ES Journal Archive (2009 - 2010)

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Quote from oraclewizard77:

I bought the SPY 108 put with this Fridays expiration. I like buying near expiration since the options have almost no time value, but just enough that if it turns into a bad trade, I can get out without too much damage.

If Tue is extremely bullish, I plan to add one more put at a higher price. Target is double the cost of the option.

Stop loss is price of put, but plan to get out before end of Friday.
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The week of expiration has the worst time decay of all. Buyers of OTM or ATM options at this point in time can easily get screwed unless price moves significantly your way.

My 2 cents.
 
Quote from oraclewizard77:

Seems a big stop and target for you. I can't imagine you are not going to either trade around this position or trade other futures before the stop or target is hit.
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I'm thinking of going back to the Crude while letting this damn thing ride. Or I might even look into trading the coffee or wheat futures. Have you seen wheat lately? Damn!
 
Quote from schizo:

I'm thinking of going back to the Crude while letting this damn thing ride. Or I might even look into trading the coffee or wheat futures. Have you seen wheat lately? Damn!
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Come back to crude! We can have a trading challenge, Schiz. Maybe that will get my ass to stay focused enough to take that 3rd re-entry, the one that seems to contain those 70-tick moves I lust for, but seem to miss every time. :p
 
I was expecting a doji on Friday to end this uptrend, I think we finally got it today in the form of a hammer. We might not go down to the lows of the beginning of this month, but a pullback to the SMA line (cash 1050) is way overdue...
 
Exactly, I am looking for a significant movement down. I don't want to do this in futures since I would need a wide stop. Also, I think its better to sell options when you have little time decay for example 1 - 3 months out, and buy options when the decay is almost used up.

So if market moves up strong on Tue, I plan to add to the position, if it moves down strongly, I plan to take profit. If it remains stuck in a trading range, I may just go and close out the position for a small loss.

Remember a strong move increases volatility, which is stronger than time decay unless we are talking about Friday afternoon where we run out of time.

Also, I expect time decay to increase Wed - Thur so I rather buy on Mon and look for movement to start happening soon and I don't plan to hold till expiration, that is just an emergency stop.

Quote from NoDoji:

The week of expiration has the worst time decay of all. Buyers of OTM or ATM options at this point in time can easily get screwed unless price moves significantly your way.

My 2 cents.
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Quote from Lawrence Chan:

'nuff said. :cool:
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When you say MM need a chance to clear inventories are you saying the are too long (holding to much I believe) from the recent selling?
 
Quote from oraclewizard77:

Exactly, I am looking for a significant movement down. I don't want to do this in futures since I would need a wide stop. Also, I think its better to sell options when you have little time decay for example 1 - 3 months out, and buy options when the decay is almost used up.

So if market moves up strong on Tue, I plan to add to the position, if it moves down strongly, I plan to take profit. If it remains stuck in a trading range, I may just go and close out the position for a small loss.

Remember a strong move increases volatility, which is stronger than time decay unless we are talking about Friday afternoon where we run out of time.

Also, I expect time decay to increase Wed - Thur so I rather buy on Mon and look for movement to start happening soon and I don't plan to hold till expiration, that is just an emergency stop.
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If you bought that put today, you paid minimum 1% for time. It also lost almost .30 of time just today. With only 4 trading days left and if we move up tomorrow or don't fall much the premium erosion will be high. I'm not saying you won't make money on it but it is very riskk bet with the open interest where it is.
 
Quote from inks2002:

When you say MM need a chance to clear inventories are you saying the are too long (holding to much I believe) from the recent selling?
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Yes, evidence in the tick data across the components.

Well, to be specific - it is the heaviest weighting stocks that got unload the most.
 
Quote from Pekelo:

I was expecting a doji on Friday to end this uptrend, I think we finally got it today in the form of a hammer. We might not go down to the lows of the beginning of this month, but a pullback to the SMA line (cash 1050) is way overdue...
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Last friday NQ did not finish its gap fill process yet.

Today and tomorrow should complete this important task.

=D
 
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