Buy the Dec 145/135 put spread for $2.80
pretty straight forward with a bearish thesis he is buying a put spread ahead of earnings. i dont follow retailers so cant offer up an alternative. see all of Enis's on-air trades in this spreadsheet
Sunday, October 28, 2012
$RL Options Action trade - Enis
26 oct - Enis on the desk this week trying to break his Options Action cherry with a winning trade. been all bricks so far, heres the video clip RL clip , has a bearish trade on RL
Buy the Dec 145/135 put spread for $2.80
pretty straight forward with a bearish thesis he is buying a put spread ahead of earnings. i dont follow retailers so cant offer up an alternative. see all of Enis's on-air trades in this spreadsheet
Buy the Dec 145/135 put spread for $2.80
pretty straight forward with a bearish thesis he is buying a put spread ahead of earnings. i dont follow retailers so cant offer up an alternative. see all of Enis's on-air trades in this spreadsheet
$AAPL Options action trade - mike
26 oct - mike with a ratio spread to recoup a loss on aaple, heres the video aapl clip . first off as you know from following me, what melissa says is incorrect, "since you are short that extra call you should always do this against stock" ..wrong... you can do this if you have an ITM call also. most viewers are not going to buy a couple hundred shares of aaple. you CAN do this ratio naked if you want but keep in mind that it will require margin because of that second short call...just like when you do a ratio PUT spread...you need margin because of that extra short put...check with your broker on how much margin you need
DEC 600 / 630 call ratio spread (buy one 600 / sell two 630 calls) for $2.00 credit
as usual i prefer to not go out that far on ratio spreads, i would do a Nov ratio spread first.. then do a DEC after Nov expires. historically the issues i have with ratio spreads is i dont take the strikes up high enough, in other words i am right but the stock takes off and goes through the upper strike. mikes is already a bit in the money, if sticking with the DEC options i would look at the 610/640 spread or the 620/650 ..for a move into holidays i would lean towards a thesis that stock moves higher than expected. BUT FIRST, i would do a NOV 605/625 ratio spread for flat.. profit range on that is 605-645.. if its at 645 or higher at Nov opex then reevaluate what levels look good for dec. you need that time decay to chip away at the short calls for ratios to work in your favor so if you go to Dec right away a short term up move will look like a loss until the time decay kicks in vs being able to profit via a Nov ratio spread. dont misinterpret mikes comments that come Dec opex you are out of the stock.. you dont have to sell the underlying..just keep trading these ratio spreads every month instead. you can have a nice income stream every month on just trading ratio spreads , especially if against multiple DITM Leaps like me. say mike gets that 630 pin and pockets a cool $3000...do it again for the next month, mentally lower your cost basis of the stock or Leaps underlying. lots of ways to chop down that money tree. and of course the overemphasizing talk of being "called away" at 660.. tell you what.. at 660 you are closing this ratio for zero, your stock at gained 60 points, and you are looking for another options way to bring in more coin..not selling and walking away... dont you think it will move higher if it moved from 600 to 660 by christmas? see all of mikes on-air trades in this spreadsheet
DEC 600 / 630 call ratio spread (buy one 600 / sell two 630 calls) for $2.00 credit
as usual i prefer to not go out that far on ratio spreads, i would do a Nov ratio spread first.. then do a DEC after Nov expires. historically the issues i have with ratio spreads is i dont take the strikes up high enough, in other words i am right but the stock takes off and goes through the upper strike. mikes is already a bit in the money, if sticking with the DEC options i would look at the 610/640 spread or the 620/650 ..for a move into holidays i would lean towards a thesis that stock moves higher than expected. BUT FIRST, i would do a NOV 605/625 ratio spread for flat.. profit range on that is 605-645.. if its at 645 or higher at Nov opex then reevaluate what levels look good for dec. you need that time decay to chip away at the short calls for ratios to work in your favor so if you go to Dec right away a short term up move will look like a loss until the time decay kicks in vs being able to profit via a Nov ratio spread. dont misinterpret mikes comments that come Dec opex you are out of the stock.. you dont have to sell the underlying..just keep trading these ratio spreads every month instead. you can have a nice income stream every month on just trading ratio spreads , especially if against multiple DITM Leaps like me. say mike gets that 630 pin and pockets a cool $3000...do it again for the next month, mentally lower your cost basis of the stock or Leaps underlying. lots of ways to chop down that money tree. and of course the overemphasizing talk of being "called away" at 660.. tell you what.. at 660 you are closing this ratio for zero, your stock at gained 60 points, and you are looking for another options way to bring in more coin..not selling and walking away... dont you think it will move higher if it moved from 600 to 660 by christmas? see all of mikes on-air trades in this spreadsheet
$GOOG Options Action trade - scott
26 oct - scott on the web extra talking a trade repair for a viewer, here is the clip web extra . a good example of what not to do is what this viewer did, bought Nov 650 calls for $107 ($10700 each) ahead of earnings. not many expected this big down move but when entering a DITM call like that its alway better to go out way into the future in case your thesis is wrong. gives you more time to use other strategies to make some money back. like scotts ratio spread or weekly / monthly calenders. see by buying a front month call this viewers $21000 position is worth $6600 now, going to be difficult to recoup alot of that money in the 3 weeks till opex.. not a good position to be in.
