Options Strategy (Archive)

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    Posted: 08 September 2011 10:42 PM #61

    Mav - 09 September 2011 01:31 AM

    So if it’s a whipsaw, you watch for it and try to sell both at a gain, then.

    Exactly.  I’ll have a better idea in the morning with the news and futures and premarket (gap up or down?) what approach I’ll take…closing live with market orders, or setting limit orders, or trailing stops or whatnot.

         
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    Posted: 08 September 2011 11:15 PM #62

    Max pain for this week is $380 as of tonight?s OI data. The highest put OI is the $380 strike. The highest call OI is the $390 strike.

    So if AAPL closes above $380, it may close near $390; if below $380, it may close near $380. Check back after the market close Friday.

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    Posted: 09 September 2011 01:35 AM #63

    Apple II+ - 06 September 2011 03:52 PM

    From the intraday thread:

    Mercel - 06 September 2011 06:15 AM

    In the “we can dream” vein, Travis over at Max. Pain fame is giving AAPL a 98% probability that it trades between $395 - $435 as of Sept. 2, 2011 for Sept. 16 options.  What am I missing here, aside from the fact it will likely be updated tomorrow?

    http://www.aaplpain.com/Site/Aapl_Pain_Sep.html

    He’s reporting the strikes with the highest open interest, because his table of the past 62 weeks shows 80% of the time AAPL has finished the week between the strike with the highest put OI and the strike with the highest call OI. Recent history has brought this percentage down from 86% to 80%. Expanding the range by one strike on both ends raised it to 98% of the time, but Travis may need to update his site because I think recent history has actually brought this down to 95%.

    But September monthly has one weird aspect to it—max pain is $390 which is below both the 80% and 95% ranges. Although Travis doesn’t post the actual max pain number, it’s usually within the range. FWIW.

    The two highest OI puts and calls for September are the $395 and $400 puts and the $430 and $435 calls with the vast majority opened at the same times over two days, July 26 and 27. Could be a big iron condor play.

    The next highest puts and the nearly next highest calls (except for the $400 calls) are the $385 and $390 puts and the $420 and $425 calls, most of which were likewise opened at the same times over two days, July 25 and 27. This also looks like a big iron condor play.

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    The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. — Steve Jobs

         
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    Posted: 09 September 2011 01:54 PM #64

    It is great to be able to figure out the market if only one in a great while.

    ARMH - sold at approx 20% gain.

    YHOO - sold at a little over 10% gain.

    See iPad - I do understand Puts 101, kinda.

    AAPL?  Haha only doing worse today.  For now, I’ll grab every sprig of parsley I can by trading volatility.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 09 September 2011 04:44 PM #65

    Hmm.  Maybe I’ll keep up my “diversification” theme with some Oct 11 DIS calls today, depending on how the market is in a few minutes.  Hate being burned by last-minute price free-falls.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 09 September 2011 05:37 PM #66

    Today I sold Weekly $365/$370 AAPL Call Spreads (purchased last Friday for $3.80) and made a 28% return.  I would have made 31% if I had let them go to expiry, but today’s entry opportunity was too great to let it pass by.

    Shortly after that I bought Sept $365/$370 Call Spreads for $3.55.  I anticipate making 37% on that purchase.  They mature next Friday.

    I’m investing using a strategy I worked out after examining Weekly activity going back to January 2.

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    Posted: 09 September 2011 05:41 PM #67

    Good plan - did you have to sell a car to get on the bus again or did you recover from your prior trading scheme?

         
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    Posted: 09 September 2011 06:18 PM #68

    Got the weekend to mull over 2014 AAPL LEAPS before they start trading on Monday.

    Apple II+ - 06 September 2011 05:47 PM

    Reminder: 2014 LEAPS listing on Monday

    Roman - 27 July 2011 06:23 PM

    2014 LEAPS will be listed on September 12, according to OIC. (AAPL is Cycle 1).

    I’m starting my long-term planning. Anyone have targets in mind? Calls or spreads?


    Last year they went on Sep 13th, with extra strikes added in the following several days. I bought a single Jan’13 $400 call (sadly, a tiny investment since I was out of funds) on 9/15 for $20. It hasn’t traded that low since then, though it did go below $25 on June 20 (current price near $60). Right now it looks like a decent potential for a fire-and-forget 10-bagger (with the usual caveats of “fire-and-forget” such as market meltdowns, Steve Jobs health, debt ceilings, etc)

    With AAPL’s ‘coiled spring’ remaining steadily coiled, and seeing that I will have much less time to jump in and out of market in the next two years, I plan to rely on 2014 LEAPS more than other options.

    Would be interested in anyone’s thoughts and strategies.

