My option trades

Quote from falconview:

newworldmm

Whew! That comment was over my head. I sort of could refer to what you said, but the relationships escaped me, as also the time frame.

Here is one I am puzzling over. Help me out somebody?

If I buy a CALL and sell a PUT, what kind of spread do I have?
More...

A risk reversal if they are different strikes, a combo or synthetic if they are the same strikes (similar to a forward with some early exercise issues)

Was just saying that to lambast ryan for using a 3 day option to express one delta view and then to cut it and then use a different option to express the opposite delta view is dumb.

If he had done it with stock (shorted AAPL, covered and then went long) it would be okay in nine ender's eyes. The only difference with ryan's trades were the gamma/theta which was a good idea as the implied vol was 34ish and the stock had realized 38 vol in straight line up. It's likely a big move would have happend again.
 
Quote from babutime:

I let my deltas go batshit crazy on AAPL.

Mind you I do have a smaller account like Ryan so I can't hedge that often so Im very very picky with my credits and debit trades...
More...

I believe that even with a larger account, daily hedging is tough unless you have really favorable portfolio margining. The pnl volatilty that you give up with delta hedging and the balance sheet that you end up using to fund the stock position require you to have much higher hurdle rates to get attractive rates of return. If you get favorable correlation treatments and if you have a favorable margin rate, it becomes easier.
Especially now that most single stocks are priced pretty efficiently.
 
Sold to open AAPL mar 580 put at 12.60, setting up that spread of 585/580 put to $1.40. $140 risk for $500 gross return. I think that should work out positive for me. I did this so I can set up an April put position in AAPL shares. Should work here. Sorry forex, just can't seem to follow the Qs like you do. I'm going to go for the kill on this trade. Not much earnings to really look at and it's just an awkward situation right now with most of these earnings still overbought. Hard to see 10% pop on overbought stocks.
 
Quote from ryanpatrick:

Alright, can't stay 100% cash for long, added 2 CREE Apr 30 call at 2.34. Small risk here, earnings are in April and I hope it occurs before expiration too. Just can't sit and watch it as it bounces of the lower end of its uptrend channel anymore.
More...

NOW I know who bought those two calls I sold!:p I have 200 shs of CREE I'd like to get rid of at 32 in April and had a GTC order to sell (the 30's)at 2.05...I guess the MM pocketed the .29....that must be why THEY have all the bucks. GL to both of us....
 
newwurldmn or something :D

You are a bit over my head still, but I understand you better than my friend ATTICUS. His stuff is some kind of Chinese dialect. :)

Risk Reversal seems right.

Okay, let me see if I can clarify that in my mind.

If you bet on an earnings move, your odds are 50 -50.

If you are right you win.

If you guess the wrong direction you are losing. HOWEVER,
if you sold the PUT as it Gapped in the first ten minutes of play, you would get the volatility, or premium inflating balloon. What I was thinking, was that your ODDS of deflating the premium were 3 to 1 in your favor. ( very limited experiment yesterday on six options )

Presuming you forgot about your CALL that went sour. Just let it expire, then you could MAYBE use that CALL as justification with a small account, to SELL the PUTS in some kind of weird credit spread, which would limit your margin requirment? Not sure about this, as it is not a real credit spread. But my guess is; it is security for margin, if in a small retail account, you want to SELL the PUTS, which have ballooned and you are taking another 50-50 chance at odds of 3 to 1 in your favor that the PUT premium will deflate. You would be permitted to SELL.

I´ll maybe try this next week on paper. I was just curious if that losing CALL could be used to SELL the PUT? Like a reverse risk credit spread ??? I´m not too much up on the correct jargon here.

I believe RYAN has been experimenting with this, he might chip in and comment on real life results? Please Ryan? He talked a lot about some kind of spreads he was doing, but I dont´know a heck of a lot about spreads, other than they don´t work well. Not as good as direct buying.
 
Ryan

"Sold to open AAPL mar 580 put at 12.60, setting up that spread of 585/580 put to $1.40. $140 risk for $500 gross return. I think that should work out positive for me. I did this so I can set up an April put position in AAPL shares. Should work here. Sorry forex, just can't seem to follow the Qs like you do. I'm going to go for the kill on this trade. Not much earnings to really look at and it's just an awkward situation right now with most of these earnings still overbought. Hard to see 10% pop on overbought stocks."

I´m not quite following this. What kind of spread here are you describing? 585/580 PUT ?
 
Quote from falconview:

newwurldmn or something :D

You are a bit over my head still, but I understand you better than my friend ATTICUS. His stuff is some kind of Chinese dialect. :)

Risk Reversal seems right.

Okay, let me see if I can clarify that in my mind.

If you bet on an earnings move, your odds are 50 -50.

If you are right you win.

If you guess the wrong direction you are losing. HOWEVER,
if you sold the PUT as it Gapped in the first ten minutes of play, you would get the volatility, or premium inflating balloon. What I was thinking, was that your ODDS of deflating the premium were 3 to 1 in your favor. ( very limited experiment yesterday on six options )

Presuming you forgot about your CALL that went sour. Just let it expire, then you could MAYBE use that CALL as justification with a small account, to SELL the PUTS in some kind of weird credit spread, which would limit your margin requirment? Not sure about this, as it is not a real credit spread. But my guess is; it is security for margin, if in a small retail account, you want to SELL the PUTS, which have ballooned and you are taking another 50-50 chance at odds of 3 to 1 in your favor that the PUT premium will deflate. You would be permitted to SELL.

I´ll maybe try this next week on paper. I was just curious if that losing CALL could be used to SELL the PUT? Like a reverse risk credit spread ??? I´m not too much up on the correct jargon here.

I believe RYAN has been experimenting with this, he might chip in and comment on real life results? Please Ryan? He talked a lot about some kind of spreads he was doing, but I dont´know a heck of a lot about spreads, other than they don´t work well. Not as good as direct buying.
More...

I don't follow what you are trying to do here...

but if you bought a call to bet on a bullish earnings event. And you were wrong, then selling a put would add to your delta risk and flatten your gamma position (probably even make you short gamma). At the same time the vol will have already come in so you won't have any benefit to that. Sometimes vol comes in throughout the day, but majority of the move will happen on the open.
 
Quote from newwurldmn:

I don't follow what you are trying to do here...

but if you bought a call to bet on a bullish earnings event. And you were wrong, then selling a put would add to your delta risk and flatten your gamma position (probably even make you short gamma). At the same time the vol will have already come in so you won't have any benefit to that. Sometimes vol comes in throughout the day, but majority of the move will happen on the open.
More...

I'm trying to follow you here too but not quite sure....I've tested on "condors" I think that's what they are called with debit spreads on puts and calls before earnings. That's about as wild as I have gone I think.....Other than that just straight strangles/straddles, spreads so far. Nothing too wild yet.

I did buy 1 AAPL mar 17 2012 $590 call at $2.40 just now. Hedges against my put and I could make some money too just in case AAPL wants $600 by end of day again. $240 risk, high chance of total loss by end of day. We'll see though.
 
atticus,

CBOE Put/Call Ratios
Total Put/Call Ratio 0.70
Index Put/Call Ratio 0.89
Equity Put/Call Ratio 0.52

The CBOE Equity P/C Ratio has almost 2 calls for every 1 put in open
interest.

Does this tell me that Call Sellers are feeling the pain on this option expiration day? How do you read this?


Jeff
 
You must log in or register to reply here.
Back
Top