Only Apple

[atticus]

Quote from rockefehler:

No, but I think it will surge up in one or two candles above the last top within one or two days, not the middle of may. I'm letting air run out of the options and wait patiently for the right moment. The may 18 640 call is almost trading at it's pre-announcement level now, and seems to bottom. But maybe it will still go lower.

Don't use TA to value options. Vol in that 640 call has dropped 2000bp while the stock has rallied 43 here. It's not indicative of a move, any move.

 

[rockefehler]

Doing a short scalp now, just for fun

 

[rockefehler]

Quote from atticus:

Don't use TA to value options. Vol in that 640 call has dropped 2000bp while the stock has rallied 43 here. It's not indicative of a move, any move.

I find that options charts form the same patterns as direct instrument charts, so vol and time decay are all accounted for somehow. I don't use regular TA, don't care for the 600 level at the moment for instance.

 

[rockefehler]

The pattern aapl is forming since the spike is what Hershey calls "4 o'clock drift". He isn't as crazy as he sounds.

 

[rockefehler]

Exited my short for a nice little profit.

 

[atticus]

Quote from rockefehler:

I find that options charts form the same patterns as direct instrument charts, so vol and time decay are all accounted for somehow. I don't use regular TA, don't care for the 600 level at the moment for instance.

Well the chart is a representation of vol, synthetic or natural, but the various curvatures mask it (not normalized). I wouldn't place much emphasis on charting option premium. I would say it's absolutely detrimental.

If you see the same patterns then stick to the underlying chart.

 

[rockefehler]

Not the same patterns at the same time of course, e.g. if the stock bottoms the option will be in a downtrend, but patterns that adhere to the same laws. This is not surprising, since vol is tradable after all, so subject to the same speculative behavior of traders with its own ecosystem of dumb and smart money.

 

[atticus]

Quote from rockefehler:

Not the same patterns at the same time of course, e.g. if the stock bottoms the option will be in a downtrend, but patterns that adhere to the same laws. This is not surprising, since vol is tradable after all, so subject to the same speculative behavior of traders with its own ecosystem of dumb and smart money.

The problem is that you're not trading a vol or var swap, there are embedded "convexities" that cannot be seen on a price chart, rendering it counter-productive. An outright VIX futures chart is imperfect to say the least and your charting the options.

Do what you want.

 

[rockefehler]

So has each his own method; that's the beauty of it. I don't know any more about options theory than Black-Scholes and the Greeks, used in an intuitive way.

 

[atticus]

Quote from rockefehler:

So has each his own method; that's the beauty of it. I don't know any more about options theory than Black-Scholes and the Greeks, used in an intuitive way.

My last on this, but the roulette bettor thinks they also have the edge.