Weekly AAPL Butterfly Ideas from Jeff Augen

C

comintel

This is a great recent webinar with well-known options author Jeff Augen:

http://optionstribe.com/2012/08/rec...ice-distortions-in-weekly-options-jeff-augen/

He has a lot to say about trading weekly options, especially AAPL.

He likes to buy AAPL butterflies on the Thursday when they are released, then sell them on Friday or Monday.

The reason, he says, is the weekend (actually pre-weekend) price decay, that is actually mostly over by late Friday.

He comments that huge numbers of retail traders are selling the weekly options which is depressing their price.

He also likes to sell butterflies on the last day before expiration.

I know that some here are making similar trades.
 
Quote from comintel:

This is a great recent webinar with well-known options author Jeff Augen:

http://optionstribe.com/2012/08/rec...ice-distortions-in-weekly-options-jeff-augen/

He has a lot to say about trading weekly options, especially AAPL.

He likes to buy AAPL butterflies on the Thursday when they are released, then sell them on Friday or Monday.

The reason, he says, is the weekend (actually pre-weekend) price decay, that is actually mostly over by late Friday.

He comments that huge numbers of retail traders are selling the weekly options which is depressing their price.

He also likes to sell butterflies on the last day before expiration.

I know that some here are making similar trades.
More...

very good webinar, thanks for posting....
 
From 8:10 I took a 35 second sound clip on Jeff Augen's views of selling straddles/strangles. Interesting video but they should have edited it.

:)

Click the play button to listen
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I dont know if i agree w him about his last piece detailing the goog downdraft where he says stock goes down when the public covers their covered call position then sells their long stock. I don't think that dynamic adequately explains the down draft. Think about it...he says the public buys their short calls then hits the stock bid to flatten out hence the down move . BUT the market maker selling the calls to public has to buy stock as a hedge so there would be underlying bids on that stock.
 
Quote from MushinSeeker:

I dont know if i agree w him about his last piece detailing the goog downdraft where he says stock goes down when the public covers their covered call position then sells their long stock. I don't think that dynamic adequately explains the down draft. Think about it...he says the public buys their short calls then hits the stock bid to flatten out hence the down move . BUT the market maker selling the calls to public has to buy stock as a hedge so there would be underlying bids on that stock.
More...

It's ridiculous considering the notional value of the OI.
 
Atticus. Are u saying the amount of trades emanating from the OI alone is not enough to push goog around ? He did say that since goog gapped up a lot, it crossed multiple strikes which means that all the players who were short all the calls on those strikes have to participate in the unwinding..I guess. but that still does not change the fact that for every ITM call the "public" lifts from the MM to cover their short, the MM have to buy 100 shares of stock to hedge.... right?l
 
Please note that in his books. He does show when it is appropriate to buy long strangles/straddles and when to sell straddles/strangles.

That being said, he doesn't seem to use them that much anymore since the option market has changed since he wrote those.
 
My other post didn't show up or it's a hiccup. But, I posted that Jeff does show when he used to do long straddles/strangles and short ones in his books.
 
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