second, viewer committed huge amount of capital to make a bullish trade, sure if stock moves up then youre a hero. like i always say, if you are going to guess on a direction, then guess cheap... calenders , wide call flys would have been my method.. as a minimum sell some of those juiced up weekly OTM calls at least to reduce the cost basis and make it a calender spread. good example of how to blow out your account..not any risk managment that i can see.
but on to the trade.. in order to make back some of the money scott recommending the :
Nov 680/700 call ratio spread (buy one 680 / sell two 700's) for .50 credit
i like the trade setup, but be clear that even if the stock magically pins at 700 to get the max profit of $4000 for the viewer plus the $10000 that the call options will be worth, it will still be a big loser... so best case viewer is down only $8000 vs current $13000 . cnbc does the usual over emphasizing of that your stock "will be called away" at the 700 level.. thats only if you dont do anything and just let this ratio spread go into opex instead of doing what 99% of traders will do and close it out for a profit. tough spot to be in...tails i lose big, heads i lose really big. scott also adds he is not a fan of buying DITM calls because it makes you long the stock..lets see how long it will be before he says the opposite thing . but for scotts spreadsheet / track record it will be good since the only way this ratio spread can "lose" money is if stock is above 720 on Nov opex. see all of scotts on-air trades in this spreadsheet
the other thing about ratio spreads..you dont have to wait for your long postion to lose money to put it on..you can initiate a new long position right now with stock or DITM calls AND ALSO put on a ratio spread at the same time and get a double leveraged upside position with no added buying power needed..so if monday you decided to go long you could add this ratio on top of it for free..free trades are good.
second, viewer committed huge amount of capital to make a bullish trade, sure if stock moves up then youre a hero. like i always say, if you are going to guess on a direction, then guess cheap... calenders , wide call flys would have been my method.. as a minimum sell some of those juiced up weekly OTM calls at least to reduce the cost basis and make it a calender spread. good example of how to blow out your account..not any risk managment that i can see.
but on to the trade.. in order to make back some of the money scott recommending the :
Nov 680/700 call ratio spread (buy one 680 / sell two 700's) for .50 credit
i like the trade setup, but be clear that even if the stock magically pins at 700 to get the max profit of $4000 for the viewer plus the $10000 that the call options will be worth, it will still be a big loser... so best case viewer is down only $8000 vs current $13000 . cnbc does the usual over emphasizing of that your stock "will be called away" at the 700 level.. thats only if you dont do anything and just let this ratio spread go into opex instead of doing what 99% of traders will do and close it out for a profit. tough spot to be in...tails i lose big, heads i lose really big. scott also adds he is not a fan of buying DITM calls because it makes you long the stock..lets see how long it will be before he says the opposite thing . but for scotts spreadsheet / track record it will be good since the only way this ratio spread can "lose" money is if stock is above 720 on Nov opex. see all of scotts on-air trades in this spreadsheet
the other thing about ratio spreads..you dont have to wait for your long postion to lose money to put it on..you can initiate a new long position right now with stock or DITM calls AND ALSO put on a ratio spread at the same time and get a double leveraged upside position with no added buying power needed..so if monday you decided to go long you could add this ratio on top of it for free..free trades are good.
