Hi all, This morning I got back on line after being away for a few days and all heck breaks out. On Thursday I could see that apple was not going well. I closed my position as I knew I would be away. So I saved some with a small loss but was surprised to see the big drop yesterday. Today I re-opened some new positions.
I now have an Iron Condor with aapl for this week
550/555 puts
640/645 calls I received .21 for a 3 days 4%
I also reopened a Diagonal spread with AAPL for the Jan 570 and sold the 620 for this week.
I hope all fared ok and didn’t panic with the AAPL mess. If you look at these as a long term play all should be just fine. Using the Jan as a bought position, AAPL can go up or down but you keep making a weekly profit. Even though the stock itself moves around, try to be patient and take the weekly sold profits.
Now I have to go back and check all the posting.
65 comments:
Welcome back but stay home for a while, will ya? We can't take another couple of days like the last few!
ihaveop.. No kidding. It is a good lesson that I also have to reinforce now and then. When positions turn against you, cut the losses (or take the gains) If you are doing a diagonal spread and the long side is Jan 2013, you should think of it as owning a stock that pays a dividend each week. You of course want the stock to go up but that is not necessary for you to make money. It might make your acc't look bad for a few days/months, but the steady ringing of the weekly cash register will add up while you wait for the stock to move north.
AAPL and GOOG are at almost the same price right now, just a random thought of no consequence.
Any good premium on end of week spreads? What are y'all trading these days? Staying away from AAPL 'til after earnings.
Such a big run up on ISRG today, almost 40 points,closed at 585 just over 7%, I bought a few 560 puts at .45 speculating something going so high in one day must come down some in the next few days.
Am staying away from AAPL until after earnings.
Jay
Regarding AAPL, it is certainly jumping all over the map and Tuesday is earning, so be careful betting either way.. This next week will have some big players reporting so expect volatility in all stocks.
Hey Jer, With volatility expected, what are your thoughts on straddles?
Hey guys I'm back. I've done a lot of traveling for business a lot of back and forth from Germany, Belgium, Netherlands, UK. So I didn't have a lot of time to write on the blog or do trades. Like everybody I did a lot of Microsoft but got out before it went up a lot so made some nice profits on that also I did a lot of Coca-Cola Exxon mobil and McDonald's and made some nice profits. Thank you Jerry for the tips! The last couple of weeks I've been doing calendar spreads on the AEX. Buying a weekly option put or call and then writing a daily option put or call on it. Did I say a daily option? yes a daily option there wild, they're fantastic I made a lot of profits on these trades somewhere about 8 or 24% a week, ridiculous. Do you guys know about any other stocks or indices that have daily options? I'm also looking at Apple but I'm not going to do anything until after the reports.
MSFT reports positive earnings, market up tomorrow??
nope
Jerry – I’ve been following your rule in the book about getting out of a put selling position if the option price doubles in value from where I originally sold it. But in every case that it’s happened for me, the stock eventually stayed above that strike price to expiration date, expiring to 0 at the end. Which means I took losses, when if I’d only stayed in the game, I would have ended up with gains in every case.
How would you advise my situation? Should I keep taking the losses or grow a thicker pain tolerance skin and stay in on these trades?
-John
hi pascal is aex a dutch index fund..which online broker are u using as u cannot find the daily options thanks
@doctorali Yep AEX (ticker name EOE) is the Amsterdam stock exchange. I am yousing a couple brokers:
1. Interactive brokers
2. Alex ( a dutch broker)
3. Binck ( a dutch broker)
4. Mijn Broker ( a dutch broker)
All brokers have the daily options on the AEX. This week i did a 4% ROI buying a Weekly put and selling daily's against it. although the exchange whent the wrong way i still made a 4% ROI because of the daily's.
@ Nicky I was wrong BTW ;-)
thanks pascal for sharing this idea sounds more appealing to me.
MSFT $31 puts will expire, had to roll TTWO for .20 credit.
STO TTWO May $13s for $.17?? I've never see this before, why is the price moving in penny increments rather than $0.05 increments?
So before I entered the order @ $.15 and it went through @ $.17, but when I tried another order @ $.17, I got a message telling met to enter the order in $0.05 increments.
Kuai, what of this MSFT spread?????!!!!! What of I ask you?!!!
@Nicky
I have been long looking and thinking about what to do with that spread position. One thing I notice is that the delta on the JAN13 25 long is .90, while the delta on the OCT12 28 short is .83.
This means that once we are at these levels, the higher it goes, the less the out of pocket if/when you have to sell for a loss. The long will gain value faster than the short.
