Top of Today march 24

one other thing.... the only reason i bought 27.5 calls today instead of 25's is because the 27.5's had less bidders and i got in at a better price than i could have got the 25's.

You should watch ATM vix option pricing throughout the day sometime. It's not that difficult to scalp .10 cents or so, which isn't to shabby for $1.00 - $2.00 contracts.
 
Riskfree,

Your entry timing on the shorts may end up being a decent entry.
So much of this weak market is news driven (mostly bad) from day to day. This has a tendency to trump technical levels of support and resistance.
"This market is like watching a drunk walking a 100 foot tight rope. You know he's going to fall frequently, but every now and then he's able to makes it 4 or 5 steps."

I have been sitting here patiently since my last short on 03/19, waiting for my next short at INDU 12,750.

Good trading to you,


Jeff
 

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Quote from S2007S:

12800 is the next target for the dow everyone is speaking of, at that point I will let go 1-2 more longs and add some more inverse funds, most likely TWM, SMN, DUG, EEV. However I think this is a short term overbought market now. The bull market is not back and wont be for quite sometime, there is nothing great in the economy now that is going to help the market back to 14k and beying....
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Despite all the wranglings in the past week by the Feds and massive rate cuts, saving Bears & Stearns and opening floodgates of liquidity its a pity that you are oblivious of the state of affairs and still thinking in those dark days of January when things were dark and gloomy.

Somebody not having a sense where things are going and shorting a rallying markets is a insane gamble. You do not possesses any Technical Analysis background either, you cannot see all major indexes are above 50 day averages and flattening out which will act as support and would be hard to short. DJ Transports and Nasdaq clearly in a bullish spike on heavy volumes.

Just keep beating the same drum and keep losing your shirts. Shorting is hazardous in this zone, do it on your own risk.
 
Quote from DennisR:

After I posted I realized it must have been confusing to understand. When I meant I was going short, i meant short the market (which to me is long vix calls) Yesterday i bought 25c at around 1:30 and closed them out for a modest profit around 2:30.

Today I opened a 27.5calls trade after the terrible consumer number (and housing number earlier). The market did go down a bit but it never reflected in the vix options pricing. I knew if we weren't going down after that i was in trouble so I bought 25puts to effectively put me in a strangle. I usually would never do this but since vix is pretty much dead center of it's range lately i figure i should be able to cover both positions by april expiration. The market then remained dead all afternoon so i have both positions open still. I'm not going for huge gains, just .10 to .20 cents which is well below daily fluctuation for ATM vix options. The unusually flat afternoon put me out of business so we'll see what the rest of the week brings.


Dennis
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Scalping 10 cents and 20 cents! you make me puke right here.

How come you do not have enough background to play both long & short, using options on RUT and IWM? You can use IRON CONDORS one standard deviation out in the boon docks with short puts and calls having a 90% probability of not touching the price? Back it up with support and hedge it so your maximum loss is predefined and contained. That way it does not matter where the hell this market goes you still rake in serious money.

I have opened several positions on NDX and RUT and IWM last 2 days and I am both long and short. Its a high probability trade and its 90% successful. Income generating $2.00 - $4.00 in credits ! On 12 contracts $3000 to $4800 per trade! Go figure.
 
Quote from DennisR:

one other thing.... the only reason i bought 27.5 calls today instead of 25's is because the 27.5's had less bidders and i got in at a better price than i could have got the 25's.

You should watch ATM vix option pricing throughout the day sometime. It's not that difficult to scalp .10 cents or so, which isn't to shabby for $1.00 - $2.00 contracts.
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Dennis,

Thanks. I found what you are doing doubly original. First the tool you use to trade the market, and second you go long the premium of these options instead of short (the typical customer should be a portfolio hedger). I was thinking to short OTM calls on the VIX when vol is high, and let the clock run to send them to zero if I am right about the strike.

Now I could understand that you can make money even on the long side of premium. But I think you success in this is due to you good timing and you quick hands (you get in and out, and do not less the clock kill you).

In option, there is a subtle theoretical result that implies that in the first 20% of the time left on the option, the buyer has an edge (from the time point of view), and beyond it the seller of premimum starts his winning. The winning buyer has to be quick (and you seem to be) and the winning seller has to be patient. Patience is a very difficult thing even when one is paid to be patient! :)
 
Quote from HedgefundTrader2:

Scalping 10 cents and 20 cents! you make me puke right here.

