My Options Play

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Still holding puts here.. these should be huge winners.

Quote from BudFoxx:

Buying NASDAQ 100 INDEX TRACKING January-06 $42 Put QQQMP Option @ .85

STOP @ 0.60

Buying S&P DEP RCPTS/SPDRS TRUST January-06 $127 Put SPYMW Option @ 2.05

STOP @ 1.70
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For this "quick and dirty" estimate I used the options' delta.
Quote from skeweddude:

CNMS2, I really think that your postings are helpful, esp the links you have sent incl chartbender and the historical quotes.

Just curious what you are using to figure out these probabilities:

A quick and dirty estimate of the probabilities that these puts expire worthless, with TXN $32.48 and 51 days to go (based on 11/30 data, when this discussion started):
  • TXN Jan 06 32.5 put bid $1.5: probability = 54%
  • TXN Jan 06 27.5 put bid $0.15: probability = 93%
So you see that you get ten times less premium for an increase in probability from 54% to 93%. If you do it repeatedly, selling the ATM will definitely fare better.

Thanks.
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Multioption,

Do you have any historical data regarding your trading method? I.e. number_of_wins / number_of_trades, average_win / average_trade?
 
CME

bluehorseshoe loves CME

gentlemen-- suggest you start your engines and wait for the flag to enter calls on this one - I believe a st bottom is being put in this week. Remember - it's been a falling knife - so be nimble and don't get burned on a candlestick! :D

I am long some cmj LL (dec 360c) - looking to spread - only Q is what strike and how many.

looking for target of 355 by Friday - then we'll review the tape etc.- maybe it can trade back to 365 - thereafter

downside risk- 10-12 points


Ice
:cool:
 
Quote from cnms2:

Multioption,

Do you have any historical data regarding your trading method? I.e. number_of_wins / number_of_trades, average_win / average_trade?
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You really like to add salt to his wounds, don't you? His current position bought @ $4.50. Another typical Multioption GAMBLE.
 
Quote from iceman1:

CME

bluehorseshoe loves CME

gentlemen-- suggest you start your engines and wait for the flag to enter calls on this one - I believe a st bottom is being put in this week. Remember - it's been a falling knife - so be nimble and don't get burned on a candlestick! :D

I am long some cmj LL (dec 360c) - looking to spread - only Q is what strike and how many.

looking for target of 355 by Friday - then we'll review the tape etc.- maybe it can trade back to 365 - thereafter

downside risk- 10-12 points


Ice
:cool:
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Iceman, be careful with that call skew. I always like to tell guys to avoid buying calls on sharp selloffs because you are paying for the skew. If CME does start to rally, the skew will flatten as you approach the strike. In other words, you are really fighting an uphill battle here. You would have been better off to sell the put skew to create the long deltas.
 
A Good trade on AX:

Sell naked Call 65 Jan at 1.20
Buy PUT 45 Jan @ 1.05
Total trade Credit : 0.15

I see AX highly overvalued. P/E is 72. Not bad to be short at 65.
P.S. I will not be able to do this good trade as my plate is extremely full.
 
Quote from hajimow:

A Good trade on AX:

Sell naked Call 65 Jan at 1.20
Buy PUT 45 Jan @ 1.05
Total trade Credit : 0.15

I see AX highly overvalued. P/E is 72. Not bad to be short at 65.
P.S. I will not be able to do this good trade as my plate is extremely full.
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That looks very solid after seeing the chart. Exchanges[cme, cbot] are trading at incredible P/Es, something to keep in mind. I would keep a close eye on the cme and cbot when trading this bear risk -reversal.
 
Quote from hajimow:

A Good trade on AX:

Sell naked Call 65 Jan at 1.20
Buy PUT 45 Jan @ 1.05
Total trade Credit : 0.15

I see AX highly overvalued. P/E is 72. Not bad to be short at 65.
P.S. I will not be able to do this good trade as my plate is extremely full.
More...

Good trade...........How did you find AX?
 
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