Recent content by GregLoehr

I understand the desire for the home run trade. But looking at the Aug 75 puts as an example, trading for around $4 on the day before the release. These options lose about $3.85 to the vol crush, and need about $7 of stock movement to overcome that loss and THEN begin to profit. So if...

Who said anything about a free lunch? And who really thinks they're going to get that 'unlimited reward"? As far as I know, no stock has gone to infinity yet. My point is that if you're going to use the options, through earnings and an obvious vol crush, why go with a strategy that sets...

Even at $2.80, which didn't fill, this trade absolutely got hammered.

Either way, long options are going to get killed from the vol crush. Need a gigantic move for them to work out. If you're going to trade directionally into earnings, why not buy a vertical instead of straight option?

LOL

Well, it didn't materialize, but I meant to buy to close the Aug1 37 put, and sell to open the Aug2 36.50 put. If that trade could have been filled at a 40-cent credit, then the remaining position would be a long Aug2 37-36.50 put spread. I believe the entry price for the calendar was $0.40...

Optionatrix, Calendar is looking nice. With a little bit of time and a small move down, you can probably roll the short option out/down to the 36.50 strike for 40-cent credit or more and have a risk free 37/36.50 vertical. Just an idea.

Looking at unusual volume can be ONE thing to look at, but it's certainly not definitive by any means. The reason, is that you may not know whether the trade is opening or closing (unless it's clear from the open interest change), and you also probably don't know if the options are traded...

Of course the greeks are going to change. That's just the nature of options. Here's how to tell when it's time to adjust the calls for example: take a look at rolling the short call spread out one expiration and up one strike ($2.5). It's trading for a credit. This is ONE adjustment...

Jumping from a calendar to a strangle (or similar trade) based on a feeling? No offense, but doesn't sound like a logical approach unless there's been something concrete to change your mind.

I kind of like it. Big reward potential so warrants the smaller amount at risk. I think Bernanke is a master at managing the market's expectation, so if today ends quietly, maybe it starts to profit. If my math is correct, looks like about a $1.50 range on either side of $37 for breakeven...

Which expirations?

Since you were assigned the short option, that means you bought the call calendar. This leaves you with a short stock position against the Aug call. There's no risk from the position itself regardless of what the stock does because the long call protects the short stock position. The...

With options you really need to have a time frame in mind for how long you want to give the stock to do what you think it's going to do. For example, you say you're going to give AMZN one month, and during that time frame you think the stock can drop 10%. From there you decide on an...

Some broker platforms have the ability to do this as well.