Sunday, October 21, 2012
$LLY Options Action Web Extra trade - scott
19 oct - scott with the web extra trade for a viewer tweet today, heres the video clip LLY clip
Buy the Jan 52.50 / 47 put spread for $1.50
i dont follow the stock but i like the trade setup, when i do put spreads i want to participate right away in the move..not need the stock to fall 10% first and then my spread kicks in.. i would prefer to pick a nearer month than Jan though instead of going that far out. see all of scotts on-air trades in this spreadsheet
Buy the Jan 52.50 / 47 put spread for $1.50
i dont follow the stock but i like the trade setup, when i do put spreads i want to participate right away in the move..not need the stock to fall 10% first and then my spread kicks in.. i would prefer to pick a nearer month than Jan though instead of going that far out. see all of scotts on-air trades in this spreadsheet
update to - $UPS Options Action trade - mike
26 oct - mike with a semi-update on the "final call" segment of the show today, heres the clip final call clip . that little bit of decay he references means that his .85 cent Put is now worth .39.. as in a 50% loss.. but hes staying with it.. hope hes turning over a new leaf on the use of the twitter handle to update trades.
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19 oct - pretty simple trade by mike on UPS, heres the video clip UPS clip
Buy the Nov 70 put for .85
thesis seems good. i guess if you want to take a shot its not much capital to outlay, but you need a move down to 69.15 at opex to be breakeven.. i dont follow the stock to make a suggestion. you dont have to trade everything. i got a kick out of scotts comments how he doesnt like selling a "dollar cheap option" to make it a spread.. noticed he didnt have a problem with it when mike did the BAC 9/10 call spread where the 10 call was a nickel. see all of mikes on - air trades in this spreadsheet
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19 oct - pretty simple trade by mike on UPS, heres the video clip UPS clip
Buy the Nov 70 put for .85
thesis seems good. i guess if you want to take a shot its not much capital to outlay, but you need a move down to 69.15 at opex to be breakeven.. i dont follow the stock to make a suggestion. you dont have to trade everything. i got a kick out of scotts comments how he doesnt like selling a "dollar cheap option" to make it a spread.. noticed he didnt have a problem with it when mike did the BAC 9/10 call spread where the 10 call was a nickel. see all of mikes on - air trades in this spreadsheet
CLOSING the $AMZN Options Action trade - dan
26oct - desk revisiting a trade that dan already closed .. as in closing the barn door after the horses are gone, here is the video clip AMZN clip . per dans tweet / post on oct 25: risk reversal:
Action: AMZN ($228) Sold to Close half Nov 230/210 Put Spread at 7.50 for a $2.65 gain.
and again later in the day:
dan got his move before earning came out and does some nice trade management, he actually rolled this into another trade but for the purpose of his on-air trades i will just count this spread. got a good 50% winner by exiting before earnings and not pushing his luck. see all of dans on-air trades in this spreadsheet
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19 oct - dan nathan with a bearish trade on AMZN today, heres the video clip AMZN clip
Buy the Nov 230/210 put spread for $5.00
good trade setup based on his thesis that stock is going lower, defines the risk. earnings are on thursday.. my usual comments about an "earnings"play.. are to enter this trade the day of earnings or day prior and base your strikes on where it is then..stock could rally 30 points by then and now this put spread might not be positioned where you want it come earnings.. the IV for weeklies will keep creeping higher right up to earnings but as of today the options are pricing in about a 20 point move. so if you thesis is lower that puts it near 220.. i agree with the desks bearish view but dont want to commit $500 for a trade..the other high flyers seem to be moving more than implied so im going to look at some put calenders on thursday..right now targeting the 210 or 215 level..those look to be going for about a buck. compare the payout ratios to a put spread. the 215 calender gets you a 8 to 1 ratio if you can nail a 215 pin, which is also near some support and the 200 day... if thesis is right and you commit that same $500 into 5 put calender you triple the payout..so less capital to commit and better payout..if thesis is right..will look at that on thursday. see all of dans on-air trade in this google docs spreadsheet
Action: AMZN ($228) Sold to Close half Nov 230/210 Put Spread at 7.50 for a $2.65 gain.
