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My option trades
- Thread starter ryanpatrick
- Start date
Quote from ryanpatrick:
Yep, that's what I figured brought down MA and V. I believe V's price point has already included the potential operating expense. Now, as for the surprise, if V holds it steady in EPS and revs, along with everything else showing the same amount or less as MA, then traders should be more likely to jump in V shares. I'm looking for $124-$125 max, about 2-3% pop.
I also added 2 WFM May 19, 2012 $85/$90 call spreads at $1.55, At best I'm getting 3:1 risk/reward. I think WFM has found $80 level as support and any drop there should push shares back higher. There's support right at current levels with WFM's 50-day ma, and I think traders will use that as a buy if the numbers beat. Technically, everything is aligned with WFM shares. On the fundamental side, I'd like to see solid numbers with EPS around $0.61 or higher to show a 20% growth. Last year this time, WFM had a 10% surprise above estimates, so I think that's doable again given momentum. The options volume are also very even and that tells me those speculators don't really have a direction on WFM.
That's it, I'm all in from this point with $385.78 cash left. It would have been much easier start at the beginning of a quarter. Looks like I missed out on some big trades too, but I'll do what I can here up to mid June, and see if I can get something going.
Not in on V yet. I see a 2:1 reward/risk tho on WFM but I like it since vol isnt that spectacular...
It's a long way until expiration, and it's unlikely I will hold the position unchanged until then. The OTM fly is just a directional bet for now - it gives me good negative delta. For flys I think it's better further out because the value doesn't change much. If SPX drops, I could adjust the position by exiting, adding a call fly, or other trades. Put Calendars, being vega rich, are probably better, but I think flys are okay.Quote from ryanpatrick:
June options on SPX, looks like you've got a 1290-1310 target for SP500 by mid June? That sounds pretty bearish in that time frame. I'd at least see the SPX find some kind of support around 1350 first....there must be some bad econ news coming up within this time frame? I guess we'll see what happens on Friday first.
To be honest, this fly was also the easiest to accomplish since I already had a front spread position. Getting SPXPM spreads filled near mid hasn't been easy for me in general. It takes a while so I didn't want nor need the hassle this time. Maybe a higher strike fly would have been better, but at least even here theta for the fly isn't bad so I'm not bleeding much.
I just noticed GMCR is also reporting earnings tonight....it was one of my winners last Q, but probably not enough time to research and set up a trade here. Still, I'm going to do the research and see what I come up with.
Quote from ryanpatrick:
I just noticed GMCR is also reporting earnings tonight....it was one of my winners last Q, but probably not enough time to research and set up a trade here. Still, I'm going to do the research and see what I come up with.
LOL Remember FF ? He seems to have vanished but remember how he sold puts? LOL!!!
EDIT:
Sweet GANESH and SWEET JESUS!!!
260% vol!!! But I think most of the movement's factored in.. I'm not sure it'll move $8 today...
But you never know, the rabbit hole might be deeper
Hmmm, interesting, I see options heavy on calls, short interest is huge at 3rd highest reported by Nasdaq in past 12 months. numbers should stay solid. Avgs 20% swing minimum. Someone going with 1 direction could take the 52.5 at 2.56 with a 7.44 return potential for a 3:1 risk. I'm just going on the fact that if GMCR does rally, then it will surely hit 20% gain with price point at $60-$61.
I think I'm going to take the lower risk route on this trade. I'm still going to put a position in play, but won't do it till tomorrow morning. From the open, and depending on the earning report, I'll play it with a 3-4% potential move in the same direction as the open and make a small 20-30% return on the options. There's just too much risk right now and I'm already in WFM and V. Good luck to everyone else though who dares take a position.
I think I'm going to take the lower risk route on this trade. I'm still going to put a position in play, but won't do it till tomorrow morning. From the open, and depending on the earning report, I'll play it with a 3-4% potential move in the same direction as the open and make a small 20-30% return on the options. There's just too much risk right now and I'm already in WFM and V. Good luck to everyone else though who dares take a position.
Quote from babutime:
LOL Remember FF ? He seems to have vanished but remember how he sold puts? LOL!!!
EDIT:
Sweet GANESH and SWEET JESUS!!!
260% vol!!! But I think most of the movement's factored in.. I'm not sure it'll move $8 today...
But you never know, the rabbit hole might be deeper
GMCR has averaged 20% swings, with the wild card -41% drop....there's no guarantee, but the odds are for another 20% move. No one should be playing this straight calls or puts, has to be spreads of some sort, or butterflies, maybe even condors.
Quote from babutime:
LOL Remember FF ? He seems to have vanished but remember how he sold puts? LOL!!!
EDIT:
Sweet GANESH and SWEET JESUS!!!
260% vol!!! But I think most of the movement's factored in.. I'm not sure it'll move $8 today...
But you never know, the rabbit hole might be deeper
The annualized vol-figure is really meaningless. Add another quarter to the straddle and you're nearing 300-vol.
May18 vols will drop more than 3000bp; more like 3800bp.
The long backspread is a no go. I would go long the 45/52/60 fly from 1.80 mid in May18. Do not trade any weekly flies, as the wings will implode after the number. The fly debit is at great risk to May04.
The May18 45/52/60 fly is decent. Good to 56 up, 45 down. I will do a ten-lot to maintain interest in the report.
Edit: Did 10 at 1.85 risk (short gamma).