CL Redux

@riskaddict This LOW Volatility environment for OIL is new me, It needs a quite an adjustment for one's Trading style ( at least for me ).
For me this is first time I am facing this Low VOLatile env in OIL Trading in years.

It seems you had lots of experience with Volatility as you trade many Option combinations .
I appreciate if you can share your thoughts, Have you experienced this kind of LOW Volatality in OIL in the past? If so How long it lasted ( months etc.. )

Here are my observations:
--------------------------------
1/ Lately OIL is trading 100 tick ATR range and AT the Money PUT/CALL Options with 30 Day expiry are trading around $1.75 , this is very cheap Option prices. As recent as 2 months ago these AT the money 30 Day expiry options are traded around $3.00
<b>- The implication of those LOW Price CALL/PUTs means , $3 intra day JUMPs in OIL is hisotry, we should get used to 100 - 125 tick intra Day Range. This is my understanding, Please share your thoughts if you think Otherwise .</b>

2/ In this Low volatility environment , I am experiencing Position/Swing trades fare better than Day Trades. You do not have to worry about 20 to 30 Tick STOPs to realize similar gains on the upside .
3/ Holding PUT/CALL Options overNight is one of the main themes of these trades and take FUTURE contract CONTRACT LONG/SHORT positions with the Previously bought ' LOW Priced PUT/CALLs' as Protection.


Quote from riskaddict:

I unwound the jan short portion of my spread through out today with volatility in the shitter once again.
More...
 
Quote from InvestVision:

@riskaddict This LOW Volatility environment for OIL is new me, It needs a quite an adjustment for one's Trading style ( at least for me ).
For me this is first time I am facing this Low VOLatile env in OIL Trading in years.

It seems you had lots of experience with Volatility as you trade many Option combinations .
I appreciate if you can share your thoughts, Have you experienced this kind of LOW Volatality in OIL in the past? If so How long it lasted ( months etc.. )

Here are my observations:
--------------------------------
1/ Lately OIL is trading 100 tick ATR range and AT the Money PUT/CALL Options with 30 Day expiry are trading around $1.75 , this is very cheap Option prices. As recent as 2 months ago these AT the money 30 Day expiry options are traded around $3.00
<b>- The implication of those LOW Price CALL/PUTs means , $3 intra day JUMPs in OIL is hisotry, we should get used to 100 - 125 tick intra Day Range. This is my understanding, Please share your thoughts if you think Otherwise .</b>

2/ In this Low volatility environment , I am experiencing Position/Swing trades fare better than Day Trades. You do not have to worry about 20 to 30 Tick STOPs to realize similar gains on the upside .
3/ Holding PUT/CALL Options overNight is one of the main themes of these trades and take FUTURE contract CONTRACT LONG/SHORT positions with the Previously bought ' LOW Priced PUT/CALLs' as Protection.
More...

All great points! This is a lot like the 1st couple of months this year. And even though there is a lack of premium built into prices I sell directionally skewed strangles and try to make my direction match the directional move that will cause a spike in IV so I'm losing out with IV going up but the directionality of the trade out weighs that loss to certain point and when it reaches that point I unwind or adjust and obviously the longer it takes to play out the better. Depending on where we are in the month I'll use massive amounts of capital to make these calendar spreads just to collect some theta.

This environment has forced me into taking directional trades which I don't like doing but have been doing pretty well at it because of such well defined areas (probably because of the lack of volatility). And like you said I've found myself being and outright buyer of options which makes me cringe but you can't pass up the R:R opportunities.

Wow discussing options in word or on a message board seems cumbersome. What I see in my head in 30 seconds seems to take 1000 words to explain.

You know where we need to go for premiums to get built up a bit :eek:
 

Attachments

Quote from NoDoji:

That is one ugly chart! Looks like it's gonna crash right through the channel. I imagine that makes it all the more powerful a buy signal :p :p
More...

You were right old mo couldn't be contained. The old me would have said ahh it's just a momentum overshoot buy more! The new me says lets get out and wait and see if it gets back in the channel.
 
there was a fantastic trade, i had it lined up but couldn't put the order in, limit order to sell at 9550 with a 10 tick stop, anyone do it? Was a good 2b.
 
Quote from Visaria:

there was a fantastic trade, i had it lined up but couldn't put the order in, limit order to sell at 9550 with a 10 tick stop, anyone do it? Was a good 2b.
More...

I had a limit to sell .55 (wide range fade play) and chickened out at the last minute, worried that it might take out the 20-day MA. My head's a bit sore from pounding it against my desk :p
 
You must log in or register to reply here.
Back
Top