|
|
Post by cosmic on Oct 27, 2010 15:07:02 GMT -5
Hated today's action lol. I have some SPY 118 puts that at one point were finally in good shape (above 1.12), but as the day wore on, they got eroded even lower than their open. It's amazing how that can happen. It's a very small position and I will get out of it before the end of week because I don't want to fill short SPY. Should have sold at 1.15 like I was thinking. This option transaction is screwed in my opinion. These are Oct 29 expiration.  I'm still holding BAC calls - those are Nov so I'm slightly less worried but I will most likely get screwed on those as well. Very small position.  It never ceases to amaze me how often I can lose on option plays if you don't time it just exactly perfectly. Utterly ridiculous. Thus why I limit each option trade to a very small position because the only REAL option trade in these markets is shorting calls and puts, not going long.  Other than that, no trades today.  Hope everyone made some money today and will do so tomorrow. Members, please post your results along with your RDA of smileys!  |
|
|
|
Post by cosmic on Oct 27, 2010 15:15:54 GMT -5
Just to get an idea of the skullduggery... SPY 118 calls, down .46 SPY 118 puts, down .02 WTF?  ?? If you were big in a straddle, you'd be REALLY upset. As it stands, I'm mildly laughing because this always happens.  |
|
|
|
Post by tajmahal9898 on Oct 27, 2010 15:17:12 GMT -5
cosmic sorry to hear about your option play..
it was a relatively nice day in a long time...
covered short CENX 9K shares at 12.25 for ~12K realized profit
closed BIDU Weekly 115 put option at 3.3 for 3K realized profit (had I waited for one hour, I would have made additional 7K)
Long BIDU weekly 110/115 vertical call at 2.04.. currently up 6K (unrealized)..
additional 5K is tied up on the 115 call side, should be able to get most it back by end of this week.
in brief, realized profit of 15K
unrealized profit of 6K (has potential of 29K if BIDU touches 115 by this friday)
Got very lucky...I was very scared with the long overnight BIDU put position...
|
|
|
|
Post by cosmic on Oct 27, 2010 15:17:39 GMT -5
But the lovely market is red, Dow and SPY.
|
|
|
|
Post by cosmic on Oct 27, 2010 15:19:01 GMT -5
Taj, I just can't get the option trades right, but refuse to go short actual stocks or indexes.
I have so few wins on the options side, either long, short, put, or call, that I'm about to give up on them. The algorithms are just too smart, and I'm too dumb.
|
|
|
|
Post by sp7015 on Oct 27, 2010 15:20:47 GMT -5
Wiffed on my aapl $300 weekly trade. First I held over night cost basis $7.90. Then I left the computer for a moment this morning and they shot up to $10.15. Missed that sell. Held all day and then adveraged down at $7.10.
I figured it would retrace by EOD and it did. Problem is decay started kicking in. At 15:37 I sold all contracts at $7.75 a 3% relized gain. It looked like aapl was going to sell off. The stock then ran and I missed selling the contracts at $8.50 or a 13% gain.
Still holding $310 weekly's as that looks like where the buyers are. My small profit pretty much covers the $310's.
|
|
|
|
Post by cosmic on Oct 27, 2010 15:22:05 GMT -5
It's actually at a point now where the algos are so good at ruining trades with options that buying puts is a completely worthless hedging idea, which is what I mostly use options for. Of course that is by design: You pay for the insurance, but with almost 100% certainty, you will lose on the option trade, and on the long position you were hedging.
|
|
|
|
Post by tajmahal9898 on Oct 27, 2010 15:25:53 GMT -5
Taj, I just can't get the option trades right, but refuse to go short actual stocks or indexes. I have so few wins on the options side, either long, short, put, or call, that I'm about to give up on them. The algorithms are just too smart, and I'm too dumb. No you are not dumb at all.. to the contrary you are one of the smartest people on the board..I just got lucky with last few trades... I am using options to protect my gains for the year.. last 2 months were relatively bad for me.. i just want to protect 2010 gains.. with options (buy or vertical) i know my max loss before entering into a trade.. that's why I have been trading options lately instead of stocks.. just protecting myself till end of the year.. |
|
|
|
Post by Rothschild on Oct 27, 2010 15:41:03 GMT -5
Well I got out of fas during pre-market and lost 1%. Wish I held it though  I was then forced to buy some banking stocks with fas and hopefully I get back that 1% and then some Market is front running Bennies POMO on thursday and hopefully everyone could make some real good money Hope everyone made some money today and will do so tomorrow. |
|
|
|
Post by Rothschild on Oct 27, 2010 15:46:45 GMT -5
It's actually at a point now where the algos are so good at ruining trades with options that buying puts is a completely worthless hedging idea, which is what I mostly use options for. Of course that is by design: You pay for the insurance, but with almost 100% certainty, you will lose on the option trade, and on the long position you were hedging. Cos, The masters of the universe are just too omnipotent. It could take me a lifetime to try to figure them out. Im in my 30s now and its finally beginning to sink in how a select few could control the mass public through financial instruments of all kinds. I got a B.A. in Economics and most of what I learned has been OUTSIDE of the classroom. |
|
|
|
Post by papasloth on Oct 27, 2010 15:57:48 GMT -5
No trades today, but I'm up $33.4K on paper for the day, which for me is a lot of money for one day. The paper gain is almost entirely due to doubling up on SVNT near the bottom and shorting at the money puts, and getting a nice bounce on SVNT today (SVNT +10% or so while DJIA was -.39%).
