Q3 Earnings:  Weekly GAMBLE?

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    Posted: 20 July 2012 09:05 PM

    What say you?  For you Gamblers out there and you Weekly’ers out there.  You’ve got some pocket change, flipped over the couch cushions, accidently knocked over the kids piggy banks, rounded up all the booty, and are looking to place a bet for next week.

    Obviously this is not investing/trading advice.  This is pure fun, side bet gambling on our favorite fruit co. and their ability to blow out consensus expectations!  Woo-hoo!

    Maybe pick up a few 650’s or a couple 640’s????  Naked of course.  Anything under $1000 for me.  Just to keep the blood flowing, heart rate up.  Watch Monday real close, maybe wait ‘till Tuesday!!!! 

    Any takers?  Don’t be shy!  I read how much you all loved Vegas…..

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  • Posted: 20 July 2012 11:49 PM #1

    I took a loss on my July spread.  I opened Jan13 610/710 call spread.

         
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    Posted: 21 July 2012 12:03 AM #2

    Maybe it’s a weekly, maybe it’s a monthly, naked or spread, dare you short?  What’s your grand slam play?

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    Posted: 21 July 2012 01:01 AM #3

    I decided to go with the weekly 625/645s with whatever pocket change I had left. BTW, naked means writing an option uncovered, where what you really mean is buying unhedged options. Just a little pet peeve of mine. :-p

         
  • Posted: 21 July 2012 01:09 AM #4

    I’m thinking you guys have bigger stones than wallets.  The premium on the weeklies is far stronger than my conviction that WS will reward instead of punish you.

    Note to the gamblers:  Vegas is more fun.  I’m not convinced the odds aren’t better there either.  After today, I am NEVER, EVER going to hold options anytime 1-2 months before expiration.  And just remember, the EO are far more greedy than you are.

         
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    Posted: 21 July 2012 01:13 AM #5

    After today…? LOL

    Look, I feel for you Mercel, but people have to learn on their own and make their own mistakes.  Even iPad from time to time LOL.  Given the way she trades, I’d say she has a decent amount of capital to throw around. wink

    Not saying I _will_ bet with short-term options.  But it’s a possibility.  And remember, the BCS can mitigate much of the IV problem and drastically lower the price of entry to the roulette table.  Not a question of wisdom, it’s a question of cost.  Using the BCS in increments As Low As $250 or So(tm) is probably the bet I’ll end up taking on the shortest-term side, if I choose to bet a little crazy like that.

    [ Edited: 21 July 2012 01:19 AM by Mav ]

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  • Posted: 21 July 2012 01:21 AM #6

    Well, I know.  The best lessons learned are the ones that make you pay.  Hell, I’m up 4,000% since March 2009 so I can afford to take some risk.  My mistake was resisting the uber bulls last April (“last time we see sub-600s, blah, blah, blah”).  I knew better but did not act on my better instincts.

    Lesson learned.  I’m recalibrating next week and looking forward to it. 

    Next week at this time, I’ll be repositioned to recover and gain on what I lost this week.

         
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    Posted: 21 July 2012 01:26 AM #7

    Mercel - 21 July 2012 04:21 AM

    Well, I know.  The best lessons learned are the ones that make you pay.  Hell, I’m up 4,000% since March 2009 so I can afford to take some risk.  My mistake was resisting the uber bulls last April (“last time we see sub-600s, blah, blah, blah”).  I knew better but did not act on my better instincts.

    Lesson learned.  I’m recalibrating next week and looking forward to it. 

    Next week at this time, I’ll be repositioned to recover and gain on what I lost this week.

    Ah yes.  Thanks for reminding me continually of my inferiority as an trader-investor, whether you intend to or not. wink  Just kidding, I think.  It’s a thing, it’s one of my burdens, so I’m not entirely sure.  Hopefully someone will understand. LOL

    Of course, longer term options won’t make losses back as quickly when you’ve lost on shorter-term options - I’m somewhat-still-standing proof of this from April.  But as you know the same as I do, longer-term options are always the core of a semi-disciplined leveraged trading plan.  Given the proper conviction and semi-proper AAPL valuation, we’ll be OK by year-end, presumably moreso.  (By which I mean we should be close to or better than portfolio ATHs earlier in the year.)

