting out of our positions, but hope you all got out to live another crumb trading day!
This market is rigged! LOL. If you had a 1200 spread strike price, you would've lost big as SPX settled 67c below 1200 at 1199.23.
What I've learned in this volatile environment is not to put on an IC as I had the 1305 call spread and I couldn't get filled to get out of my trade, but eventually did over the phone and at a better price than I would've got.
wow, some scary times for many. See new main post.
Hello all. I'm new to trading options and just started paper trading this week. I was looking to open a new spread for next week and am noticing there is little to no open interest when looking for a cushion of 100 to 150 points. Let alone I can't seem to find the right bid/ask price combination to work.
Is this a situation of sit and wait until I find the right combination or do I change my strategy?
Thank you in advance for your help.
I'm sorry. Just a little clarification on my trade. I was using the S&P Index.
Hi nae, the discussion has now moved to Jerry's latest post, so you may get a better response if you move yours there.
Trying to get filled as far out as possible is probably what most of us fight every day, it is one of the difficulties with crumbs as we really want to be on the .05 to .10 edge of the market. I would say that 150 points may be a little optimistic unless you go for the $25 spreads, but it also seems dependent on the broker you use and how they route the orders.
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