Kevin_in_GA
4,599 posts
msg #117873
- Ignore Kevin_in_GA |
1/23/2014 3:15:07 PM
Just updating this:
Orders for the 31 Jan expiration options (I'm using TradeMonster for testing this strategy):
SELL APPL 530 put (10 contracts) @ 6.35
BUY AAPL 520 put (10 contracts) @ 3.90
Net credit of 2.45 per contract
SELL AMZN 390 put (10 contracts) @ 7.75
BUY AMZN 380 put (10 contracts) @ 4.75
Net credit of 3.00 per contract
|
bka58
49 posts
msg #117902
- Ignore bka58 |
1/26/2014 9:59:33 PM
There have been studies done to show that the odds are more in your favor when the volatility rank for an equity exceeds 50. Volatility rank can easily be calculated from the 52 week high and low values. Check out tastytrade.com. Under the shows section, select Market Measures. There have been many different studies done to determine the sweet spot for entering and exiting various trades.
|
BarTune1
441 posts
msg #117923
- Ignore BarTune1 |
1/27/2014 8:51:07 PM
Its a good thing you decided to go with a spread when you sold those AAPL puts!
As I mentioned earlier, with each uncovered contract sold you are assuming the same risk as if you had bought 100 shares at the strike price sold.
|
Kevin_in_GA
4,599 posts
msg #117929
- Ignore Kevin_in_GA |
1/28/2014 8:54:38 AM
Although I doubt anyone really predicted a $50 drop in AAPL after they posted what were actually very solid numbers, the week is not over yet.
|
jimmyjazz
102 posts
msg #117930
- Ignore jimmyjazz |
1/28/2014 10:24:00 AM
True, but this market is very "twitchy". I like to trade spreads myself, but sometimes I get frustrated with my wins that are capped. It's the old covered-call "picking up pennies in front of a steamroller" argument.
If you're good at predicting direction -- and Kevin, you are good at picking direction -- it might be a good strategy to just trade long calls and long puts when the near-term calendar of the underlying shows no events (earnings, dividends, etc.). If such an event is on the radar, trade the spread.
|
jimmyjazz
102 posts
msg #117931
- Ignore jimmyjazz
modified |
1/28/2014 10:31:13 AM
On a different note, in my experience it's not wise to trade spreads unless you're willing to hold until expiry. They are not good proxies for long or short the underlying. The greeks are largely offset (long delta + short delta = low delta, etc.). I honestly don't know if that's the REASON spreads don't seem to go in the money until the last minute, but it happens, regardless.
|
MHlousek
4 posts
msg #117943
- Ignore MHlousek |
1/29/2014 12:53:37 PM
Hi,
I am Martin from Germany. I was reading your posts.
I am trading Options many years and would like to give you some ideas.
I use Interactive Brokers.....there you have with the most liquid stocks all instruments like futures, cfds, stocks and options.
I trade very successfully the spreads and can even hedge them if necessary...
example
I first trade one spread, mostly when the stock is moving...so I wait when the stock is moving and look for resistance, bollinger bands...Kevin gave me with this post a good idea too...thanks Kevin....
so once one side is done I wait when the stock recovers a little or change direction and then make another spreads...condor....so my wings are wide enough.....
in case the stock threatens one of my wings I set up a CFD position that I calculate, not for all option positions but early enough to protect the wing, once the stock comes closer i hedge all options...e.g if have 10 options in IBM i will than buy or sell 1000 CFDs so that one wing becomes like a covered call (profit) and the other wing will expire worthless (profit as well)...it takes a feeling and training but it is worth...try to be imaginative...options gives plenty of opportunities to hedge, change, and so on....
it is similar to reverse gamma scalping
http://sellacalloption.com/2012/09/25/reverse-gamma-scalping/
greed is the most obstacle for all traders....I better pocket 5% per week for sure with a 20.000 Dollar margin.....it is a lot of money guy.....
trading should be fun!!!!! many traders forget it.....
have a nice day....many greetings form germany.
Martin
|
dashover
226 posts
msg #117945
- Ignore dashover |
1/29/2014 2:57:20 PM
Martin,
I have traded options as well, but my results are very poor.
Could you detail a position from start to finish , perhaps even posting the graph and rationale why you entered the position and whether you start with a straddle or just one leg and then turn it into a straddle and then sell calls at resistance etc.
I would be very interested!
Thanks!
Dash
|
Kevin_in_GA
4,599 posts
msg #117949
- Ignore Kevin_in_GA |
1/29/2014 5:35:35 PM
As would I.
Looks like I will get fried on the AAPL puts (and AMZN is not looking all that hot either). That is why I paper trade and use this forum as a sounding board - someone here usually has a wealth of experience in almost any area, and I am always learning.
Kevin
|
MHlousek
4 posts
msg #117953
- Ignore MHlousek |
1/30/2014 7:51:08 AM
Hi Dash, hi Kevin,
thanks for your reply.
I would like to share my experience with you, of course. I learned the stuff the hard way with loosing a lot, I am still learning and it will never stop. I want to help you to avoid things that I paid for...:)
As I live in Germany my replies will come with delay, one day or so.... I mostly have time in the evenings or weekends as I am working.
I will prepare some things for you guys....
I also have lot of experience with DAX Options on the weeklies DAX.....I analyse the Open interest and know what the big players (banks) a doing on the option market. If you are interested I can show you some nice strategies with these options too.....
Ok... I prepare some things for you..
You hear from me soon..
Martin
|