Cos: When buying or selling options (I almost exclusively sell them), it's all about two metrics: Implied Volatility, or how much Mr. Market thinks the price of the underlying will change, and theta, or the rate of decay in the value of the option as days pass. Mr. Market is a panicky cuss, with more than a touch of manic depression, so he almost always expects the best or the worst. This means Implied Volatility is almost always higher than what the market ends up producing. The "normal case" is that stocks bounce up and down but usually end up around the same place as where they started, while Mr. Market is always expecting stocks to break out to the upside or the downside. That means options are ALMOST ALWAYS over priced relative to their true value. The rare exception to this is when something "unexpected" happens and people are surprised to the upside or downside - in these rare cases, Mr. Market has actually underestimated the best case or worst case, and options were originally under priced.
As days pass, and options approach their expiration, Mr. Market is forced to confront the reality that he was panicking over nothing, and that noting overly good or bad is happening. Even towards the end, Mr. Market keeps telling himself, "sure, it's been three months since anything bad happened, and the options are expiring two days from now, but SOMETHING BAD STILL MIGHT HAPPEN IN THE NEXT TWO DAYS!" So, most of the decay in the value of options (the theta) is loaded towards the options expiration date. That's why longer term options are only somewhat more expensive than shorter term options (in general. This goes out the window when there's a known binary event at a specific date in the future, whose outcome is both important and uncertain. For example, if Mr. Market knows about an FDA decision on a drug two months out, then option which expire this month are probably much cheaper than options which expire after the decision).
So, what do we do with all this? That depends on your temperament. I use it to sell puts and calls where I think Mr. Market has seriously overestimated the best or worst case, and collect the theta. This usually works out, but when Mr. Market is surprised, you can expect to get smashed like a bug (see my recent postings about SVNT for some unexpected news and the aftermath). You can certainly use puts and calls in the "conventional" way, to protect against the downside by going long on puts, or by getting a piece of the upside if a stock moves big by buying calls, but realize that you're almost always paying premiums for the best or worst case, but getting the average case instead.
|
|
|
|
Post by Rich on Oct 27, 2010 15:58:15 GMT -5
Taj, I just can't get the option trades right, but refuse to go short actual stocks or indexes. I have so few wins on the options side, either long, short, put, or call, that I'm about to give up on them. The algorithms are just too smart, and I'm too dumb. No you are not dump at all.. to the contrary you are one of the smartest people on the board..I just got lucky with last few trades... I am using options to protect my gains for the year.. last 2 months were relatively bad for me.. i just want to protect 2010 gains.. with options (buy or vertical) i know my max loss before entering into a trade.. that's why I have been trading options lately instead of stocks.. just protecting myself till end of the year.. Let me add, Cos, options have been terribly difficult these last few months. It's not you. It's them. Also, most of the moves haven't been intraday, they've been gaps. Makes for hard trading. |
|
|
|
Post by brosin on Oct 27, 2010 16:07:36 GMT -5
I've been doing alright with them (options), although every time it has involved multiple (3-5) entries for it to work out.
