My option trades

Why within a year, he will be able to move to Belize and follow the sun, with all that money. What kind of yacht do you want Ryan?
Depending on how much baggage you had, could probably find room for one guy.
 
the question that probably needs to be answered is how does the method perform in a bear market when earnings expectations are slashed across the board?


Would be great if a study could be performed ahead of the inevitable bear market..
 
Quote from ryanpatrick:

LOL, sorry I had to laugh, because that was my exact point sometime ago too....The question was whether price movement is already priced into the options. From a theoritical point of view, I would have thought so. BUT, from the reality of the trades and experience, I can tell you that only part of the price movement is priced in, especially when the options are due to expired within the week. Time and time again, I've learned that the price was not priced into the options. Which is why I mentioned yesterday about WTW. The only thing that even kept WTW afloat or at -2 to -3 point move instead of -10 points was that share buy back program they announced.

Track those numbers and let me know if market makers have really priced in the total risk of the move on these earning trades. I'd say I would not have made consistent profits if the options priced in the expected swing on these earning trades.
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You're giving MMers too much credit. I didn't watch the tape AH, but maybe you can save me the trouble and tell me where it opened after the release? Was the buy-back announced with the numbers or in the CC?

*Obviously the vol wasn't mis-priced as the strangle range encompassed the move in the AH session. 67-84 you stated? That's 17 handles and the strangle range covered >18 points. You were flat to 80, but ATM would've been the 75/80 combo, which would've covered the entire move.*

The combo was overpriced on vol, fair on variance. If you had the ability to hedge you would increase your hit-rate.

If the stock printed under 70 then you would have had a chance to recover a portion of that debit with shares. I am not criticizing the method, only the bet-sizing. I think you'll be able to make a go of this as long as you can hedge AH. Your ROC will suffer due to the haircut required, but it's the only way it can scale.

FWIW, I sold the 75/80 strangle (one lot) simply out of good natured competition.
 
Quote from falconview:

I have to laugh, when Atticus tell Ryan he is going to blow out. Atticus is a successful scientific trader. Lots of esoteric traditional studies, and plays successfully a time consuming trading game.

Still in looking at my own account so far, from Jan 1st in 6 weeks, my account is up 6% in total. Small as it is.

While Ryan is up 150% thereabouts in the same time period.

THAT SHOULD TELL YOU SOMETHING?

I look at Ryan as a handicap gambler with experience and an edge at the race track. I´m not sure anybody else can substitute for that edge?
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wow you have no fu^&in idea what you are talking about, this is one of THE dumbest statements I have ever seen on this board, I will let you figure out why.....:mad:
 
Quote from HurricaneUS:

those numbers are the proverbial "holy grail" which all professional traders strive for. If you can keep it up then all you will need to do is scale this thing....
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I don't know if this will work on a larger account....I know so far that it can work on small accounts, but large accounts could be a different situation.
 
BIDU - Earnings today after market closes, I think about 8pm EST. Chart says buy Calls.

BIDU Feb 2012 150 call @ $1.70



Screenshot.png
 
Okay, I'm going to give the straddle a try here.....ROVI is in no man's land here at $34.50, 35 straddle with 1 day left gives me a risk of 3.40. I'm leaning to the downside with the odds of ROVI dropping back to $28-$30 area. Last 4 quarter says ROVI averages about 12% swing at -6, +22, -9, -39. I left -39 out as the odds of that happening again may be quarters away. My guess is it drops to $31.20, about a 9% drop from 34.50 and 3.80 return on 3.4 investment. I'm not looking for big return, and I'm not going all in, just 1 contract to test the straddle play and see how it pans out. If it works out to my price point, then I'm up $20 after comm., the key is that this gives me experience on the straddle in such a situation. Going to set it up now.
 
My computer program spit this out today, so
I just placed a complex order for the SPY 133 Puts (exp. Mar 16)
Buy Limit: 1.57
Sell Limit: 2.46
Stop........ 1.41

Reward to Risk: (5.56 to 1) ($89 Profit vs -$16 Loss)

I hate buying puts on expiration week because long term statistics
show that the markets finish positive on exp wk the majority of time
(even in bear markets), but I simply cannot pass up that R/R ratio.

From technical standpoint (see attached 2 day SPY chart), the SPY
will have to continue to rally to R2 (blue line on chart) to get filled on the buy order (1.57) and then tank in the next few days to 134.25 to get sold on the sell limit order (2.46).
 

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