The QQQ spread is 1.5% wide while the equivalent AAPL spread is less than 0.9% wide. Let's assume you weren't dropped on your head and you were comparing an apple to an apple. The stat-vol on AAPL is much higher than Q. The payoff is in-line with the higher vol. In reality, the AAPL spread is "cheaper".
My option trades
- Thread starter ryanpatrick
- Start date
The QQQ spread is 1.5% wide while the equivalent AAPL spread is less than 0.9% wide. Let's assume you weren't dropped on your head and you were comparing an apple to an apple. The stat-vol on AAPL is much higher than Q. The payoff is in-line with the higher vol. In reality, the AAPL spread is "cheaper".
My bad, I was looking at the Mar 30, not 23rd.
Not Applicable in the context of this thread, which is "betting on a big move in the stock price". Enough of a move to make a profit from the options, in most cases OTM options.
I will give an update next week.
Quote from ForexForex:
Not Applicable in the context of this thread, which is "betting on a big move in the stock price". Enough of a move to make a profit from the options, in most cases OTM options.
I will give an update next week.
Then don't compare the R/R to AAPL options, you twit!
Fortunately I don´t understand the abbreviations. BUT TWIT?
If that means what I think it means? ATTICUS my friend, where is that manner of the old Southern Gentleman you used to have?
Aaaaah! Urgghhh! Personalities getting in the way of discourse on technical expertise. Keep it logical and SIMPLE so us amateur readers can understand. PLEASE?
If that means what I think it means? ATTICUS my friend, where is that manner of the old Southern Gentleman you used to have?
Aaaaah! Urgghhh! Personalities getting in the way of discourse on technical expertise. Keep it logical and SIMPLE so us amateur readers can understand. PLEASE?
Quote from falconview:
Fortunately I don´t understand the abbreviations. BUT TWIT?
If that means what I think it means? ATTICUS my friend, where is that manner of the old Southern Gentleman you used to have?
Aaaaah! Urgghhh! Personalities getting in the way of discourse on technical expertise. Keep it logical and SIMPLE so us amateur readers can understand. PLEASE?
I have a pet peeve regarding stupidity. FF directly compares the risk-reward of the QQQ and AAPL spreads. Then he states it's "not applicable" to compare the two... when he's the one making the comparison.
If someone is going to run their mouth then they should have something to say or at least be intelligible. I won't apologize for my attitude towards these trolls.
Aaaaaah! The light bulb goes on overhead, like in the old time comic books. THAT´s what R, R, means? Risk, Reward. Well, well,well! This amateur learns something every day. 
Enough curiousity, can´t remember who was quoting volatility by a number. Something like 38, or like that? What I wondered was where and how they were getting that number?
Enough curiousity, can´t remember who was quoting volatility by a number. Something like 38, or like that? What I wondered was where and how they were getting that number?
Forex Forex
You got me interested here. Going to have to look this up in the option train.
::::::::::::::::::::::::::::::::::::::::
From Forex Forex
"I will post a paper trade on the QQQ to compare it with the AAPL 585/580 put spread, expiry March 23. Both the AAPL and QQQ spreads are OTM, as of this post.
Buy 66 put @ $0.30
Sell 65 put @ $0.12
Debit $0.18
Gross possible return $1.00 (5x the debit, the AAPL spread is 3.5x)"
________________________________
From Falconview,the idiot amateur.
I really don´t have a clue what you are doing though? But it looks like you are trading the WEEKLY if it is expiring on March 23rd. And in reflection it would have opened on this Friday?
So you did a debit spread. Cost you $18 + $7 commissions = - $25 per contract. I´m back- engineering this trade, I theeenk. From an ignoramus point of view.
The GROSS RETURN, not sure how you calculate that for a debit spread. Haven´t thought about it before. So the R,R, as friend ATTICUS calls it would be 4 to 1 if you win.
Let me see as I think about this? Debit Spread, buy the expensive option and sell the cheap one. Long pause, while I get into the TOS option chain, this late Friday night. Okay, my spread would be .21 cents. We shall take yours though at .18 cents.
Now the QQQ index is at 66.52. Another long pause, while I get my chart up. Hmmnnnn! ( thinking out loud with my fingertips ) My chart does not agree with market going down as a certainty yet in the QQQ. In fact, I´m paper trading that bunch of bets based on it stay fairly sideways, or UP.
Okay. Questions; 1 ) possible return is $1 you say? How does that come about?