    P.S. This was my 666th post—a good omen perhaps for the 2014 LEAPS, as $666.66 was the price of the Apple I

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    Posted: 09 September 2011 06:23 PM #69

    Nagrani - 09 September 2011 08:41 PM

    Good plan - did you have to sell a car to get on the bus again or did you recover from your prior trading scheme?

    Gregg had to sell a car?  Wha?

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 09 September 2011 06:34 PM #70

    Mav - 09 September 2011 09:23 PM
    Nagrani - 09 September 2011 08:41 PM

    Good plan - did you have to sell a car to get on the bus again or did you recover from your prior trading scheme?

    Gregg had to sell a car?  Wha?

    Now that’s funny.

         
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    Posted: 09 September 2011 07:32 PM #71

    lovemyipad - 09 September 2011 01:42 AM
    Mav - 09 September 2011 01:31 AM

    So if it’s a whipsaw, you watch for it and try to sell both at a gain, then.

    Exactly.  I’ll have a better idea in the morning with the news and futures and premarket (gap up or down?) what approach I’ll take…closing live with market orders, or setting limit orders, or trailing stops or whatnot.

    Well, the market gapped down and never faded the gap, soooo…  the results of my way OTM strangle…the calls died.  Puts more than made up for the loss:

    SPY SEP 100 bought @.07, went to .28
    SPY SEP 106 bought @.11, went to .69

         
  • Posted: 09 September 2011 07:45 PM #72

    Mav - 09 September 2011 09:23 PM
    Nagrani - 09 September 2011 08:41 PM

    Good plan - did you have to sell a car to get on the bus again or did you recover from your prior trading scheme?

    Gregg had to sell a car?  Wha?

    In the last 30 days I have sold the following
    1935 Auburn 4 dr convertible
    1968 Javelin SST
    1966 Mustang coupe
    1930 REO Flying Cloud 4 dr Sedan

    I still have the following for sale
    1937 Oldsmobile L37 4dr sedan
    1968 Thunderbird 2dr HT 429 Thunderjet
    1946 Packard Super Clipper limousine

    I’m keeping
    1923 Cleveland 4 dr sedan (only one known to still exist anywhere)
    1927 Studebaker Brougham 4 dr sedan
    1941 Buick Special 4 dr convertible (one of 460 made)
    1947 Packard Clipper Taxi (one of six known to exist)
    1969 Mustang Boss 429 (one of 859 made)
    1969 Ford Boss/GT (one of a kind)
    2010 Mustang convertible
    2005 Ford GT

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    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

         
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    Posted: 09 September 2011 08:23 PM #73

    That’s two weeks below max pain after one week above.

    What’s the point? Mace had observed a phenomenon with monthly options that AAPL tends to close near the highest put or call open interest strike at expiration if it closed below or above max pain, respectively. I’m tracking it weekly to see if it still holds with the weeklies or if any other correlation can be observed. The highest open interest put and call strikes is something that should ring a bell with followers of AAPL Pain which focuses on the range between them and one more strike as the likely price at expiration.


    Max pain history:

    date      MP    HPOI  HCOI  Close    Note
    09
    /09/11  $380  $380  $390  $377.48  near HPOI
    09
    /02/11  $385  $375  $390  $374.05  near HPOI
    08
    /26/11  $370  $370  $380  $383.58  near HCOI
    08
    /19/11  $365  $350  $400  $356.03  near HPOImonthly
    07
    /15/11  $345  $350  $360  $364.92  near HCOImonthlycountertrend? (*1)

    MP max pain
    HPOI 
    highest put open interest strike
    HCOI 
    highest call open interest strike 


    References:

    *1 countertrend?

    [ Edited: 09 September 2011 09:12 PM by Apple II+ ]

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    The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. — Steve Jobs

         
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    Posted: 09 September 2011 08:26 PM #74

    Gregg Thurman - 09 September 2011 10:45 PM

    I’m keeping
    1923 Cleveland 4 dr sedan (only one known to still exist anywhere)
    1927 Studebaker Brougham 4 dr sedan
    1941 Buick Special 4 dr convertible (one of 460 made)
    1947 Packard Clipper Taxi (one of six known to exist)
    1969 Mustang Boss 429 (one of 859 made)
    1969 Ford Boss/GT (one of a kind)
    2010 Mustang convertible
    2005 Ford GT

    No collection can be considered complete unless it includes at least one Studebaker. The Ford Boss/GT, is that a GT-40?

    :apple:

         
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    Posted: 09 September 2011 08:57 PM #75

    Gregg Thurman - 09 September 2011 10:45 PM

    2005 Ford GT

    One of the most beautiful cars ever made. And I say that as the owner of a new Corvette Grand Sport, so my standards are high.

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