Cosmic's MarketPlace Wrap - 10/15/2010

[cosmic]

Gotta love Opex. Round and round it goes. I can't believe the pivots were so accurate on the math. Now just need to figure out the next set of numbers - with an election right in the middle of the opex period.

How the hell do you play that?

Had one trade today, sold my MPG position for a 6% gain. It's been really underperforming, which of course has been the case for about 4 months, but it's still a good swing trade. I had hoped it would get over $3, but noticed yesterday it bumped up right against and then fell back down. I will be keeping my eye on it for some strength. One way I might play it for next month is short some puts rather than go long.

Hope everyone made some money today will do so on Monday. Members, please post your results along with your RDA of smileys!

[kbk3ck]

Made 2.28% and 6.03% on my SOXL and TYH respectivly.
My TNA calls were flat.

[tajmahal9898]

congrats Cosmic and kbK3ck on decent profits..

I had only one trade... closed my APPl vertical position that I acquired yesterday for 10K realized profit.. I had to do it because of today's date .. 15th.. I move funds from day trading account to other account..

This was a second month in a row (third this year) where the cash flow was negative..

[cosmic]

Sorry to hear about your draw-down Taj, it's not uncommon in this market right now which is stuck because of the upcoming election. Trend has been hard to predict, and even if you bought at 1004 two months ago, if you picked the wrong stocks, nothing helps. And it's not that you picked wrong, it's that the algos also knew what you were going to pick, and messed with the prices.

[ask2lern]

Wowzaa...........another opex yo yo.................I did numerous trades on SPY options all posted in the PPDT and had my best day of the month so no complaining ...............have not figured out but I am pretty sure net positive for Sept despite a few good blunders............Exalt for Cos.....................Live to trade another day..................Taj,cos,Kkbk.nice trades....................Taj its the year that counts IMO................hope all have a good weekend.................GL

[tajmahal9898]

Congrats A2L.. nice trading..

thanks Cosmic/A2L.. I am doing OK for the year but last two months were bad.. i made stupid mistake of sticking with CENX short position for too long.. Once I sold that monkey, I was able to recover a lot in one week... should/would have done this earlier...

Have a nice weekend..

[sp7015]

AAPL performed as expected. I see another 4% move coming Monday or after earnings. I am in the aapl $280 weekly calls at $23.60. Bought them on Thursday at open. The are up 49%.

My other position is CRUS. I bought Nov $15 calls for $1.60. They closed at $1.75 or up 9%.

I also am heavily weighted in CRUS stock and CRUS Nov $17 calls.

I am banking that CRUS will run up to atleast $19 after earnings.

[kbk3ck]

Hey Taj, I bet you kick arse next week buddy. Just get long tech and tech. Oh, and tech. LOL . Christmas and cold weather is coming so TYH and ERX should be good. Banks? Id be in FAZ. Or short FAS. BBY is gona be a badass of course.

[timber]

im buying crus tonight....thanks i forgot about her today

[actuarynomore]

Following the KISS Principle - Bought 1,500 shares of FAZ PM at $12.45 and sold mid-morning at $13.00 and turned around and bought 1,000 shares of FAS at $21.20 hoping for a possible run over $22 or will hold and average down - I'm enjoying this uncertain, yo-yo market - The best to all and good luck to whomever/whatever you are rooting for over the weekend - Dave

[benvestor]

I can only play monthly calls.. so i love being close to opex as far as the cheap premiums for scalps.. semi rough estimates here

scalped the 116 SPY calls for about 20% move
Scalped the 310 Oct AAPL calls for about and 75% move- bought around 307-sold at 310ish
Scalped GooG puts for -60%
Tried another AAPL 310 scalp mid day, got spooked - 10%
Held one AAPL 300 oct call from yesterday +90%

Holding an AAPL 330 Nov calls bought when AAPL was 312 at 8.50

Overall up about 20% today net ;D.. but still down for the month because of a large AAPL put loss

Have to vent.. i had 8 AAPL 300 calls yesterday I sold for 2.80.. they went to 14.50.. but broker prob would have made me dump at 10..

