Nanuk Trap: The State of the Union is Strong

Spy By Friday Close

  • +4%

    Votes: 3 13.0%

  • +2%

    Votes: 4 17.4%

  • flat

    Votes: 7 30.4%

  • -2%

    Votes: 3 13.0%

  • -4%

    Votes: 6 26.1%
  • Total voters
    23
Quote from shortie:

i would like to play the IV spike going into Fed. usually i play it with stocks (e.g. trying to buy those that drop right after the announcement and selling them later). the reason this method works i think is because IV spikes going into the announcement and then reverts back.

how do i catch IV spike with options? i am looking at spy feb 107 put and 111 call. i would like to sell them both to strangle IV spike. right now spy 109.20 and the combo is 3.21/3.23.

my question is when to sell the strangle? before the announcement, or enter limit orders that would be triggered after the announcement?
More...

today's observations/speculations/plans:
1. sold soon before FOMC for 3.11 (one fill was very close to FOMC, maybe a bit of Vol spike, no fills after FOMC)
2. at close the strangle is quoted 2.93/2.96 (easy money it seems)
3. the best price was actually in the morning 3.21 (i believe that's what i saw, there may have been better prices earlier when i was not looking at the strangle). i guess the possibility of a large move before FOMC contributed to that)
4. left short strangle until after Obama's speech. the hypothesis is that he won't move the market much, but IV will drop after Obama's uncertainty is removed.
 
Quote from shortie:
2. ....(easy money it seems)
4. left short strangle until after Obama's speech. the hypothesis is that he won't move the market much, but IV will drop after Obama's uncertainty is removed.
More...
It's the end of the month. Be wary of "window dressing". :eek:
 
Not yet... sure to come though. I did hear something about forgiving college loans though - just add it to the deficit and let the taxpayers cover it!
 
Quote from shortie:

today's observations/speculations/plans:
1. sold soon before FOMC for 3.11 (one fill was very close to FOMC, maybe a bit of Vol spike, no fills after FOMC)
2. at close the strangle is quoted 2.93/2.96 (easy money it seems)
3. the best price was actually in the morning 3.21 (i believe that's what i saw, there may have been better prices earlier when i was not looking at the strangle). i guess the possibility of a large move before FOMC contributed to that)
4. left short strangle until after Obama's speech. the hypothesis is that he won't move the market much, but IV will drop after Obama's uncertainty is removed.
More...

out at 2.73 - easy money :)

BTW, not many nanuks got trapped by Prez.
 
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