Expiration Friday trading

TradeCat said:
Hopefully you bought options a couple of months out because I made the exact deduction as you did. SPY will likely be around 205.50 - 206 by the end of next week.
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I am not over exposed at the moment - but have shorted the NQ with bout $2k risk level.

Currently transitioning from a few days holding to no holding overnight - all daytrades on NQ and ES.

Also long 200 VXX - more long term trade.

This OI analysis is not straight forward for us with access to limited info, as those with deep pockets have the best of the best.

Last night I came across a very interesting software service that links to most of the big brokers, and it is very affordable for the average daytrader or investor - will not say too much bout it yet, only that is volume related, and very interesting indeed.

As some here say, no sense in telling everyone everything, just for the sake of talking!

I will, however, discuss serious things with serious people, in relation to making money, as that is all that matters in this game.

J_S
 
Though Friday trades on expiring contracts is good, I have lost money and am starting to reevaluate. Neither swing nor intra day have been consistently profitable for me so I'm starting to explore ways of finding a middle ground.
 
I also did it yesterday on AAPL.

I bought 50 of the $96 puts for .14 when AAPL was @ 96.15..... sold em at .21 when it was $94.85. $253 profit after commissions.
It was pretty obvious $96 was the number for the close. I went with the puts when it was north of $96 vs the calls when it was south of $96, because (IMO) aapl is due to come down. I actually expected it to keep going down, but when I saw a few upticks, I took the profit. It would have been nice if the pig went down to $95. That would have been $5000.

You can do this during the week too, its just you have to buy farther into the money strikes if you want as little time decay as possible. My batting average on these "beer money" scalps is about 75%. But I have to sit here and hawk the monitor all day and wait for my chance to pounce with confidence.
 
Interesting trade! This is why I'm a big proponent of scalp trading. Opportunities like these happen quite a few times a day on the major equities. Many small bites wins!

I get what you're saying about DITM. I would like to go a 1 delta but liquidity is greatest near the money. Other problem is that I'm most efficient when I'm not staring at a screen for 7 hours a day. Though with successful scalp trading, waiting for the right signals for the right set up is very key. Entry is key.

Word of caution for those who've never traded expiring options on Friday. After about 11AM liquidity starts to drop significantly and the price starts to drop quick. If you trade, you need to enter and exit quick.
 
Cat... I know a lot of people on these boards BS a lot. I'm new to ET so I thought I'd post documentation of this in the thread. This method works pretty well. The only thing that'll F it up.... its easy to get greedy. Always always take the quick scalp. Used to be a big bugaboo for me, but I learned. No more. Thats I can maintain a good batting average. Not getting rich, but having just as much fun!

Thanks for the like too. ;)
aapl.jpg
 
vanzandt said:
Cat... I know a lot of people on these boards BS a lot. I'm new to ET so I thought I'd post documentation of this in the thread. This method works pretty well. The only thing that'll F it up.... its easy to get greedy. Always always take the quick scalp. Used to be a big bugaboo for me, but I learned. No more. Thats I can maintain a good batting average. Not getting rich, but having just as much fun!

Thanks for the like too. ;)View attachment 165082
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May I ask where you trade and what was your commission on the trade?
 
1245 said:
May I ask where you trade and what was your commission on the trade?
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Commissions on this were about $46 each way. All the big brokers are competitive, although Fidelity is about $2 cheaper on the basic trade. Its the CBOE fee's (.75/contract) that get ya.
 
J_Smith said:
However, having asked a few questions on this site, in various threads, no one has answered my questions in relation to SPX OI - which I believe is one of the keys to understanding what the MM's are doing and where they will likely finish the week for options expiry.
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Forget OI and focus on the premium for the ATM straddle. The market doesn't reward dumb money and will make sellers and buyers earn their money.


Example:
  • SPY at 209.99.
  • SPY July 08, 2016 210.00 Call (bid $0.71 ask $0.76).
  • SPY July 08, 2016 210.00 Put (bid $0.90 ask $0.91).
  • A strangle buyer will pay $1.67 and needs the SPY to finish above $211.67 or below $208.33 to make a profit.
  • A strangle seller will collect $1.61 and needs the SPY to finish in between $211.61 and $208.39 to make a profit.
The above quotes show that the SPY will trade in a price range of about $211.61 to $208.39 until expiration, and on expiration finish at about $211.61 OR $208.39. Both traders will break even unless the market moves beyond what the option premiums indicate - in that case one of the traders will profit.


Long story short - This Friday the SPY will close at $211.61 OR $208.39, give or take a dime.




:)
 
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