Call Out Your Potential Option Trade and Let's Discuss it

[jeffalvinson]

You shouldn't be looking for the next big thing in trading to trade ;
you should instead have a consistent, steady thing that you like to trade.

Larry,

I do have a steady consistent thing I trade daily.
I have traded (and still do) a mathematical based computer program signal generation for years and
I even posted some live trades on ET in 2008 (Purely Mechanical Option Trading) and 2012 (Purely Mechanical Option Trading Part 2).
Age, health and major surgeries for myself and my wife has caused frequent interruptions in my threads.

This current thread "isn't meant" to be a thread about high option volume events.
Its suppose to be a pleasant no pressure thread where option traders can share ideas and thoughts on any kind of potential option trades and we can all discuss them in a friendly manner.
For example, look at how many good thoughts and idea's the ET members have come up with about the unusual option volume event on LUV. That's excellent and its what I was hoping for.

Jeff

 

[Maverick74]

Down 40% so far. Off to a good start. Of course the call buyer is really short via the synthetic put and he is actually doing quite well. High oil prices - lower airlines - cheap vol.

 

[newwurldmn]

Of course the call buyer is really short via the synthetic put and he is actually doing quite well. High oil prices - lower airlines - cheap vol.

How do you know this?

There was no block print around then other than one for 18,000 shares and there was a block print for the Apr22 44.5 puts at the same time (crossed on the same exchange).

Further the opening trade on the Apr22 44.5 was opening (again another block print) with no stock associated with it on 4/8.

 

[OptionGuru]

Down 40% so far. Off to a good start. Of course the call buyer is really short via the synthetic put and he is actually doing quite well. High oil prices - lower airlines - cheap vol.

40% is nothing when it comes to options. One day down 40% next day up 40%.

Options = Volatility
Volatility = Wild Price Swings

 

[Maverick74]

How do you know this?

There was no block print around then other than one for 18,000 shares and there was a block print for the Apr22 44.5 puts at the same time (crossed on the same exchange).

Further the opening trade on the Apr22 44.5 was opening (again another block print) with no stock associated with it on 4/8.

I don't know. That is the point. Nobody does. And block prints can be posted after the close and if they are done internally, they don't have to post at all. It's just a "guess". Not something to build a trading strategy around and it's how Dr. J got annihilated trying to execute it. What did he call it, the heat sinker? Using deductive logic on the trade, the trader putting on the syn short given other mkt variables makes just as much sense as any other. In other words, it's a crap shoot.

 

[newwurldmn]

I don't know. That is the point. Nobody does. And block prints can be posted after the close and if they are done internally, they don't have to post at all. It's just a "guess". Not something to build a trading strategy around and it's how Dr. J got annihilated trying to execute it. What did he call it, the heat sinker? Using deductive logic on the trade, the trader putting on the syn short given other mkt variables makes just as much sense as any other. In other words, it's a crap shoot.

Okay. You made it sound like you knew.

FWIW, I don't think you can print options after the close and they have to cross before the corresponding stock can cross and the stock has to cross in a reasonable amount of time.

So you can often actually deduce what was trading. But you can't deduce what was on the books before, who the counterparty is, and what their motivation was. Eveno on very on big trades. A 10,000 lot is big to us, but is less than Steve Cohen's daily margin expense.

 

[OptionGuru]

RE: Call Out Your Potential Option Trade and Let's Discuss it.




Option Strategy

Buying 1-strike OTM weekly calls or puts the day after earnings in direction of a strong move. Example:

• Puts on AAPL today.
• Calls on FB tomorrow.

Trade Entered

Email confirmation of the trade I entered today:
2016-04-27 15:42:48 ET BOUGHT 1 PUT AAPL 2016APR29 97.00:US at $0.58 USD

With AAPL at $97.82 the put is actually 2-strikes OTM, but the strikes are only $.50 apart. The current bid/ask is $0.41/$0.44.

 

[FSU]

I want to short as many Dec 2018 SPX 100 puts for $0.20 as I can without getting margin called, because they're 100% guaranteed to expire worthless. Why would anyone ever buy them? You can't hedge against nuclear armageddon.

Ok will throw in my trade today. I bought 1,000 of these puts, SPX 2018 100 puts for .10 (by the way Scrooge, nice sale at .20)

I have been trading these far out cheap puts in the SPX for awhile. I can guarantee that some time before expiration you will be able to sell them for more than .10 Almost no risk here.

Scrooge, your biggest risk here in being short them is a bad mark. The market can easily go very wide on the close and you may lose a lot on a mark, which could cause problems. If I were you I would by them back for .10, take your profit and start again. You will have to wait 2.5 years to get that last .10, vs taking your first dime in only 2 days.

 

[OptionGuru]

Option Strategy

Buying 1-strike OTM weekly calls or puts the day after earnings in direction of a strong move. Example:

• Puts on AAPL today.
• Calls on FB tomorrow.

Trade Entered

Email confirmation of the trade I entered today:
2016-04-27 15:42:48 ET BOUGHT 1 PUT AAPL 2016APR29 97.00:US at $0.58 USD

With AAPL at $97.82 the put is actually 2-strikes OTM, but the strikes are only $.50 apart. The current bid/ask is $0.41/$0.44.

I placed a limit order to sell-to-close at $2.00 earlier on in the day and it got hit, email confirmation:
2016-04-28 15:13:35 ET SOLD 1 PUT AAPL 2016APR29 97.00:US at $2.00 USD


No position in FB.

 

[Maverick74]

---------------------------------------------------------------------------------------------
Let's keep track of this option's price activity until the large block of O.I. disappears.
Today 4/25/2016 data (the 1st day after the open volume event) on the LUV May 47.5C:
Prior Close: 1.04 / Open: 1.40 / High: 1.55 / Low: 1.10 / Today's Close: 1.12
Open Volume: 310 / Open Interest: 15,161

Jeff