Search results

To play devil's advocate, I will take the other side. VIX is now at the historical norm. It is be flat or lower until the end of the first quarter. Good results and guidance will keep it there. Then, when second quarter results come out, there will be disappointment (because of higher...

I have a couple of rules for these, since I do use bear put spreads. On the day before or the day of expiration, I exit in the following manner: 1) If the long put is OTM, I exit it and let the short leg expire, margin permitting. At least I get some money back; my commissions are low enough...

Too many of you are looking at options in a vacuum. Looking at the tape, one has no idea who is on the other side of the trade nor why. Cracks me up when I read that there is an usual amount of call volume on such and such a stock. Doesn't really mean a thing--there is always someone else on...

If you are truly bullish on gold, then go long the ETF or gold futures. Now, to hedge, go long the dollar (short the euro) using the ETF or currency futures. Set it up as a neutral position or set it up so that you are rewarded for a bigger gold move upward than a dollar move downward...

Depends on the selected strategy. Question really is: what are my monthly profit goals? 4-5K is my goal. One cannot use the same strategy every month, for market conditions change. I have found that the key is strategy selection followed by position and money managment.

Some really good points here. I actually placed a trade on the last trading day before quarterly expiration. This was September, 2009. The last trading day was Thursday, the day before the third Friday. At the close, the Sep Futures was between 2 strikes (strikes have 5 point intervals. The...

FWIW, I make my living trading futures options on the S&P 500 emini. I have been doing this for over 5 years. I do not work any other outside job. For me, wealth is meeting my monthly expenses and having something left over to spend on fun things and to keep as a reserve in case of losses...

I seem to recall Augen's article, especially the part about pinning. I believe he mentions that pinning occurs in the AM, for that is when the market makers and other large traders are exiting the open positions. they exit and move on, for wasting the PM session holding on the "penny" options...

I erred in the math, sorry

Just some thoughts. First, your stock has made a 50% move upward. Yet you have made only 15%, which at this point is better than nothing. You would have made more at this point just buying the stock and setting a trailing stop. Based on your figures, you paid $432,000.00 for your initial...

I believe the theory here is to take avantage of gamma by going long gamma. This is the week where gamma's influence actually outweighs theta's influence. I see a couple ways to play it. My favorite is to look for companies announcing earnings during expiration week. Generally, a quick pop...

This is an interesting thread for an option forum. Made me remember my first investment. In 1981, I bought my first bond fund. At the time (I am sure all of the oldsters remember the inflation of the late seventies), interest rates were in the high teens. So, I poured my student loan money...

Suppose you are a silver miner. You would always love prices to rise. But a good CFO will always hedge to protect against declining prices. If prices rise, the silver miner still makes a decent profit, for the spot price increase usually exceeds the futures price. If prices drop, then the...

And many will wait until the underlying hits their price target and then buy the put (at least 90 days our from expiration) at the strike nearest the price target. Heck, you can use options to get into a stock you like at the price you like as well. Suppose XYZ is trading at 50, but I like it...

The biggest difference between buying the put vs shorting the stock is volatility and time. The stock has no implied volatility, and it doesn't expire. Let's suppose you have a stock at 50, and the cost of the 50 put on that stock is 1. Let's say the stock drops to 48. At that point, your...

Remember, for every buyer there is a seller and vice versa. Look at it this way. Suppose there were 20,000 put transactions and 10,000 call transactions. The put to call ratio is 2. This is volume, not open interest, for transactions occur every day.

Glad you found a way to manage your trade. Always remember that the premium received gives you some leeway. In reality. it gives you less breathing room that you think. I am sure you noticed that you had to pay back some time value as well as intrinsic value.

If you have a short option that expires out of the money, nothing happens. If you have an in-the-money option position expiring, you will be assigned a short position (if a short call) or a long position (if a short put) at the strike price of the short option. You get to keep the premium...

Multiplier is 50. If buying one JUN 2010 with a strike of 1115 @64.50, the cost of one put is equal to $3225.00