|
|
|
|
Post by Rothschild on Oct 27, 2010 16:31:47 GMT -5
No trades today, but I'm up $33.4K on paper for the day, which for me is a lot of money for one day. The paper gain is almost entirely due to doubling up on SVNT near the bottom and shorting at the money puts, and getting a nice bounce on SVNT today (SVNT +10% or so while DJIA was -.39%). Cos: When buying or selling options (I almost exclusively sell them), it's all about two metrics: Implied Volatility, or how much Mr. Market thinks the price of the underlying will change, and theta, or the rate of decay in the value of the option as days pass. Mr. Market is a panicky cuss, with more than a touch of manic depression, so he almost always expects the best or the worst. This means Implied Volatility is almost always higher than what the market ends up producing. The "normal case" is that stocks bounce up and down but usually end up around the same place as where they started, while Mr. Market is always expecting stocks to break out to the upside or the downside. That means options are ALMOST ALWAYS over priced relative to their true value. The rare exception to this is when something "unexpected" happens and people are surprised to the upside or downside - in these rare cases, Mr. Market has actually underestimated the best case or worst case, and options were originally under priced. As days pass, and options approach their expiration, Mr. Market is forced to confront the reality that he was panicking over nothing, and that noting overly good or bad is happening. Even towards the end, Mr. Market keeps telling himself, "sure, it's been three months since anything bad happened, and the options are expiring two days from now, but SOMETHING BAD STILL MIGHT HAPPEN IN THE NEXT TWO DAYS!" So, most of the decay in the value of options (the theta) is loaded towards the options expiration date. That's why longer term options are only somewhat more expensive than shorter term options (in general. This goes out the window when there's a known binary event at a specific date in the future, whose outcome is both important and uncertain. For example, if Mr. Market knows about an FDA decision on a drug two months out, then option which expire this month are probably much cheaper than options which expire after the decision). So, what do we do with all this? That depends on your temperament. I use it to sell puts and calls where I think Mr. Market has seriously overestimated the best or worst case, and collect the theta. This usually works out, but when Mr. Market is surprised, you can expect to get smashed like a bug (see my recent postings about SVNT for some unexpected news and the aftermath). You can certainly use puts and calls in the "conventional" way, to protect against the downside by going long on puts, or by getting a piece of the upside if a stock moves big by buying calls, but realize that you're almost always paying premiums for the best or worst case, but getting the average case instead. What a superb explanation! Exalt! |
|
|
|
Post by timber on Oct 27, 2010 16:54:25 GMT -5
i only play aapl or bidu options now after playing other stocks
|
|
|
|
Post by actuarynomore on Oct 27, 2010 16:55:03 GMT -5
Range bound 2 days in a row for my FAS/FAZ trades - Unbelievable - Waiting for much bigger swings either way - Coming soon I believe - The tension is in the air - Somethings gotta happen - Later
|
|
|
|
Post by tajmahal9898 on Oct 27, 2010 16:58:34 GMT -5
Range bound 2 days in a row for my FAS/FAZ trades - Unbelievable - Waiting for much bigger swings either way - Coming soon I believe - The tension is in the air - Somethings gotta happen - Later Hey actuarynomore, please check your inbox.. |
|
|
|
Post by timber on Oct 27, 2010 17:00:11 GMT -5
No trades today, but I'm up $33.4K on paper for the day, which for me is a lot of money for one day. The paper gain is almost entirely due to doubling up on SVNT near the bottom and shorting at the money puts, and getting a nice bounce on SVNT today (SVNT +10% or so while DJIA was -.39%). Cos: When buying or selling options (I almost exclusively sell them), it's all about two metrics: Implied Volatility, or how much Mr. Market thinks the price of the underlying will change, and theta, or the rate of decay in the value of the option as days pass. Mr. Market is a panicky cuss, with more than a touch of manic depression, so he almost always expects the best or the worst. This means Implied Volatility is almost always higher than what the market ends up producing. The "normal case" is that stocks bounce up and down but usually end up around the same place as where they started, while Mr. Market is always expecting stocks to break out to the upside or the downside. That means options are ALMOST ALWAYS over priced relative to their true value. The rare exception to this is when something "unexpected" happens and people are surprised to the upside or downside - in these rare cases, Mr. Market has actually underestimated the best case or worst case, and options were originally under priced. As days pass, and options approach their expiration, Mr. Market is forced to confront the reality that he was panicking over nothing, and that noting overly good or bad is happening. Even towards the end, Mr. Market keeps telling himself, "sure, it's been three months since anything bad happened, and the options are expiring two days from now, but SOMETHING BAD STILL MIGHT HAPPEN IN THE NEXT TWO DAYS!" So, most of the decay in the value of options (the theta) is loaded towards the options expiration date. That's why longer term options are only somewhat more expensive than shorter term options (in general. This goes out the window when there's a known binary event at a specific date in the future, whose outcome is both important and uncertain. For example, if Mr. Market knows about an FDA decision on a drug two months out, then option which expire this month are probably much cheaper than options which expire after the decision). So, what do we do with all this? That depends on your temperament. I use it to sell puts and calls where I think Mr. Market has seriously overestimated the best or worst case, and collect the theta. This usually works out, but when Mr. Market is surprised, you can expect to get smashed like a bug (see my recent postings about SVNT for some unexpected news and the aftermath). You can certainly use puts and calls in the "conventional" way, to protect against the downside by going long on puts, or by getting a piece of the upside if a stock moves big by buying calls, but realize that you're almost always paying premiums for the best or worst case, but getting the average case instead. What a superb explanation! Exalt! papas thebest |
|
|
|
Post by popistoc on Oct 27, 2010 18:20:53 GMT -5
Scalped 70 bucks on TNA, losing money on 175 NFLX puts, went short 50 VVUS and bought TNA again before the close.