How come you do not have enough background to play both long & short, using options on RUT and IWM? You can use IRON CONDORS one standard deviation out in the boon docks with short puts and calls having a 90% probability of not touching the price? Back it up with support and hedge it so your maximum loss is predefined and contained. That way it does not matter where the hell this market goes you still rake in serious money.

I have opened several positions on NDX and RUT and IWM last 2 days and I am both long and short. Its a high probability trade and its 90% successful. Income generating $2.00 - $4.00 in credits ! On 12 contracts $3000 to $4800 per trade! Go figure.
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Excuse me HedgeFundTrader, but there are two mistakes in what you wrote:

1. You need TWO standard deviation to be able to have the 90% prob.

2. It is not correct to say you have 90% chance of not touching the strike. In fact you have ONLY 80% (plus a little epsilon) for the short strikes not to be touched. The probability of TOUCH during the life of an option is TWICE the probability of ending up in the money.

I started a thread in the option section about something I call the Golden Relationship. In it you will find something I call the Golden Strike. The probability of the golden strike to be hit is something equal to around 85% (and the Golden strike is out of the money). Imagine what I just wrote here. Only one is 5 to 6 times a golden strike will not be touched. Trading option on the long side is not necessarily a stupid thing to do. If one knows how to time, and also how to manage money and be quick, you can be very successful. But it is not an easy thing to do.
 
Quote from riskfreetrading:

Excuse me HedgeFundTrader, but there are two mistakes in what you wrote:

1. You need TWO standard deviation to be able to have the 90% prob.

2. It is not correct to say you have 90% chance of not touching the strike. In fact you have ONLY 80% (plus a little epsilon) for the short strikes not to be touched. The probability of TOUCH during the life of an option is TWICE the probability of ending up in the money.

I started a thread in the option section about something I call the Golden Relationship. In it you will find something I call the Golden Strike. The probability of the golden strike to be hit is something equal to around 85% (and the Golden strike is out of the money). Imagine what I just wrote here. Only one is 5 to 6 times a golden strike will not be touched. Trading option on the long side is not necessarily a stupid thing to do. If one knows how to time, and also how to manage money and be quick, you can be very successful. But it is not an easy thing to do.
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That is correct.

My trades are outside one standard deviation by few strikes bodering 2 Standard deviations. The probability of price touching your strike is also correct. I am sorry I wasn't clear on that and thanks for bringing it up.

Options softwares are used and they automatically calculate all these things so I check them looks good I approve the trades and bingo it sails away..
 
Quote from riskfreetrading:

It is 12.27PM. I sold and started going short. Are we at the top of today?
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The game is already rigged. Feds and Treasury own the markets dude. Feds and The Treasury department is standing by should anyone mess with this bottom... just remember they won't let you take it out. They will manipulate the game, no matter what you do.

THE BOTTOM Its defended by 2 Fed rate cuts and markets were unable to breach 1270 area on SPX on 6 consecutive times in 7 weeks between Jan 22nd and March 18, 2008.
 
Quote from HedgefundTrader2:

The game is already rigged. Feds and Treasury own the markets dude. Feds and The Treasury department is standing by should anyone mess with this bottom... just remember they won't let you take it out. They will manipulate the game, no matter what you do.

THE BOTTOM Its defended by 2 Fed rate cuts and markets were unable to breach 1270 area on SPX on 6 consecutive times in 7 weeks between Jan 22nd and March 18, 2008.
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hedgefundtrader:

Thanks for explaining an iron condor to me. lol.

Maybe you can figure out a slight difference between scalping .10 cents in an hour and selling iron condors and waiting for time premium to pay.

I never said the market is going to retest lows this week. I said i want to scalp .10 friggin cents on a small pullback. You kind of sound like an idiot. Maybe you were joking?
 
Dennis,

Could you share about how your straddle on VIX did today? Vol is up, so your straddle should be up. Also, since it moved the straddle may have gained. Is this correct?

PS: I re-read my last post to you in this thread, and I noticed few typos. I did not check my post after posting it. Pls replace in various places the word "you" with the word "your". If you want me to repost it, I will be glad to do so.
 
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