I'm still in a holding pattern with it. I will wait another couple of months and see what happens. It is possible (but unlikely) that MSFT will drop down nearer the strike before OCT. With WIN8 coming and lots of positive sentiment, I'm not thinking it will, but anything can happen.
What do you think about your scenario?
I will be writing puts for $28 and below like crazy, if I get put on then I'm covered, if not, I will make up for the loss that's coming.
I've been trying to "make my money back" on MSFT for the past couple of months using puts, calls and straddles. The stock doesn't move much, but it is unpredictable when it does.
For a while it was in a pattern where it would drop down weekly to around 31.90, then pop back up. Mostly, when I have tried to make money with this stock, I have had to roll or bail at break even. It is a frustrating stock to play because it moves like a knuckleball.
Jerry said a while back to not limit trading to a specific stock to try to make back a loss. The premiums are low on this one unless you are close to the money on either side, and then the stock will jump or drop and you end up having to roll.
I'm countering my loss by selling puts on other stocks like AAPL. I feel like I know MSFT inside and out, but it doesn't help predict the stock. At this point, the higher it goes, the less my loss. If I sold today I would be down about $1800. When it was trading in the 30s I would have been down about $2500, so I will continue to ride it out.
I'm glad I put some AAPL profits away before, because nothing is working for me right now. I'll hold my AAPL position until Tuesday and then decide what to do. Thinking I may stay in at this point, the upside potential is starting to get greater than the downside risk for me. Earnings is after the close on Tuesday right?
Dave
Many leaders broke the uptrend line last week. Watch out.
MSFT broke on 4/4, but it has a good day today.
AAPL on 4/13.
I have no gut to short them. Only sighed!! Cure my itchy hand using demo account,it went up and up because I could use my mind and not my heart.
Good weekend.
I am doing everything I can to sit on my hands and not touch that mouse to pull the trigger on an
Apr4 80\75 bull put spread for .20
with NFLX trading at 106. Thats $26cushion for one week. Alas, NFLX supposedly reports earnings on Mon 4/23. I keep telling myself don't hold over earnings. But a 25% drop?
Dont hold over earnings, dont hold...
If you want to hold over earnings, look at AAPL. Weeklies and May monthly paying crazy premiums with tons of cushion. I'm just waiting on the side until after earnings. By then these premiums will be cut in half...
Don't forget 9/15/11 and 10/25/11, nflx can really move.
When it comes to Apple I'll wait after they published numbers overall the last couple of weeks I'm short
I think the risk with NFLX is on the upside. They have tendency to beat consensus estimates. Won't be surprised if they do it again. Even if overall they report a loss.
Sold Apple May Expiry 440 strike puts for $1.30.
Strike 440: Thats about a 30% drop from the all time high and round about where the 200 day moving average is.
I guess plenty of cushion. Willing to own Apple at 440. Will sell some more puts of the same strike on Tuesday if I get a better premium.
After earnings, if the stock does not gap down more than 50 bucks, the premium is gonna vanish from these puts.
Also looking to sell Strike 67.5 puts of OXY May Expiry for 25 cents, however not getting my order filled.
Alex,
I believe nflx has the potential of going sharply up or down. We don't know what earnings will be, what the major investors expect, or what nflx might say about the future. I am very bearish on nflx, but I won't be surprised if there is a big move up or down. That's my take, that nflx has shown the ability to move fast either way. I wouldn't bet on a straddle working either for that matter. There is plenty of uncertainty however you look at it.
Dave
I have been doing very well with nflx call spreads had a 115/120 for this week. I had a naked put during the last earnings call, made out fine because it shot up. But that was an incredibly stupid play. Will not be making that mistake again.
My rolled up CF spreads finally expired, so next week I will have a clean slate. I believe I'm going to take a week off and watch the upcoming earnings bonanza, as just about every stock on my watchlist is due this week.
Hi All,
first. weeklyputseller, the rule of getting out when the prem. doubles is a rule I try to follow and often it causes a loss and the stock rebounds. The idea is if the stock doesn't rebound then it can quadruple and even more. The idea of that rule is to have a point where you can just say enough.. I will close and find a better stock. Not having that rule and watching an option go more and more in the money and pretty soon a play where you were going to make $1000 turns into a 25K loss. You have to have point where you pull the trigger. Some sort of stop loss point. You might make it higher or lower but do have a point where you stop. Otherwise you will find you get in a mind set of. 'well just a little lower and i will close.. yeah right.. Or it has gone down so far i will just hold on and wait.. etc etc. I have had to reinforce that rule to myself with AAPL lately, Stop the bleeding and either sit out or move to another position.