[bellevuetrader]

Hey.....who let Cos out to play again? LOL!

You're 2 for 2 bud...you sure you're feeling ok?

[popistoc]

Got out of DBA abt .5%ahead.

Got 2 360 AAPL calls right away this morning at .09 (I know, had an order for 50, never filled, I won't bore you w/ what ifs, etc...) and 2 320s at 3.65. Plan on selling at leas the 320s on Mon.

GLTA,
popistoc

[popistoc]

Sorry, that should read got out of DAG, not DBA.

popistoc

[exabi]

No trades, looking at aapl strategies over the w/e. Considered buying back my PCX OCT 12 Calls, but would be a wash if I bought vs. getting exercised over the w/e.
Ran some GOOG options strategies after the fact, when s/p was ~600, based on option prices at eod yesterday:
Straddle at 540 - 126%
Strangle at 530/550 - 126%
Strangle at 520/560 - 292%

[popistoc]

I cannot do straddles with Scottrade. What broker do you use?

Are straddles good only if the stock jumps one way or the other? Sorry if this seems redundant to you old timers.

TIA,
popistoc

[exabi]

Oct 15, 2010 18:41:34 GMT -5 popistoc said:

I cannot do straddles with Scottrade. What broker do you use?

Are straddles good only if the stock jumps one way or the other? Sorry if this seems redundant to you old timers.

TIA,
popistoc

I primarily use Fidelity.

If your broker does not offer a quick pick for a straddle, you can probably do it yourself. You buy 1 atm put, 1 atm call in that ratio.
here is an explanation:
www.theoptionsguide.com/long-straddle.aspx

The stock has to move a certain amount either up or down to be profitable. In the case of GOOG, the cost was $24/ contract. Had the price movement had been less than that, the straddle would have expired worthless.

[Rothschild]

Mighty exciting day; Opex is ALOT of fun. daytraded faz and fas all day long and made 5% today. Timber recommended Kerx puts and it looks like a good play for next month. Looks like most of the gang made a real killin over the past two months and I am delighted to hear that-I really am. We got a POMO day on tap for Monday so I decided to get ahead of the action buy buying some 3x plays (Tna,Drn, Fas, and Soxl) Have a wonderful and safe weekend everyone!

[timber]

Oct 15, 2010 18:55:11 GMT -5 exabi said:

Oct 15, 2010 18:41:34 GMT -5 popistoc said:

I cannot do straddles with Scottrade. What broker do you use?

Are straddles good only if the stock jumps one way or the other? Sorry if this seems redundant to you old timers.

TIA,
popistoc

I primarily use Fidelity.

If your broker does not offer a quick pick for a straddle, you can probably do it yourself. You buy 1 atm put, 1 atm call in that ratio.
here is an explanation:
www.theoptionsguide.com/long-straddle.aspx

The stock has to move a certain amount either up or down to be profitable. In the case of GOOG, the cost was $24/ contract. Had the price movement had been less than that, the straddle would have expired worthless.

i might try one on paper for the first time.....i would like to learn these too

[papasloth]

No trades today, but the options fairy will visit over the weekend and take some options positions away.
HPQ Oct 38 Put - Naked short at $1.24 will expire out of the money, net profit $1.24/share
HPQ Oct 39 Put - Naked short at $0.99 will expire out of the money, net profit $0.99/share
AGNC Oct 26 Put - Naked short at $0.45 will expire out of the money, net profit $0.45/share
AGNC Oct 27 Put - Naked short at $0.27 will expire out of the money, net profit $0.27/share
Long AVP at 33.99 with Oct covered 34 Call at $0.76 - In the money, long stock will get called away, net profit $0.77/share. I particularly like this position because I just entered it a few days ago. It's like found money.