and again later in the day:
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19 oct - dan nathan with a bearish trade on AMZN today, heres the video clip AMZN clip
Buy the Nov 230/210 put spread for $5.00
good trade setup based on his thesis that stock is going lower, defines the risk. earnings are on thursday.. my usual comments about an "earnings"play.. are to enter this trade the day of earnings or day prior and base your strikes on where it is then..stock could rally 30 points by then and now this put spread might not be positioned where you want it come earnings.. the IV for weeklies will keep creeping higher right up to earnings but as of today the options are pricing in about a 20 point move. so if you thesis is lower that puts it near 220.. i agree with the desks bearish view but dont want to commit $500 for a trade..the other high flyers seem to be moving more than implied so im going to look at some put calenders on thursday..right now targeting the 210 or 215 level..those look to be going for about a buck. compare the payout ratios to a put spread. the 215 calender gets you a 8 to 1 ratio if you can nail a 215 pin, which is also near some support and the 200 day... if thesis is right and you commit that same $500 into 5 put calender you triple the payout..so less capital to commit and better payout..if thesis is right..will look at that on thursday. see all of dans on-air trade in this google docs spreadsheet
Sunday, October 14, 2012
$EBAY Options Action trade - mike
12 oct - mike with a trade on ebay for earnings which look to be on wednesday, heres the video clip EBAY clip
Buy the Jan 50/55 call spread for 1.40
as melissa points out mikes lack of enthusiasm , i doubt he is doing this trade for real. but an ok trade, defines the risk, goes out a few months. dan makes some good points about volititity.. in his GS trade in the same show he said GS vol was "pumped" with only a 6point spreads.. in this case its accurate with oct IV near 65 and Nov near 34. so he mentioned a calender spread instead.. i might be looking at that myself on wednesday.. the options right this second with stock at 47ish are pricing in about at 3dollar move on earnings.. that gets you to near 50.. so will be looking at the 50 oct/nov call calender which are going for near .50 cents.. so really if you had that cash to commit to a trade.. the 1.40 per lot for mikes trade.. you could commit nearly the same amount and get three calender spreads instead . the risk/reward per trademonster analyse tab on the calenders are 1 to 2.62. the idea being if stock moves towards 50 the Oct call decays rapidly and much more than the Nov 50 giving you a profit. see all of mikes on-air trades in this google docs spreadsheet
Buy the Jan 50/55 call spread for 1.40
as melissa points out mikes lack of enthusiasm , i doubt he is doing this trade for real. but an ok trade, defines the risk, goes out a few months. dan makes some good points about volititity.. in his GS trade in the same show he said GS vol was "pumped" with only a 6point spreads.. in this case its accurate with oct IV near 65 and Nov near 34. so he mentioned a calender spread instead.. i might be looking at that myself on wednesday.. the options right this second with stock at 47ish are pricing in about at 3dollar move on earnings.. that gets you to near 50.. so will be looking at the 50 oct/nov call calender which are going for near .50 cents.. so really if you had that cash to commit to a trade.. the 1.40 per lot for mikes trade.. you could commit nearly the same amount and get three calender spreads instead . the risk/reward per trademonster analyse tab on the calenders are 1 to 2.62. the idea being if stock moves towards 50 the Oct call decays rapidly and much more than the Nov 50 giving you a profit. see all of mikes on-air trades in this google docs spreadsheet
Saturday, October 13, 2012
$ANR Options Action trade - scott
12 oct - sure wish Options Action could be a little more headsup on their stock pricing for their graphics, in the web extra today, scott nations as usual making a recommendation for a viewer on ANR. in their chart they show the weekly chart and a monthly chart with a price of $8.55 but if you look at the price range per freestockcharts.com, the friday range was 8.42-7.55 with a closing at 7.89 ... thats a 10% difference . heres the video clip web extra
Buy the Dec 8/6 put spread for .70
i dont know if they recorded this hit on thursday when stock was actually 8.55 or if they are not paying attention but it smacks of fishiness. cant update the graphics right before airing? so this put spread is going for 10% higher now.. not a huge amount but in the interest of transparancy i would like to see or hear some comment like "when i looked at the stock on thursday" or "when the stock was trading at 8.55, you can get this put spread for .70" vs hindsight trading or taped delayed trades.
regardless, scott makes a good case for why to buy a put spread vs selling a call spread. im not in the coal space so i dont follow this name. my beef is with the lack of attention to detail.. can be misleading if you dont pay attention. see all of scotts on-air trades in this google docs spreadsheet
Buy the Dec 8/6 put spread for .70
i dont know if they recorded this hit on thursday when stock was actually 8.55 or if they are not paying attention but it smacks of fishiness. cant update the graphics right before airing? so this put spread is going for 10% higher now.. not a huge amount but in the interest of transparancy i would like to see or hear some comment like "when i looked at the stock on thursday" or "when the stock was trading at 8.55, you can get this put spread for .70" vs hindsight trading or taped delayed trades.
regardless, scott makes a good case for why to buy a put spread vs selling a call spread. im not in the coal space so i dont follow this name. my beef is with the lack of attention to detail.. can be misleading if you dont pay attention. see all of scotts on-air trades in this google docs spreadsheet
Friday, October 12, 2012
update to $GS Options Action trade - dan
23 oct - as dan tweeted and posted at www.riskreversal.com :
so as you can figure out..he initially committed $1.40 to this trade, the Oct put expired worthless and now selling a Nov Put to further reduce his cost basis to .65, still needing a down move to get a profit.