------
I have some GOOG and AAPL iron condors that are/ did great. I have some Long (jan 2013) aapl 570 and I am selling calls against them. These are down in paper value but week after week i put money in the bank and i remind myself that by January the stock might be 800+
I see a lot of you have reverted back to easy put selling. It still works and can make 1% a week pretty easy.
Good trading all and it is still eaarning season, caution and cushion is the by-word
Does anybody know if other companies or indices then the AEX have daily options?
Hi pascal can u email me at drali1974@hotmail.com..i just want to send some PM.
Weeklyput seller..i cannot agree more with jerry,if u dont have stop loss soon your loss will be quadruple and it will take you 5 to 6 months to recoup the losses as with less capital u will have less dollar income per month/week.Few months ago on this site there was a canadian gentleman(really sorry cant remember the name) who got badly burned because of the same psychology which jerry described.Personally i too have got burned as sometimes i do deviate from the rule.However with time i am now much more disciplined.
@doctorali you have mail ;-)
I finally gave up on GOOG and cut my losses. I'm anxiously awaiting nflx and aapl earnings. It seems like a good time to stay in aapl over earnings, given the recent pullback. Perhaps the investors with weak hands are pulling out for now? Hopefully a world of pain is not around the corner though.
Dave
Netfix IV is going through the roof. If history is any guide, it will collapse tomorrow.
Alex,
Here is one way you take advantage of the high near term IV, if you expect a decent move, but you're not sure which direction. Sell a 75 Put weekly and sell a 130 call weekly. Buy the 75 put june and the 130 call june. The maximum profit will be at 130 or 75. There should be a profit anywhere between 63 and 159. The weekly IV will plummet much more than the June IV. The maximum loss is about 340 at a stock price of about 30 and 200. I won't be implementing this trade.
Dave
I'm going to paper trade that, just to get a feel for how things might work out. The net debit is $346 at the market and that is the maximum loss as well. I'll see the reaction in the morning.
Dave
HOUSTON, NFLX IS ON THE MOVE
Collapsing AH
I'm not a day trader, but it would seem to me that a skilled day trader could make a lot of money on the daily high to low and back again swings in AAPL these days. "Hospitalist", I'm with you dude. I'm currently short the AAPL May 400, 420, and 450 puts. I just could not pass on those juicy premiums. Those put premiums are down ~50% (from where I sold them) despite the decline in AAPL stock over the last few days. I will hold those positions through earnings tomorrow. I hope AAPL does not pull a NFLX on their earnings. Cramer says AAPL has to come in on the high side of expectations which he says is 11.80/share on 40 billion of revenue. Their iPhone and iPad sales will also be heavily scrutinized as they together make up 83% of Apple’s revenue. Also, their margins and guidance going forward will be monitored closely. I can't wait till their earnings are over. I'll be watching the option chain tomorrow to get a feel for which direction the options community thinks the earnings are going to send the stock.
The start of an interesting day for nflx and aapl
Does anybody know if other companies or indices then the AEX have daily options?
I underestimated the drop in IV on the June nflx options. My position lost $67 even with the big move in the stock price. The strike prices needed to be closer to bring in more premium on the short side. Of course, there would be more at risk since the long cost would go up more than the increase in the short premiums.
Dave
So who will blink first, longs afraid of a miss or shorts & wall flowers afraid of a beat. Interesting.
In and out of $480 naked put for 0.70 in a day. Learned to never "Hope" for any trade. Remain in May $440 put short. Won't mind getting some shares at that price.
Glad to be out of COH 2 days earlier, beat by 2 cents yet down >5.00 this morning. Who could tell.
Straddle!!! Would have worked well, I have to try a straddle one of these days, what is the next big earnings announcement??
Amazon - Reports Thursday - good straddle candidate?
Now that the earnings frenzy is over, AAPL May 19 puts are alot less stressful to hold. The 580s at $7.00 right now (down from $37.60 yesterday, which is another story) are a nice smooth ride for 3 weeks. I know Lee likes more room, but I suspect AAPL is somewhat bullish for the next few weeks with earnings upgrades etc. and no news drag. David
Looking at the May 525/530 Put for AAPL/ Paying a little over 4%. Seems safe now that earnings are over. Analysts upgrading target today.
