My option trades

[falconview]

Hey Ryan

WHAT happened to you mon? Earnings time coming up. Tell us your alive, even if you got wiped out mon! We are all friends here, we just want to know. It´s educational for all of us.

KINGGYPPO

I really want to thankyou for that suggestion about turning my LONG CALLS into something else. Started a whole new train of thought. Burnt some midnight oil and figured the ATR for the MONTHLY BAR IS five strikes. With VIX 19 currently. I usually use 60 to 90 day options. Gives me time. THETA hadn´t really bothered me, because it is minimal, if I trade directional and am right, within a few days, to a week. But if I miss my TIMING, I can see where TIME DECAY would become problematical. ( I missed the TIMING on the CALLS )
So decided to convert both the CALLS and PUTS into DEBIT SPREADS. Read up on them a bit. Will wait, as I figure I need to do the conversion when I get as close to the STRIKE as possible, to increase the value of the selling of the far out strike. At the very least, it should I think, reduce my losses, if any eventually? But also give me a month to sit on my hands and watch them. As THETA decay will no longer be a problema. Anything can happen in a month. It appears to take about a strike and a quarter move to make the DEBIT spread pay off completely, after hitting the original buying STRIKE. Though you cover Breakeven pretty much half way through the strike of the Debit Spread. Lotta movement required, gyrations, but time frame this way is extended to 3 to 4 weeks of sitting on the trade, waiting for the market to gyrate in my direction once the conversion is completed.
So anyway, I´m now watching the market movement for STRIKES 67 for the CALLS and 66 for the PUTS.
Got 3 contracts on each to convert.
Hope I have it all figured out more or less?
Anyway, it was a good suggestion of yours and made me extend my boundaries of the possibilities.

 

[falconview]

GOOG Reverse Iron Condor PAPER TRADE EXPERIMENT

5 mins after the market opened and GOOG jumped a little bit. Not much.

The original spread total was $4.60 for both sides. Right now after the opening, the spread total on both sides is $3.60.

If I understand it right, that means the Reverse Iron Condor LOST MONEY. Am I right?

 

[babutime]

Quote from falconview:

GOOG Reverse Iron Condor PAPER TRADE EXPERIMENT

5 mins after the market opened and GOOG jumped a little bit. Not much.

The original spread total was $4.60 for both sides. Right now after the opening, the spread total on both sides is $3.60.

If I understand it right, that means the Reverse Iron Condor LOST MONEY. Am I right?

Why'd you do the RIC? I would've just bought the strangle or straddle instead.

Mind you the APR options will lose a lot of IV so initially, despite the move, you'll have a loss...

If only you could see the graph.

 

[scottandmo]

Quote from falconview:

GOOG Reverse Iron Condor PAPER TRADE EXPERIMENT

5 mins after the market opened and GOOG jumped a little bit. Not much.

The original spread total was $4.60 for both sides. Right now after the opening, the spread total on both sides is $3.60.

If I understand it right, that means the Reverse Iron Condor LOST MONEY. Am I right?

Yes, you lost $1 and a large part of that is probably due to bid-ask spreads because you're dealing with 4 legs. Lets say the bid or ask is $.15 lower on all of them, then you lost $.6 just from that, and the iron condor itself only lost $.4. The only chance of making money on this one is to hold till expiration and hope it's above 650 or below 610. Then you get $5. If you sell early you'll never get the full $5, so a $4.6 iron condor is pretty much lose-lose.

For iron condor's you should be looking for something that costs about half of the max profit. You have to go way OTM on GOOG to get that with $5 strike differences, like 605/610/670/675 for about $3. Then you need GOOG to be above 675 or below 605

 

[babutime]

Quote from newwurldmn:

I wouldn't view April listed as vol. after a 6percent move a one week option has little time value left.

Did a little backtesting ... Back in Jan, the exact same conditions existed before Jan 19th earnings.

