How do you understand this options trade?

[Farbert]

Check out the pic below. I posted the question on the pic.

It's from TOS time and sales the trade was between the bid/ask. I made an attempt to understand it but could be completely wrong.

Let me know how you interpret this trade.

Thanks

 

[beerntrading]

That's a debit spread. Bought the 2c, sold the 3c and paid .40. And probably could have taken just the 2c at .40 if patient with an iceberg.

Also, what's the platform?...I like the scanner.

 

[stepandfetchit]

As he indicated, the "platform" is TOS (ThinkorSwim) by TD Ameritrade.

Note that the legs of the spreads, may not be grouped together, but the Qty column is generally adequate to "reconstruct" the spread.

Below is pic of one of my trades yesterday from the "OptionTime&Sales" as reference.

 

[Farbert]

ok thanks. The platform is Think or swim.

What makes you believe he sold the 3c? (IE, why not bought the 3c and sold the 2c?)

Can you provide a little feedback on why that is the most likely scenario?

 

[Farbert]

As he indicated, the "platform" is TOS (ThinkorSwim) by TD Ameritrade.

Note that the legs of the spreads, may not be grouped together, but the Qty column is generally adequate to "reconstruct" the spread.

Below is pic of one of my trades yesterday from the "OptionTime&Sales" as reference.

View attachment 190629

Thanks. Did you buy the 2790 put and sell the 2650 put and additionally buy the 2760p and sell the 2680p ?

 

[JSOP]

Check out the pic below. I posted the question on the pic.

It's from TOS time and sales the trade was between the bid/ask. I made an attempt to understand it but could be completely wrong.

Let me know how you interpret this trade.

Thanks


View attachment 190622

Well with no indication of which one was bought and which one was sold, it could be either way, a debit or credit spread. All we know is a $3 call for $0.03 and a $2 call for $0.43 were transacted together as a spread combo. If it's a credit spread, he's betting the underlying is going down with hedging. If it's a debit spread, he's betting the underlying is going up with some offset to the commissions. If it's a debit spread, I agree with @beerntrading, he could've waited until the price goes down a bit and buy instead of paying such a high premium on the $2 call.

 

[beerntrading]

What makes you believe he sold the 3c? (IE, why not bought the 3c and sold the 2c?)

Just where they orders fell relative to the bid ask (though, I'm not sure of that...penny options can get a little dicey in this because the premium less parity is smaller than the spread).

I could tell you with certainty if I had the time on the chart. Edit: oh, never mind...those are daily candles.

 

[beerntrading]

Well with no indication of which one was bought and which one was sold, it could be either way, a debit or credit spread. All we know is a $3 call for $0.03 and a $2 call for $0.43 were transacted together as a spread combo. But either way, this is NOT betting that the underlying would go up; it's betting that the underlying would go down with hedging. Which security is this?

There you go, crosshair is on the buy candle. 13k volume (against 9.8k delta) and a top tick. It's a buy.

 

[stepandfetchit]

Thanks. Did you buy the 2790 put and sell the 2650 put and additionally buy the 2760p and sell the 2680p ?

No: My trade was the sale of a Condor: Shorts: 2790 & 2650, Longs: 2760 & 2680, for a 1.90 credit/lot

 

[JSOP]

View attachment 190631

There you go, crosshair is on the buy candle. 13k volume (against 9.8k delta) and a top tick. It's a buy.

I still feel it's a credit spread given where the price fell in between the spread. Right now the underlying is at 2.4400 but when the spread was filled, the underlying was higher at 2.4401 so he could've had the sell leg of the $2 call at the high end of the ask at 0.43 when the bid/ask was at 0.10/0.45 and bought the $3 call at 0.03 when there was no buyer at the bid and he was the only bid at the time.