I closed my short position in aapl, since it was cheap to buy back. I'll wait until the weeklies come out tomorrow to sell another. My quick analysis says aapl should easily get to 700, as earnings were about 25% higher than estimates, and 700 is 25% higher than the 560 level before earnings. The 700 price will simply adjust for the high earnings. That's is what I'm thinking anyhow.
Dave
I know stock prices usually go sideways or come back somewhat after a gap up, but aapl was sold off a lot before the gap. It may keep going later today or tomorrow. I want to stay of the way, on a short perspective, for now.
Dave
"Fortune favors the bold". If there ever was a stock that applies to, it would have to be AAPL. I hate playing the woulda, coulda, shoulda game, but looking back at AAPL, there were so many ways one could of played the AAPL earnings and made some really big money. My short 400/420/450 puts are now just a matter of time before I can BTC them for a penny. They say stocks take the stairs up and the elevator down, but you can make a case for AAPL that it takes the elevator up as well as the elevator down. As a seller of naked puts, the elevator up part doesn't bother me (aside from having to chase higher and higher strikes). It's the elevator down part that bothers me and I'm not sure (even after this latest earnings report) that the recent elevator down moves AAPL has had are behind it. David, I agree with everything you said but 580 is a "we-bit" too tight for me. I sold some May 525 puts today (now that earnings are behind us)...something that yesterday, for me anyways, was unthinkable. I think the recent low of 555 will hold for AAPL. I hope that trade works out for you and like I said, with AAPL, "Fortune favors the bold", I just don't have that much bold in me. With new AAPL weeklys coming out tomorrow, I will be selling some of those also. Most of my positions at this time are tied up in two stocks: AAPL and VZ. I really do need to find other candidates to trade.
Dave G,
Interesting that you mention that. AAPL is about at the point where there was the big breakdown, then that powerful burst up, and the big breakdown again. What will happen now?
Dave
HI all, whew, AAPL blew away the shorts this morning. As said above, don't bet against one of the strongest stocks in the market. It wasn't fun watching the slide and even harder to look at it as a buying opp..
Next for AAPL is the new Ipad and then another Iphone and hints at a I-TV? I have lots of the 570 Jan longs and right now the 610's for this week, with still 5+ of Time Value in them for only two days..
I also have the same strikes with GOOG (570--610)
If a trader was looking for a pretty safe trade that pays 2% in tow days, you might do a spread of buying the aapl 580 and selling the 585 for this week. It pays around .10 now and that is with 25 pt of cush in 2 days
Nice action in TTWO today, up 3.06% on relatively low volume, earnings out May 22, it's going to be a loss, the question is narrower or wider loss than consensus, if this dips again, I might look to go long Jan 13 calls.
Does anybody know if other companies or indices then the AEX have daily options?
Pascal,
I wasn't aware of any stocks offering daily options until you mentioned AEX. It is an interesting concept though. Are they 24 hour options, or just daytime options?
Dave
Dave, if anyone knew what AAPL was going to do next, they could retire on that knowledge. I've seen many times these "hotshot" traders on CNBC (people that are paid lots of money for their opinions) be so wrong, so often. Anyone's guess is just as good as anyone else’s. My take on AAPL is this: if negative news (ereader and others), if the top two telecommunication carriers (VZ and T) trashed AAPL on their iPhone sales (remember, iPhone sales account for 58% of all AAPL sales), if several analysts came out before AAPL earnings speaking negatively about their upcoming earnings, if a parabolic move in AAPL (and history has shown what eventually happens to stocks that go parabolic), if profit taking was occurring, if the stock market looked like it might be rolling over, if AAPL shorts looked to be gathering steam and all this seemingly occurring at the same time could only drop AAPL to 555, and now on the heels of another outstanding earnings...then, what is going to be the catalyst that knocks AAPL lower than the 4/24 low of 555? I just don't see it happening. Yes, the markets could roll over taking AAPL with it (possible, but unlikely), yes, AAPL could be hit with some real negative news (again, possible, but unlikely). If AAPL does break 600 again to the downside, I'm betting it holds the 4/24 low of 555. The new weeklys puts that I sell tomorrow will be @555 or lower provided they have enough value to them, otherwise I will have to go slightly higher. That 555 low is my line in the sand, if it breaks that, I will have to take corrective action.
I like the idea of selling Apple puts for next week at or just under 555. Hopefully we get some selling in this stock (sorry longs) so I get some juicier premiums.
Any other ideas on any other stocks. It seems like majority of this discussion board is concentrated on trading options on apple, google and nflx.
@Dave/henngiss,
they start 9:00 and close the next day 16:00. they are brilliant.
i am using them for a couple weeks now.
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