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My Options Play
- Thread starter Multioption
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Quote from cnms2:
I don't follow: are you talking mostly about far OTM options? Could you give a DIA example?
Good question, and I left out the details:
Options with 4 weeks or less to expiration and 1 strike OTM.
DIA at 104.14.....Buy Nov104 puts at $1.20 or Nov105 Calls at $0.75. By expiration one of them WILL be double. In my opinion the Calls. The DIA is good because the option strikes are priced very dollar.
Nov104 put doubles if DIA goes bellow $101.6 at expiration (104-2*1.2).Quote from uninvited_guest:
Good question, and I left out the details:
Options with 4 weeks or less to expiration and 1 strike OTM.
DIA at 104.14.....Buy Nov104 puts at $1.20 or Nov105 Calls at $0.75. By expiration one of them WILL be double. In my opinion the Calls. The DIA is good because the option strikes are priced very dollar.
Nov105 call doubles if DIA goes above $106.5 at expiration (105+2*.75).
What am I missing?
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Quote from cnms2:
This light crude oil chart shows a bullish divergence. Are we headed for the winter oil price rally? Is anybody here trading oil futures?
I posted this some months ago in another ET thread.
http://www.elitetrader.com/vb/showt...perpage=6&highlight=mhashe crude&pagenumber=3
http://www.elitetrader.com/vb/attachment.php?s=&postid=820767
My observation in the QM intraday shows motivated demand on any dips below 59.50. imho we're setting up for a minor reaction rally to a 63/65 price band level. However it is still my opinion that the down-trend will eventually consolidate at the 50/55 price band that coincides with the lower weekly channel. I recall recent OPEC press clips stating that to be the optimum high level where energy demand is not diverted to other energy sources thereby limiting the demand for crude.
Quote from iceman1:
NIHD back to highs from October 4th - D/top? (note -- also a fairly "symmetrical" double high -which is always better when finessing into a double high or low trade).
maybe keep eyes open for short entry -- going to convert my positions tomorrow - take off ITM longs - create time spreads with Dec 90c - depending on manana's price action
in other words - sell my long NIHD Dec 80c/85c-- and buy Dec 90c to spread with existing position in Nov 85 calls or maybe just keep long Dec 85c.
iceman, I have been following your calls with interest. I must say they have been doing well to date. However imo NIHD is probably topping and will be lower within the next week. Charts show motivated selling between 85.50 and 86, if it fails to break above this level next couple of days I would consider initiating a short position in this stock. Just my 0.02, I could be wrong, and very often am.
Quote from cnms2:
Nov104 put doubles if DIA goes bellow $101.6 at expiration (104-2*1.2).
Nov105 call doubles if DIA goes above $106.5 at expiration (105+2*.75).
What am I missing?
I expect one leg to double by next week, the calls, so the DIA doesn't have to move as much as your quotes.
My mistake: I thought you meant that no matter what one of them will double. I didn't understand that you were making an underlying price and maybe volatility forecast. Good luck with your trading!Quote from uninvited_guest:
I expect one leg to double by next week, the calls, so the DIA doesn't have to move as much as your quotes.
Are you already into these positions, or you plan to open them?
Are you "forker"? Does the "pitchfork" work well for you?
Quote from cnms2:
Are you "forker"? Does the "pitchfork" work well for you?
Large liquid markets tend to trend inside of price channels . The pitch fork is nothing more than a price channel ( also described as magic parallel lines in some old-timer trading books ) with a handle for mental emphasis on the direction of trend. Yes, I do use price channels along with trendlines when making trading decisions. Price breaks outside of these zones signal a shift in sentiment. And a change in sentiment means a change in price.
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