Still holding:
HGSI Nov 32 Call - Naked short at $2.95, current market value around $1.33, $1.62 profit
Long SVNT at 22.99 with Nov covered 23 Call at $1.10 - Currently down $1.44 per share on position
SVNT Nov 25 Call - Naked short at $1.46, current market value around $1.04, $0.42 profit

Also holding some long, deep out of the money FAS calls which I bought several months ago as a hedge on a FAS Call short. They're not worth selling now, but if a miracle occurs and FAS skyrockets or we get some volatility in the market, I can re-enter my hedged FAS Call position.

[timber]

i wish i was able to trade options like you guys do....im still stuck with scalping stocks....i did well on appl options the other day though

[brosin]

Real Life - FFR was bullish to .19% from .18%; we are back from the "parachutes on watch" level to the "full steam ahead" level. It will be interesting to see if it holds the gain or even increases even after the red opex.

My FAS took a hit today but still holding strong


Monopoly World - kind of a mixed day here, but ended up gaining nicely and got a little more long on the banks

Big Cap was up 2.1% today, very nice day there mainly thanks to TBT and my SOL short. This includes some very red days in my new buys yesterday in BAC/WFC

-sold my HPQ $42.79 for 5%
-sold 1/2 my TBT $34.30 for 7.7%
-bought some more BAC $12.02
-bought some more WFC $23.79

now 2% cash, 38% short, and 60% long


Scalp trades account did nothing - I am sitting with now a very bad 5.5% unrealized loss on FAS right now; this is way longer than I am supposed to be holding a loss in here. Account -9% on the day.



Options account had a really good day - closed out the $118 spy calls that I avged down on at the close yesterday @ the open .56 for 25%, and then I tried to play for a late day test of 1180 that didn't happen and I purchased a small amount $118 calls that expired worthless. Made 20k/ 13% on the day in there. Turns out I am +6% overall since inception, which is not bad. It was looking alot worse yesterday.



I'm excited for next week ;D

[papasloth]

Timber: I can't speak for anyone else, but for me it's a temperamental thing. I gave up doing the day-trading, stock scalping thing a couple of years ago, because for me it was just too stressful. One day I'd be way up, and the next day I'd lose it all back and more. The swings were keeping me up at night, and the whole thing was too much like playing roulette.

For me, selling options means I can just choose my position, sit back, and collect a nice steady stream of theta as those options decay. If things start to go South a little, I usually have a few days to wait it out or to course correct. I like the idea of collecting a couple of thousand dollars a day in theta just because the market didn't do much of anything at all. On the other hand, my upside is strictly limited. If I sell some puts for $1.50, then I know I'm going to make $1.50 on expiration date as long as the stock price stays above the strike - but I'll never make more than $1.50 on that position. So, I'll never have a rocket ship to the moon, but in exchange I get some nice, fairly steady income, and if I pick my positions well, a fair amount of margin for error. Temperamentally, that works for me and lets me sleep at night. YMMV.

If you really want to try it, run this experiment. Next time you want to buy some stock for $X per share, instead sell some Put options at $X strike price instead. For example, if you wanted to buy 100 shares of XYZ corp at $34.40, instead sell 1 XYZ Put option with a $34.00 strike. When options expiration rolls around, if XYZ is trading above $34.00, your put expires out of the money and you get to keep your premium as a free gift. If XYZ closes below $34.00 per share, you end up owning the same 100 shares of XYZ corp, except you only paid $34 minus your premium per share. So, you did better than you would have if you had merely bought 100 shares of XYZ at $34.40. And, if you still haven't bought the XYZ, you can turn around and sell the next month's XYZ Put option, and repeat the process as needed.

Similarly, if you own 100 shares of XYZ corp, and you want to sell for, say, $35.50, then instead of selling your XYZ, sell 1 XYZ Call option with a $36 strike. If on options expiration, XYZ is below $36, then you get to keep your premium as a free gift. If XYZ closes above $36, then you make the same sale of XYZ stock you would have anyway, except you get $36 plus your premium instead of $35.50. Once again, you did better than if you had merely sold 100 shares of XYZ at $35.50. And, once again, if you haven't sold the XYZ, you can turn around and sell the next month's XYZ call option and repeat the process.

