not fundamentals, just probabilities… thoughts?
Did you invest?
I sold the 140 puts for 4.38, and have both a long call spread, and a short put spread, with 140 as my maximum gain. Of course it has to expire above 140 on Friday for me to capture everything.
Took off some of it when GS cleared 140. Depending on price action and the rest of the market, I might close it out today if it can’t break the intraday high of 140.70
Yo Lock, what’s the deal with you and GS?
^Nothing bee. I might as well make money off them somehow.
Developed a decent read on their implied vols (stick with current and next month expiries) and average daily ranges, so when the set up is there, I take it robotically, because this piece of sh-t can move suprisingly fast. The price action suits the spread and ratio trades fairly well.
I’m flat now though with tomorrow being expiry. May sell a weekly credit since three day weekend if worthwhile.
Anyways, I think I’m gonna grab a beer at the local, it’s been awhile. Gots cabin fever. Studyin’ too much for this CFA thing. Thursday night is ladies night at the local. 50 cent wings, potato skins, ya know… A lot of well to do good looking young professionals that I get vicarious pleasure out of, and often a laugh, before I walk away with tombstones in my eyes.
Hey lockheed, I like reading the thoughts of an option trader.
Do you recommend any books on option trading? My strengths are not in statistics but maybe I’m ok at timing movements using technical and fundamentals. I’d be looking for a strategy that profits the most based on feeling a 33-50% price movement within say 2-7 months. Like for example recently I made 50% price gain on both RIMM and GNW. What’s the best options move for calling bottoms?
Another recent example would be my 2nd attempt at options. Two weeks ago I picked up some SNE 11 Jul calls. Seem liked a good deal because I’m bullish and break-even was like 12 and I get 6 months. But then I noticed I could get the Jan2014 10 call for almost the same BE and capital was only like $1 more. So now I feel like a dumbass. I’m thinking maybe if things go well SNE reaches $16 by June. Going back two weeks ago, what would be the best way to play this bottom? And just to clarify, when I say bottom I’m of course referring to stocks, not homosexuals.
I’ll get back to you DBS on your SNE.
But a good book to start with is Natenburg’s Option Volatiltiy and Pricing. Dry as hell. But a good read. Like, the book of Job, dry as hell, but a good read.
cool thanks lockheed I’ll check it out
When I read your posts Lock, I feel like I’m just barely starting to understand a second language lol
Yo lockheed, do you trade more or less exclusively in options or throw a bunch of stocks in there too?
If I have enough capital for the position, and it’s worth it, sometimes I’ll hedge with the underlier if I’m really risk averse and the vols are extreme, and I don’t really want to look at it for a while as a whole. But usually, don’t have enough capital to make delta/gamma hedging worth it via trading the actual stock too.
I do have long positions that I’ve been sitting on for years that I occasionally write calls against, but the only one that I found it worth doing that too recently is Caterpillar, the rest of my long portfolio not enough premium and not enough shares.
As for just purely trading stock with no options, yeah, I’ll do that, but I have to close out the position intraday.
I just checked out that Natenburg book… its published in 1994, wouldn’t you say that’s kind of out of date by now?
No, that’s the thing, the Natenburg book is not out of date. Many books go out of date, but Natenburg still holds true. If you just get a grasp for volatility, that’s not going to change with the years or with technology or human progress, volatility is a double edge sword, so its essence remains.