Vertical Spreads for Aggressive Growth
- Thread starter Cache Landing
- Start date
Indeed, who knows? That's where www.momoneyscrystalball.com comes in
Sure, I could miss an opportunity. I'm not risking any money by waiting though and there's always another bird flu around the corner (yes, what happened to that?)
Someone started a thread on VIX options somewhere around here so i remembered this bet. Just wanted to bring it back to life to show the potential and the great risk/reward of this trade. Today, two weeks after the trade was placed the VIX hasnt moved as expected yet the spread is still quoted at $1.35 with only 2 days until expiration. So you've seen the risk, i will leave the reward research for you guys.
Quote from rallymode:
Someone started a thread on VIX options somewhere around here so i remembered this bet. Just wanted to bring it back to life to show the potential and the great risk/reward of this trade. Today, two weeks after the trade was placed the VIX hasnt moved as expected yet the spread is still quoted at $1.35 with only 2 days until expiration. So you've seen the risk, i will leave the reward research for you guys.
Yeah, I learned about those by stupidly taking the other side of that trade. Back in June I bought some JUL/AUG 15 put calendars when the VIX was at 18. When the VIX traded down my shorts went in the money and my longs didn't move at all :eek:
How bout the charts on XLE. Looking great for a bull run. Strong bounce off the support at 50, and then a big break through resistance today. Closed above the 20, 50, and 200SMA on decent volume. Maybe a slight retrace, but next stop likely 58.
Well, this market is still reacting to old news as if it's new news. Looking at some fairly healthy profit taking today until the NAHB housing index reported, and then of course it induced a small rally. Thing is, interest rates have been dropping recently so of course the housing outlook is going to improve a bit. But the kicker is, the index went from 30 last month to 31 this month. Last year it was in the 70's. For all intents and purposes it pretty much remained flat, but that's good news right, that even in the face of declining interest rates the builders aren't at all more confident about the near future of home building?
But hey, we are in rally mode. I still say suckers rally but I'm not going to get in the way of this one. I'll just buy more time and wait.
But hey, we are in rally mode. I still say suckers rally but I'm not going to get in the way of this one. I'll just buy more time and wait.
A convincing breakout is unlikely until next APR/MAY. An unusually cold winter will bolster heating oil/NG but nothing to cause a breakout in oil.
Well, the market finished stronger that I had thought it would today. Also the big players reporting this evening (YHOO, INTC, IBM) are all up AH. If the CPI causes a rally tomorrow that doesn't get blocked by housing data, then I'm considering legging out of my OCT bear call rather than rolling into NOV. I will only do this if I'm pretty confident that we will gain 10+ points intraday tomorrow. If it looks to be choppy tomorrow morning then I will simply roll into NOV and trade my way out of the hole later.
Congress passed a law that outlaws any SPX correction bigger than .9%. Price ceiling of 12 has been set for the VIX. Had a lunch near the CBOE yesterday and they were having a sale on SPX puts - 2 for 1 for strikes within 1 sigma, the rest were being given away for free. They come with a t-shirt that says "Dow Record Highs, VIX Record Lows". Please trade accordingly.