Back then, if one sold the JAN monthly premium and bought the last of the JAN weeklies a day before the earnings (because the weeklies got listed on Jan 18th) the Short JAN monthlies would've made a loss but the weeklies with about 7 days remaining made a killer...)

The expiration dates are reversed now but the conditions are sorta the same. Similar IV levels between the two expirations also...

I'm not one to completely rely on past results but if one could assume a $40+/- move as the worse case scenario- added to the fact that this time the move (there simply isn't much fanfare as there was before Jan and other earnings)

A large downside move is also always welcome.

 

[scottandmo]

Quote from babutime:

Why'd you do the RIC? I would've just bought the strangle or straddle instead.

Mind you the APR options will lose a lot of IV so initially, despite the move, you'll have a loss...

If only you could see the graph.

I am interested in a strangle, but it looks GOOG has to move at least 6% to break even, it just seems like the odds of profit are low. How do you go about closing this position after earnings to improve the odds?

 

[babutime]

Quote from scottandmo:

I am interested in a strangle, but it looks GOOG has to move at least 6% to break even, it just seems like the odds of profit are low. How do you go about closing this position after earnings to improve the odds?

My apologies, you should also sell some elevated premium. So in case homie just decides to chill, you clean house with the IV just dropping like its hot... lol ... (listening to snoop as I type)

It'll be easier on the margins too cuz you can get into more lots...

And JUST in case the stock does go bananas, throw in an EXTRA few straddles just to save your ass...

That is, in essence, the idea of this Tarzan Does Jane trade that was discussed in the other thread...

 

[scottandmo]

I'm in a paper trade which is my guess at a Tarzan does Jane.

+10 GOOG Apr 21 650 Calls $19
+10 GOOG Apr 21 630 Puts $14.7
-8 GOOG Apr 13 640 Calls $22.3
-8 GOOG Apr 13 640 Puts $17.5

Cost $2000, Margin requirement = $8000

I'll update tomorrow. my simple outcome calculation:
Goog at $630 or $650: Apr 13's worth ~$10000 ($12x8), Apr 21's worth ~$10000 ($10x10): $0 value - $2000 cost = $2000 loss
Goog at $640: Apr 13's worth $0, Apr 21's worth ~$10000 ($5x20): $10000 value - $2000 cost = $8000 profit

Outside 630 or 650 starts to turn profit. No idea what Apr 21's actual worth will be after IV drop, just a random best guess.

 

[falconview]

Well I had got VIX at 19. But when I ran the option calculator it came out as VIX 15 for a trade.

I¨m noticing that makes a lot of difference in the power of the moves when using hourly charts. Becomes too weak. Shallow as it were. So instead of using daily and hourly, I´m switching to weekly and daily. The signals are different in the larger time frame for trades.

AT LEAST I HOPE SO!

 

[atticus]

Quote from scottandmo:

I'm in a paper trade which is my guess at a Tarzan does Jane.

+10 GOOG Apr 21 650 Calls $19
+10 GOOG Apr 21 630 Puts $14.7
-8 GOOG Apr 13 640 Calls $22.3
-8 GOOG Apr 13 640 Puts $17.5

Cost $2000, Margin requirement = $8000

I'll update tomorrow. my simple outcome calculation:
Goog at $630 or $650: Apr 13's worth ~$10000 ($12x8), Apr 21's worth ~$10000 ($10x10): $0 value - $2000 cost = $2000 loss
Goog at $640: Apr 13's worth $0, Apr 21's worth ~$10000 ($5x20): $10000 value - $2000 cost = $8000 profit

Outside 630 or 650 starts to turn profit. No idea what Apr 21's actual worth will be after IV drop, just a random best guess.

You're going to have to cover the short weekly straddle at some price. Don't assume it's going out at intrinsic. There will be a lot of folks needing to cover into expiration. I've seen neutral-straddles on GOOG go out above $3.00.