Directional Option trades

[newwurldmn]

It's not spreads that are the problem. It's the other risks that will drive your pnl. On penny options theta and vega become more meaningful.

It won't cause you to necessarily lose money. but it could be the different between postive expectancy and negative.

 

[atticus]

Quote from FCXoptions:

With $4500 today, I had the leverage of 10,000 shares or approx $315,000 worth of the stock at market value. I don't have near that in my account. I was able to make a $900 return off the $4500, and it took a 20 cent down move in the stock.

You are correct in that if I had the cash to buy the stock position instead of the equivalent amount of options I would have been able to make a larger profit around the $2000 mark though, but I don't have that kind of money to trade with. I am only 21 for Pete's sake! haha

What was the position? You made 20% intraday on $0.20 in what issue? I can't account for a 20% return on debit on a $0.20 move in anything, so I am curious.

You're only 21yo and have a wife and kids?

 

[FCXoptions]

Quote from atticus:

What was the position? You made 20% intraday on $0.20 in what issue? I can't account for a 20% return on debit on a $0.20 move in anything, so I am curious.

You're only 21yo and have a wife and kids?

Hey Atticus,

I bought 100 contracts of the $31.50 weekly put on FCX for .45
I sold 11 contracts at .53, it was a partial fill.
I cancelled that order so the market makers wouldn't screw with it just picking off a couple contracts here and there and waited for a few minutes and sold the remaining 89 contracts for 55 cents once the bid size was large enough.

That was $978 before costs, I use Optionshouse and the total costs for all three orders was right at $56 so I cleared about $922.


Regarding the family, I will be 21 in May and yes I am married with a 1 year old son. One of the few guys to have a baby while young and stick around! I work a full time job, go to college at night about to begin my third year into my Finance degree, and then stay up late at night and any downtime at work try to learn about the markets.

 

[atticus]

...

 

[FCXoptions]

My numbers could have been slightly off, that was an estimate on the movement I didn't actually check. I will attach a snapshot of the orders and exact fill times if you want to check the chart, the chart I can see at work only goes in 15 minute increments for anything prior to today so I can't see exactly.

 

[atticus]

Quote from FCXoptions:

My numbers could have been slightly off, that was an estimate on the movement I didn't actually check. I will attach a snapshot of the orders and exact fill times if you want to check the chart, the chart I can see at work only goes in 15 minute increments for anything prior to today so I can't see exactly.

I'm not calling you out, just that it was unlikely it was only 20 cents.

 

[FCXoptions]

Quote from atticus:

I'm not calling you out, just that it was unlikely it was only 20 cents.

No problem. I sold at the perfect price on those puts, price reversed almost immediately after selling, I got very lucky on the exit. From what I could guesstimate based on the 15 min chart it might have been closer to a 30 cent move so you are probably correct in that it was more than 20. It had a delta of around 50 at the time I believe though so it could have potentially moved 10 cents off a 20 cent move in the underlying.


If somebody can check, post it on here so we can see. I am curious as well.

 

[PorkBellies]

Quote from FCXoptions:


Regarding the family, I will be 21 in May and yes I am married with a 1 year old son. One of the few guys to have a baby while young and stick around! I work a full time job, go to college at night about to begin my third year into my Finance degree, and then stay up late at night and any downtime at work try to learn about the markets.

i know many people who roughed it out like that in their early years

some solid characters, and decent human beings came out of it


just don't bet the farm when you have a 1 year old

 

[FCXoptions]

Quote from PorkBellies:

i know many people who roughed it out like that in their early years

some solid characters, and decent human beings came out of it


just don't bet the farm when you have a 1 year old

Yea you are most definitely right, I have been setting aside money for him starting right after he was born. I am now debating on looking into finding a different job, I have a good secure job where I am at currently. But the pay isn't great for being the only one in the household working at the moment and considering how much I have helped the companies bottom line. BUT on the plus side, my boss is ok with me making the occasional trade or two during the day as long as I get all my work done (he thinks trading is amazing and has no clue how it works but is very impressed with it lol). So there are definitely some perks to it.

 

[atticus]

Quote from FCXoptions:

No problem. I sold at the perfect price on those puts, price reversed almost immediately after selling, I got very lucky on the exit. From what I could guesstimate based on the 15 min chart it might have been closer to a 30 cent move so you are probably correct in that it was more than 20. It had a delta of around 50 at the time I believe though so it could have potentially moved 10 cents off a 20 cent move in the underlying.


If somebody can check, post it on here so we can see. I am curious as well.

The initial deltas were more like 35. A delta of 50 implies that the stock was pinned to the strike at entry.