Trajan's second option journal

Somebody finally stepped up to the plate and bought 1000 of the 15s for .40. The 15 straddle based on current markets is 1.15/1.25. I enter this trade when it at the same price.
 
Sold a five lot of 12s @ 2.10 and bought 500 share of stock for 14.47. I , in effect, sold the put for .13 before commish. The market on the put is .05/.10.
 
Believe it or not, I am thinking of getting long IP or some of the other Paper companies. Be gentle when you pillory me for saying this, but Jim Cramer makes the case today on Realmoney.com. My own knowledge of the industry, which is fair to say is not that impressive, makes me think he's right. I've been watching the paper companies for eight years and traded them during their last cyclical upturn back then. In fact, the second stock I ever bought was Bowater. I have been waiting for a hint of the next cycle for a long time.
 
I like the idea of trying to get an edge off-floor and remaining mainly delta-neutral: i'm doing something similar in a different stock. Beware though that this way of trading hasn't got a long lifespan anymore: just look at the way things are quoted on Eurex: in pennies so there is nowhere to lean. No way to adjust youre quotes because of cancelation costs and electronic eyes sweep everything that's even a fraction out of line. Hope i find something else before this happens ...
 
Quote from cvds16:

I like the idea of trying to get an edge off-floor and remaining mainly delta-neutral: i'm doing something similar in a different stock. Beware though that this way of trading hasn't got a long lifespan anymore: just look at the way things are quoted on Eurex: in pennies so there is nowhere to lean. No way to adjust youre quotes because of cancelation costs and electronic eyes sweep everything that's even a fraction out of line. Hope i find something else before this happens ...
More...
Yeah, I know what going on that side of the pond. Sometimes I sit here laughing thinking to myself, "you're sitting here trying to capture a couple of fucking pennies of edge". At least it exists now, some people here can't come to grips that such a free for all won't neccessarily be so great. I don't know what I'll do at that point. It's one of the reasons I am thinking of becoming a member, purely for the mass quote capabilities.
 
Not so sure that is the solution: in the electronic world you better be right about your vol, because the spread is so small it seems hard to make a living out of it except for the big financial groups who can offset things over many stocks. Not sure there is a place for small locals, or am i wrong ... ?
 
Stock closed unchanged on the day. I like the fact the stock is volatile, but how about closing on one end or the other of the extremes. I'm looking for more like .40 to .50 cents before I adjust.
 
Quote from Trajan:

My ten lot bid for calls in Bowater is jamming the stock higher.
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Yep, happens all the time...

You can place a 2 lot on SPX calls/puts and suddenly... the bid/ask moves (away) even if the option didn't trade that day, and the underlying market is favorable to the floor! They just don't want to fill until (like you noted) the retail entry is medicore at best. Of course this often forces one to cancel or modify and then their (MMs) exchanges rip the member firm for cancel fees.

This kind of b.s. is ripe for RICO. Conspiracy to create need for modifications and bring dollars into the exchanges!

:D

Which ones are you bidding on BOW?


Ice:cool:
 
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