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19 oct - show revisiting this trade., heres the video clip tonights GS clip . dan again reiterates what he plans to do by selling a lower put to leg into a spread, going to need a down move to make that worthwhile. Scott again comes off as being confused about calender spread trades, as if he doesnt know about capturing the elevated front month premium.. because the stock moved in the opposite direction of the thesis does not make scott correct.. his explaination is what i have issue with. as you can see below i didnt like the trade either but mainly because of the poor payout ratio and that the stock did not actually have a "pumped" IV like dan said.. pass on those low IV calenders
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12 oct - dan with a put calender on GS for earnings, here is the video clip GS clip . first off, dan says the Oct options IV is elevated, they are "pumped" . lets see, per trademonster, the oct options have 32 iv vs Nov 26... elevated yes, Pumped no.. i would not call a 6 point difference "pumped" .
Buy the Oct / Nov 115 put calender for $1.40 per lot (sell the Oct 115, buy the Nov 115)
dan lays out his strategy of what he wants to happen and what he plans to do. the best part is when scott nations opens his mouth and really gets taking to school by dan and mike. really makes himself look amatuer with comment. traders enter calender spreads to take advantage of the IV difference, not to double thread the needle at one opex and then the other. a classic beatdown. if you look at the options pricing right now, about a $4.50 move is getting priced in. if thats accurate it will take stock right to dans optimum strike. reservation i have is that since the IV difference is only 6 points, even a near perfect pin gets you only about a 50% gain per trademonster analyse tab..in other words not a high enough payout ratio. about a 1:1.63 ratio. ill pass for something juicer. see all of dans on-air trades in this google docs spreadsheet
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19 oct - show revisiting this trade., heres the video clip tonights GS clip . dan again reiterates what he plans to do by selling a lower put to leg into a spread, going to need a down move to make that worthwhile. Scott again comes off as being confused about calender spread trades, as if he doesnt know about capturing the elevated front month premium.. because the stock moved in the opposite direction of the thesis does not make scott correct.. his explaination is what i have issue with. as you can see below i didnt like the trade either but mainly because of the poor payout ratio and that the stock did not actually have a "pumped" IV like dan said.. pass on those low IV calenders
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12 oct - dan with a put calender on GS for earnings, here is the video clip GS clip . first off, dan says the Oct options IV is elevated, they are "pumped" . lets see, per trademonster, the oct options have 32 iv vs Nov 26... elevated yes, Pumped no.. i would not call a 6 point difference "pumped" .
Buy the Oct / Nov 115 put calender for $1.40 per lot (sell the Oct 115, buy the Nov 115)
dan lays out his strategy of what he wants to happen and what he plans to do. the best part is when scott nations opens his mouth and really gets taking to school by dan and mike. really makes himself look amatuer with comment. traders enter calender spreads to take advantage of the IV difference, not to double thread the needle at one opex and then the other. a classic beatdown. if you look at the options pricing right now, about a $4.50 move is getting priced in. if thats accurate it will take stock right to dans optimum strike. reservation i have is that since the IV difference is only 6 points, even a near perfect pin gets you only about a 50% gain per trademonster analyse tab..in other words not a high enough payout ratio. about a 1:1.63 ratio. ill pass for something juicer. see all of dans on-air trades in this google docs spreadsheet
Monday, October 8, 2012
update to the $JPM Options Action trade - dan
22 oct - dan making an adjustment to this trade per his tweet/ posting:
Buy the Oct/Nov 41 put calender (sell the Oct 41, buy the Nov 41puts) for .50
dans on-air trades
3:35 pm EDT - October 22, 2012 By
Trade Update Oct 22nd, 2012: With Oct expiration come and gone, the Oct 41 Puts that I was short expired worthless, and I am left long the Nov 41 Puts, for .48, the price I paid for the calendar.
JPM is noticeably weaker today than its money-center peers BAC and C, which is likely a continuation of a rotation into C since its Q3 earnings last Monday and CEO change last Tuesday.
