Global Macro Trading Journal

Quote from ralph00:

Question for the options jockeys.

I'm still short a bunch of August 29.5 FCX puts. Even though the stock has just barely above a 0 chance of hitting that, the market-makers are trying to rape me by asking $0.05 to buy them back. Can I just let them expire at what I assume will be zero?
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yes.

If you wanted to free up the capital, you could put in a bid at 1 or 2 cents and hope for someone to sell to you at that price.
 
Thanks. No, I don't need to free up any cash at the moment.

It's a bit of a worry. I could get black swanned into oblivion if we get an 87 type crash between now and next Friday. I think I'm going to try to hold to expiration.
 
Quote from ralph00:
Question for the options jockeys.

I'm still short a bunch of August 29.5 FCX puts. Even though the stock has just barely above a 0 chance of hitting that, the market-makers are trying to rape me by asking $0.05 to buy them back. Can I just let them expire at what I assume will be zero?
More...
You have to decide whether you're happy to run this risk. Even if I believed that there's very little chance they could go to the strike, I might still buy them back. I have dicked for a tick enough in the past to know the real costs of it. The only (marginal) question is what the transaction costs are likely to be on the expiry.. In general, it's not a good idea to be short penny options, but it's also not right to pay through the nose for the privilege of being flat. It's a tough one, generally, and really depends on your tolerance.
 
Quote from ralph00:

Thanks. No, I don't need to free up any cash at the moment.

It's a bit of a worry. I could get black swanned into oblivion if we get an 87 type crash between now and next Friday. I think I'm going to try to hold to expiration.
More...

Not sure if this helps, but as a general rule, whenever I sell options I factor in a buy-to-cover at (5 cents + transaction costs) before the sell-to-open transaction.
 
I don't mind paying a tick, maybe even 2 ... but 5 is ridiculous. Even the bid right now is at $0.03. I'll going to bid a few at $0.02 and see if the get filled.
 
Quote from ralph00:

Thanks. No, I don't need to free up any cash at the moment.

It's a bit of a worry. I could get black swanned into oblivion if we get an 87 type crash between now and next Friday. I think I'm going to try to hold to expiration.
More...

Don't be a prick for a tick.
 
I'm not, but will be a prick for 5 ticks. Put it this way, would you pay $0.05 for a FCX 29.5 put that expires in 6 sessions, with FCX currently trading north of $45? $0.04? $0.03? ...


FWIW, Treasuires plummeting now after worst auction I think I've ever seen.
 
I can't link the article (its in Dutch) but European tourism into Swiss is down 10% year to date.

No idea on the significance of tourism or those numbers but I figured I'd just post them given how hot CHF is as a topic of discussion these days.
 
Quote from Daal:

Seems after effect of the downgrade by looking the at the indirects, equities didn't care though
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Could me a major asset allocation out of bonds into shares.
 
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