The downside is obvious - you give up control over exactly when you buy and sell the stock. This means that you end up buying the losers and selling the winners. On the other hand, you get a nice tailwind that makes it easier to make a profit on the trade, and you can make money even when the market is going nowhere.

[timber]

thanks papa im going to try that put option thing tomorrow

[timber]

im still pretty good at scalping though now....lol

[papasloth]

Oct 15, 2010 20:19:48 GMT -5 timber said:

im still pretty good at scalping though now....lol

If it ain't broke, don't fix it

[timber]

no i want to learn to trade everything with my eyes closed....so it comes natural like scalping does for me now......i can even trade pennies now and come out ahead

[PoorHomey]

Things looked really ugly early this AM, but somehow I lucked out and received an OPEXopoly Get out of Jail free card.

2 trades - Lost $3 + commission.

Employee Stock holdings up 1.35% for the week - seriously considering duping it prior to earnings (Nov 2)

It was a very close call, but I managed to scratch out an overall gain for the week to reach a new 1,881 week high.

I'm now 129.24% away from my goal

[ask2lern]

Oct 15, 2010 20:10:34 GMT -5 @papasloth said:

Timber: I can't speak for anyone else, but for me it's a temperamental thing. I gave up doing the day-trading, stock scalping thing a couple of years ago, because for me it was just too stressful. One day I'd be way up, and the next day I'd lose it all back and more. The swings were keeping me up at night, and the whole thing was too much like playing roulette.

For me, selling options means I can just choose my position, sit back, and collect a nice steady stream of theta as those options decay. If things start to go South a little, I usually have a few days to wait it out or to course correct. I like the idea of collecting a couple of thousand dollars a day in theta just because the market didn't do much of anything at all. On the other hand, my upside is strictly limited. If I sell some puts for $1.50, then I know I'm going to make $1.50 on expiration date as long as the stock price stays above the strike - but I'll never make more than $1.50 on that position. So, I'll never have a rocket ship to the moon, but in exchange I get some nice, fairly steady income, and if I pick my positions well, a fair amount of margin for error. Temperamentally, that works for me and lets me sleep at night. YMMV.

If you really want to try it, run this experiment. Next time you want to buy some stock for $X per share, instead sell some Put options at $X strike price instead. For example, if you wanted to buy 100 shares of XYZ corp at $34.40, instead sell 1 XYZ Put option with a $34.00 strike. When options expiration rolls around, if XYZ is trading above $34.00, your put expires out of the money and you get to keep your premium as a free gift. If XYZ closes below $34.00 per share, you end up owning the same 100 shares of XYZ corp, except you only paid $34 minus your premium per share. So, you did better than you would have if you had merely bought 100 shares of XYZ at $34.40. And, if you still haven't bought the XYZ, you can turn around and sell the next month's XYZ Put option, and repeat the process as needed.

Similarly, if you own 100 shares of XYZ corp, and you want to sell for, say, $35.50, then instead of selling your XYZ, sell 1 XYZ Call option with a $36 strike. If on options expiration, XYZ is below $36, then you get to keep your premium as a free gift. If XYZ closes above $36, then you make the same sale of XYZ stock you would have anyway, except you get $36 plus your premium instead of $35.50. Once again, you did better than if you had merely sold 100 shares of XYZ at $35.50. And, once again, if you haven't sold the XYZ, you can turn around and sell the next month's XYZ call option and repeat the process.

The downside is obvious - you give up control over exactly when you buy and sell the stock. This means that you end up buying the losers and selling the winners. On the other hand, you get a nice tailwind that makes it easier to make a profit on the trade, and you can make money even when the market is going nowhere.

Good info Exalt...............the only thing I would add is that when you sell naked you have to have the cash available to cover the purchase of the shares and it will tie up margin.............on the XYZ at 34 you would tie up 3400 less the credit amt of the option sale............................GL

[timber]

maybe you guys can teach me about the naked shorting and covered calls then