GLTA,
popistoc
|
|
|
|
Post by exabi on Oct 27, 2010 18:21:57 GMT -5
Bought some NFLX calls (weekly) at the wrong fng time...glubbing at the moment...will see what tomorrow brings.
|
|
|
|
Post by brosin on Oct 27, 2010 18:55:03 GMT -5
Real Life FFR was level again at .19% - the Fed/market seems pretty comfortable where it is at despite the major run we have seen. That by itself is a good sign, but it still may take a dip this week. I keep expecting (and not seeing) it. My FAS was still blah, but still green so I can't complain. I have enjoyed seeing some of my IRA holdings doing very well recently. RIMM, CYOU, STEC in particular have all popped very strongly recently. Monopoly World tracked in the blog - busy day at work = not much action. That and I didn't see anything other than the accounts getting greener from the morning through EOD... ;D Big Cap - no moves, but saw very strong move especially compared to the market. +3.1% today, back up to a 9% lead over the market  I am 71% long - if you notice, only 2 of my 9 holdings are green currently though Scalp Trade Acct - no moves, holding CHK -3.3% and FAS -1.2%, acct +1% on the day Options Acct - very good day just above +25%, but all unrealized Added to SPY $117 weekly calls from past 2 days $1.29, $1.38, $1.15 x2 - avg $1.43, unrealized 10% gain on them so far. All in All, accts +6% today
|
|
|
|
Post by kbk3ck on Oct 27, 2010 18:58:32 GMT -5
Just watched my acct spiral down and down. Then looked in later and saw it came back and I was green by $128!! LOL
|
|
|
|
Post by PoorHomey on Oct 27, 2010 20:23:33 GMT -5
No trades today as I was far too busy at work praying, obtaining whispered gossipy intelligence reports from colleagues in other facilities, and watching my career flash before my very eyes. They lay-off axe was swung violently, without warning, and with no apparent regard to seniority, skills, or on the job performance. While I somehow managed to emerge from today's melee unscathed, there were many folks far more talented, devoted, and valuable to the company than myself were not as lucky. I feel like taking tomorrow off for bereavement. |
|
|
|
Post by kbk3ck on Oct 27, 2010 20:32:18 GMT -5
Man those bastards you work for SUCK!!! Hope your not self employed.
Glad to hear you made the cut.
|
|
|
|
Post by sp7015 on Oct 27, 2010 20:40:08 GMT -5
i only play aapl or bidu options now after playing other stocks I will have to look at the bidu weekly's. It seems that no one is willing to pay up for the aapl weekly's anymore and decay is kicking in big time. |
|
|
|
Post by PoorHomey on Oct 27, 2010 21:23:50 GMT -5
Man those bastards you work for SUCK!!! Hope your not self employed. Glad to hear you made the cut. I'm in the IT/Infrastructure division of a large company (23k+ employees) I may be "safe" in the short term, but I'm painfully aware of the fact that long-term I can't expect to compete with IBM Brazil/Bangalore/Mumbai. Guess it's time to learn a new skill. |
|
Ras
Commodities Trader
Posts: 239
|
Post by Ras on Oct 27, 2010 21:49:58 GMT -5
closed BIDU Weekly 115 put option at 3.3 for 3K realized profit (had I waited for one hour, I would have made additional 7K)
I left some 15k on that same trade, but it had started coming back up and I figured my luck hasn't been the greatest, so took my profits. The best would have been when I almost pulled trigger on NFLX 180 puts around at 2.50. They went all the way up to 6.25. The spread was too big and it takes forever to place an order with my brokerage service/work computer/work net. It's hard to buy options at your price when the stock is moving violently unless you have placed an order early on and it hits. |
|
jn1520
Broker/Dealer
Posts: 719
|
Post by jn1520 on Oct 28, 2010 7:05:42 GMT -5
Relatively quiet day for me. I did re-load by averaging down on AVNR. Picked up another 800 shares at $2.75
|
|
I was then forced to buy some banking stocks with fas and hopefully I get back that 1% and then some 