I am now going to spread the Puts that I own and reduce my premium risk and break-even level, but cap my potential gains.
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Break-Even on Nov Exp: my original cost for Calendar was .48, less the .42 I received for selling the Nov 40 Puts, so my Max Risk is .06, my Max Gain is .94 if the stock is 40 or below on Nov Expiration.
5 oct - again a short post, dan with a put calender on JPM with earnings friday. note what he says in this clip, that he will do this trade in earnest later in the week. he also featured this trade on his website, i got the impression he already put it on, i might be wrong but just note his on-air comment. JPM segment and end of this clipJPM is noticeably weaker today than its money-center peers BAC and C, which is likely a continuation of a rotation into C since its Q3 earnings last Monday and CEO change last Tuesday.
I am now going to spread the Puts that I own and reduce my premium risk and break-even level, but cap my potential gains.
Action: Sold to Open JPM ($41.80) Nov 40 Puts at .42
New Position: Long JPM Nov 41/40 Put Spread for .06
again a good job of managing this position, now his cost basis is six cents..thats the max loss he can now have.----------------------------------------------------------------------------------------------------------------------------
Break-Even on Nov Exp: my original cost for Calendar was .48, less the .42 I received for selling the Nov 40 Puts, so my Max Risk is .06, my Max Gain is .94 if the stock is 40 or below on Nov Expiration.
Buy the Oct/Nov 41 put calender (sell the Oct 41, buy the Nov 41puts) for .50
dans on-air trades
update to $VLO Options Action trade - mike
26 oct - mike again with a tweet to update a trade adjustment, this Dec 36 call is going for .14 now so huge loser so far with 2 months to go, per mike:
5oct - a bit late posting this so will keep it brief, mike with a simple buy upside call strategy on VLO, heres the video VLO clip
buy the Dec 36 call for .95
mikes on-air trades in google docs spreadsheet
Also converting the VLO into a risk reversal, selling the Dec 27 puts @ 1.05, stk has come in significantly.
if stock stays above 27 at opex it will salvage the position for small profit at least. note that now you have to commit margin/buying power to cover these short puts which are getting put on to salvage a defined risk call purchase. (adding risk to position)
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5oct - a bit late posting this so will keep it brief, mike with a simple buy upside call strategy on VLO, heres the video VLO clip
buy the Dec 36 call for .95
mikes on-air trades in google docs spreadsheet
Friday, October 5, 2012
$AAPL Options Action web extra trade - scott
5 oct - this might be one of the goofiest trades yet.. goofy because of what scott is saying in his description, heres the web extra clip AAPL clip . viewer in a nutshell is worried about his aaple stock and thinks he should sell and instead buy a July 2013 660 call (which is going for about $7400) .. lets make an assumption that Joe Viewer has 100shares . Instead, scott recommends to:
Buy the Jan 700 call for $30 ($3000)
What gets me is the phrase that by buying this call "i am protected to the downside if AAPL continues to fall".. how is that exactly? your $3000 goes down as apple continues to fall... saying you only spent $3000 on an option vs owning the stock and it goes down does not equal protection.. you just lost less. "but has to rally a bit before i get to participate again" he says next.. so thats the position you want to put yourself in ?? you think the stock is going down so you buy a call and it will still lose money and then you need it to rally a bit? seems really bass akwards thinking to me. how about this... since mr. viewer is worried about the downside.. keep the stock and instead do a put spread collar.. the Nov 675 / 650/590 collar . as in sell the Nov 675 call for about $20, then use that cash to buy the Nov 650/590 put spread for about $20.. so zero cost to get you $60 of downside protection...thats what i think of when i hear "im protected to the downside". also gives you $25 more upside potential. the thing is i think scotts trade will make money but im not buying the explanation..would use that $3000 and buy call spreads closer to ATM instead.see all of scotts on air trades in this google docs spreadsheet
click-->Follow @Mark_Lexus to follow on twitter
Buy the Jan 700 call for $30 ($3000)
What gets me is the phrase that by buying this call "i am protected to the downside if AAPL continues to fall".. how is that exactly? your $3000 goes down as apple continues to fall... saying you only spent $3000 on an option vs owning the stock and it goes down does not equal protection.. you just lost less. "but has to rally a bit before i get to participate again" he says next.. so thats the position you want to put yourself in ?? you think the stock is going down so you buy a call and it will still lose money and then you need it to rally a bit? seems really bass akwards thinking to me. how about this... since mr. viewer is worried about the downside.. keep the stock and instead do a put spread collar.. the Nov 675 / 650/590 collar . as in sell the Nov 675 call for about $20, then use that cash to buy the Nov 650/590 put spread for about $20.. so zero cost to get you $60 of downside protection...thats what i think of when i hear "im protected to the downside". also gives you $25 more upside potential. the thing is i think scotts trade will make money but im not buying the explanation..would use that $3000 and buy call spreads closer to ATM instead.see all of scotts on air trades in this google docs spreadsheet