2) What happens if the QQQ goes through index 66? Haven`t got that picture in my mind yet?
2) If it goes through 65, what happens then?
3) What happens if the index goes to 67, or 68?
I don´t have any experience working with debit spreads. Let me think some more. ****&&%%$$
A CALL debit spread would be betting the index is going up. So your PUT debit spread must be betting the index is going down? So my guess is you want the market to GO THROUGH DOWNWARD, through the debit spread? Have I got that figured right? You are OTM, so you were saving money, in the purchase.
The result must be, you want the market to go down, below index 65 and give you maximum --- MAYBE! Then you would close it to profit. If you are wrong you are just out $25 total per contract. With the possibility of earning a $100 if the market does go down.
Hmmnnn! Gambling indeed, but it does sound good. Risk $25 to make a $100, which would give you $75 net profit I think.
Very interesting idea. New to me, OLD to most of those on here, I imagine?
I don´t think the QQQ is going down in five days, but it could?
If I have it figured right, tell me please. I like the idea and might use it in the future if this is the way it goes.
You got me interested here. Going to have to look this up in the option train.
::::::::::::::::::::::::::::::::::::::::
From Forex Forex
"I will post a paper trade on the QQQ to compare it with the AAPL 585/580 put spread, expiry March 23. Both the AAPL and QQQ spreads are OTM, as of this post.
Buy 66 put @ $0.30
Sell 65 put @ $0.12
Debit $0.18
Gross possible return $1.00 (5x the debit, the AAPL spread is 3.5x)"
________________________________
From Falconview,the idiot amateur.
I really don´t have a clue what you are doing though? But it looks like you are trading the WEEKLY if it is expiring on March 23rd. And in reflection it would have opened on this Friday?
So you did a debit spread. Cost you $18 + $7 commissions = - $25 per contract. I´m back- engineering this trade, I theeenk. From an ignoramus point of view.
The GROSS RETURN, not sure how you calculate that for a debit spread. Haven´t thought about it before. So the R,R, as friend ATTICUS calls it would be 4 to 1 if you win.
Let me see as I think about this? Debit Spread, buy the expensive option and sell the cheap one. Long pause, while I get into the TOS option chain, this late Friday night. Okay, my spread would be .21 cents. We shall take yours though at .18 cents.
Now the QQQ index is at 66.52. Another long pause, while I get my chart up. Hmmnnnn! ( thinking out loud with my fingertips ) My chart does not agree with market going down as a certainty yet in the QQQ. In fact, I´m paper trading that bunch of bets based on it stay fairly sideways, or UP.
Okay. Questions; 1 ) possible return is $1 you say? How does that come about?
2) What happens if the QQQ goes through index 66? Haven`t got that picture in my mind yet?
2) If it goes through 65, what happens then?
3) What happens if the index goes to 67, or 68?
I don´t have any experience working with debit spreads. Let me think some more. ****&&%%$$
A CALL debit spread would be betting the index is going up. So your PUT debit spread must be betting the index is going down? So my guess is you want the market to GO THROUGH DOWNWARD, through the debit spread? Have I got that figured right? You are OTM, so you were saving money, in the purchase.
The result must be, you want the market to go down, below index 65 and give you maximum --- MAYBE! Then you would close it to profit. If you are wrong you are just out $25 total per contract. With the possibility of earning a $100 if the market does go down.
Hmmnnn! Gambling indeed, but it does sound good. Risk $25 to make a $100, which would give you $75 net profit I think.
Very interesting idea. New to me, OLD to most of those on here, I imagine?
I don´t think the QQQ is going down in five days, but it could?
If I have it figured right, tell me please. I like the idea and might use it in the future if this is the way it goes.
I don't know if Ryan is gambling or not. He's made a lot of money, but it's been in a bull market and he's generally be massively levered long. But he's intellectually honest, so I am happy for him. But calling a strategy "horrendous" is a strong word. You didn't answer my question about whether his trade would be acceptable if he did it in stock instead of options expiring in three days. It seemed from your post the three days was big deal to you.
I wasn't saying your observation was wrong. You are right. Generally there is dampend vol on expirations, but your reason for it was completely backwards. It's the long vol guys who dampen vol. Not the short options people who are doubling down on their risk to protect their options positions. Who would do something that stupid? If you were as much on a expert on options you woud understand how the market trades options into expiries. And 3:30 isn't a magical time. Many times stocks fall into their pins at 3:30. Many times they don't.