My Options Play

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Quote from iceman1:



Multi_Option
Registered: Jul 2004
Posts: 209

12-22-05 08:45 AM

VLO Credit Spread.

BTO: Jan 52.50 Put
STO: Jan 55 Put
Credit: 1.30
# contracts: 10

I will update!

iceman1
12-22-05 09:36 AM

open interest is 64000 on Jan 52.50 and 55c - only 5500 on the Jan 55p - that sure doesn't "look" like a precursor to >55 on VLO

of course -- anything is possible.

but frankly - even though I am long 'some' stock here- 50 is more likely than 55 - JMHO

p.s. I 'hope' you're correct :D
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well--- looks like my "read" on VLO was correct so far -

mulit_option you gonna stick with the bull spread - ? Maybe you can repair it with the front 50p.

(have a suggestion for your next front month spread - I will PM you with my thoughts)
 
Quote from iceman1:

well--- looks like my "read" on VLO was correct so far -

mulit_option you gonna stick with the bull spread - ? Maybe you can repair it with the front 50p.

(have a suggestion for your next front month spread - I will PM you with my thoughts)
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Iceman1, thanks....you are right on the VLO. A drop to 48 is likely. How are you handling the straddle? Weekly chart supports your sentiment. I bailed out at 1.80. Looking at ACL and TLT.
 
Quote from stockdoc:

Ice:

I am confused (which is probably a natural state of events for a realtive beginner in this game).

It sounds as though your AAPL trade is a bear call spread.

Why wouldn't you construct a (delta neutral) put backspread for your AAPL trade and just keeping rolling it over until the forecasted move happens?

Thank you.


:confused:
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yes --- the intent was/is to leg into a bear spread on AAPL (calls)

I have a put backsrpead on right now in AAPL- which I have rolled twice-- in the front series-- and yes I may/will perhaps have to still roll it out --- into February etc.

....unless AAPL gets whacked after 1/2/2006
 
Quote from Multioption:

Iceman1, thanks....you are right on the VLO. A drop to 48 is likely. How are you handling the straddle? Weekly chart supports your sentiment. I bailed out at 1.80. Looking at ACL and TLT.
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closed all 52.50c --- (.90)

placed order to re-sell Jan 52.50c for .50 higher -

and --- to sell Jan 50c if I can get >2.45

still long Feb 55p and short the Jan 52.50p-

and +stock (ratio 1/2 Feb 55p)

don't think VLO will see 48 - but could trade < 50 -- and its not impossible that it swings back to 55 by Jan 20th-- albeit it is not likely unless put volume picks up significantly on the front Jan contracts.
 
Quote from iceman1:

did you keep the VLO Jan 52.50p... ?
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No! I bailed out at 1.80 when a shift in direction occured on my chart. My focus is on exit point if/when trade goes wrong before injecting $100K in January. Experiment is panning out well.
 
Quote from iceman1:

don't think VLO will see 48 - but could trade < 50 -- and its not impossible that it swings back to 55 by Jan 20th-- albeit it is not likely unless put volume picks up significantly on the front Jan contracts.
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Why do you think the tail wags the dog in VLO? I don't understand the reliance on option volume or OI in a liquid stock. Meaningless.
 
Quote from riskarb:

Why do you think the tail wags the dog in VLO? I don't understand the reliance on option volume or OI in a liquid stock. Meaningless.
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thanks for the reply r/arb --

just an old habit I guess that has seemingly worked many many times- but no way will I argue with your comments when it comes to options --- however many times it seems the tail will do/does a large % of the wagging as we near expiry.

--- b.t.w. I mean that sincerely not sarcastically. Any options input from you or maverick74 is always welcome!

I am fairly good analyst/chartist on stock direction --- and many times --lately -- have been seriously thinking of trading much more on underlying and futures- messing less with option plays. The retail marginning is just a joke.

actually spent some of the weekend re-reading much of Sheldon N's book ---- took several options classes with him at CME ---years ago.



Ice
:cool:
 
Quote from stockdoc:

For Ice--Although the PD underlying gapped open a point at the open, the 140p only got up to 2.70 and the 135 made it to 1.55. Theoretically, I could have improved the spread from 1.15 to maybe 1.50 if I was working from my home system. Due to the fact that I am limited to trading through the functionally challenged IB Webtrader at work, I didn't have a realistic chance of being able to improve the spread.
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just interested in another opinion --- did you consider lifting the 140p leg today on the gap to new intra-day high- looking to re-sell it IF (when) PD (likely) reversed off the opening gap-- or is that too "iffy" a proposition? It has worked for me well sometimes - and it is tantamount to trading off the underlying - assuming a reasonably constant or increasing vega after any such reversal.
 
Quote from iceman1:


closed all 52.50c --- (.90)

placed order to re-sell Jan 52.50c for .50 higher -

and --- to sell Jan 50c if I can get >2.45

still long Feb 55p and short the Jan 52.50p-

and +stock (ratio 1/2 Feb 55p)

don't think VLO will see 48 - but could trade < 50 -- and its not impossible that it swings back to 55 by Jan 20th-- albeit it is not likely unless put volume picks up significantly on the front Jan contracts.
More...

re-sold VLO Jan 5250c @ 1.45

:D

expecting to see VLO near 53
 
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