click-->Follow @Mark_Lexus to follow on twitter
Monday, October 1, 2012
$FB Options Action trade - dan
28 sep - if you read dans write up on his website on this trade you will see he mentioned that he is not buying the stock here to do this trade. that was not made too clear in the Facebook clip . so like i said before, just because you see it on air does not mean there is money behind it.. so its a bit deceiving when he says "i bought this and i sold that"
Buy the Jan 24/27 call ratio for zero (buy one 24, sell two 27's)
I like ratio spreads, they have a very high probability of being profitable, i prefer to do them in a series of monthly ratios vs going out 3-4 months. this can also be used against an ITM call not just stock. what scott does not do a good job explaining with useless comments of "the options math is against you" is that you will not see those full profits till the Jan opex...since you need the 27short calls to decay, they will more that offset the gain of the 24call in the near term..so be prepared to wait 3 months. see all of dans on-air trades in this google docs spreadsheet
click-->Follow @Mark_Lexus to follow on twitter
Buy the Jan 24/27 call ratio for zero (buy one 24, sell two 27's)
I like ratio spreads, they have a very high probability of being profitable, i prefer to do them in a series of monthly ratios vs going out 3-4 months. this can also be used against an ITM call not just stock. what scott does not do a good job explaining with useless comments of "the options math is against you" is that you will not see those full profits till the Jan opex...since you need the 27short calls to decay, they will more that offset the gain of the 24call in the near term..so be prepared to wait 3 months. see all of dans on-air trades in this google docs spreadsheet
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update to $HAL Options Action trade - mike
26 oct - been about a month since the trade was featured on -air and blamm, out of the blue a mike khouw tweet about a trade adjustment. first off, the Jan37 call is going for about .40 now.. so 60% loss so far with several months to go for opex.. per mikes tweet:
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28 sep - on the show on friday mike khouw and carter worth again for a trade, heres the clip HAL clip . a discrepency on this trade..mike SAYS to buy the Jan 36 call, so does the transcript, but the graphic shows the jan37 call.. when i looked at the options prices after hours...the pricing lines up more with the 37strike so im going with that..just a note, just because a "trade" is featured on the show does not necessarily mean they put their money where their mouth is..i get the feeling based his tone and the phrasing that he did not actually put this trade on.
Buy the Jan 37 call for $1.00
pretty simple trade, bullish thesis, so buying an upside call.. as usual when going out a few months like this i would recommend to make it a calender spread instead to lower your cost basis a bit..not a lot of premium with HAL but right now could sell the Oct 37 for 12 cents...so would lower cost basis 12percent. Easy Peezy. see all of mikes on-air trades in this google docs spreadsheet
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Converting my long HAL call to a risk/reversal by selling Jan 30 puts @ .92.
pretty self explanitory, now selling the Puts to help finance the previously purchased calls. so as long as stock is above 30 at opex the "trade" will only lose 8cents. interesting way to leg into a risk reversal.
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28 sep - on the show on friday mike khouw and carter worth again for a trade, heres the clip HAL clip . a discrepency on this trade..mike SAYS to buy the Jan 36 call, so does the transcript, but the graphic shows the jan37 call.. when i looked at the options prices after hours...the pricing lines up more with the 37strike so im going with that..just a note, just because a "trade" is featured on the show does not necessarily mean they put their money where their mouth is..i get the feeling based his tone and the phrasing that he did not actually put this trade on.
Buy the Jan 37 call for $1.00
pretty simple trade, bullish thesis, so buying an upside call.. as usual when going out a few months like this i would recommend to make it a calender spread instead to lower your cost basis a bit..not a lot of premium with HAL but right now could sell the Oct 37 for 12 cents...so would lower cost basis 12percent. Easy Peezy. see all of mikes on-air trades in this google docs spreadsheet
click-->Follow @Mark_Lexus to follow on twitter
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