    I figure short-term earnings plays won’t be anywhere close to even a third of the value of my core trades.

    [ Edited: 21 July 2012 01:32 AM by Mav ]

    Signature

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

         
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    Posted: 21 July 2012 01:29 AM #8

    nkmho - 21 July 2012 04:01 AM

    ..... BTW, naked means writing an option uncovered, where what you really mean is buying unhedged options. Just a little pet peeve of mine. :-p

    My mistake, thank you for the correction, that’s precisely what I meant.

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    Because Longer is better…....

         
  • Posted: 21 July 2012 01:39 AM #9

    LEAPfrog - 21 July 2012 12:05 AM

    What say you?  For you Gamblers out there and you Weekly’ers out there.  You’ve got some pocket change, flipped over the couch cushions, accidently knocked over the kids piggy banks, rounded up all the booty, and are looking to place a bet for next week.

    Obviously this is not investing/trading advice.  This is pure fun, side bet gambling on our favorite fruit co. and their ability to blow out consensus expectations!  Woo-hoo!

    Maybe pick up a few 650’s or a couple 640’s????  Naked of course.  Anything under $1000 for me.  Just to keep the blood flowing, heart rate up.  Watch Monday real close, maybe wait ‘till Tuesday!!!! 

    Any takers?  Don’t be shy!  I read how much you all loved Vegas…..

    Well, I’m more in the 635s than anything else, with a healthy dose of 645s next in $$$ spent, and a very light sprinkling of 660s, and “pocket change” worth of 685s for the hell of it.

         
  • Posted: 22 July 2012 01:57 PM #10

    Signed up for this site today after reading and hanging out in these forums for a few weeks.
    Took a major hit on some options this week. My background is in finance although I work in healthcare now…been trading options for. 9 years.. Been very successful in mostly selling options. Deep OTM options,strangles,iron condors,etc…big follower of Dan Sheridan,Tom Sosnoff,etc…

    Unfortunately ,I am always fighting my inner trading demon and this week he hot the best of me and won. I went with some strictly directional trades and got hurt bad this week on some earnings plays ..

    So I need to make a nice payday -what are your guys thoughts on aapl and the best plays for this week? I’ve looked at different butterfly’s and straddles..options r very pricey on the weeklies..

    So what r you guys doing ?

         
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    Posted: 22 July 2012 02:55 PM #11

    If you’re mostly an option writer…sit it out.

    “Need to make a nice payday” is a potentially risky mindset to have particularly going into earnings. 

    Mindset is half the battle.  Just for reference I’ve been buying calls and puts for over a decade, with plenty of battle scars to show for it.  I’ve only started hedging options recently.  When I’m least in control, I’m most vulnerable.

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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: 22 July 2012 04:17 PM #12

    Mercel - 21 July 2012 04:09 AM

    (...)
    After today, I am NEVER, EVER going to hold options anytime 1-2 months before expiration.

    Oh, Mercel!!  Been there, felt that!!  They say “pain instructs,” but I seem to make/break this vow every other quarter, so obviously it’s a lesson I have to revisit periodically.  I do sooooo well resisting for sooooo long, and then ARGH!  I get in when I shouldn’t; I fail to get in when I should; I hold too long; I sell too quickly.

    And of course, your experience of not listening to the uber-[insert-bull-or-bear-here] is a universal.  I’ve listened and lost; I’ve not listened and lost.  I’ve realized: both sides get whipsawed short-term.  That’s the rub.

    Bottom line, holding short-term options (for longer than an hour) rarely works out well for me, especially unhedged.  Too much can go wrong too quickly, and psychologically, I lose objectivity when I hear a ticking clock; so I don’t manage the position as well as I would if it didn’t expire so soon.  (I do best with 6-months + expirations, even if I have no intention to hold to OE.)  So whenever I succumb, my goal must always be: take the money and run.  Don’t watch green turn red.  Don’t let red turn more red.  (I’d rather lose opportunity cost versus real money.)

    It’s risk/reward, and IMHO, the shorter the term, the higher the risk.

    Of course you know all this.  And so do I.  And yet I frigging bought weekly spreads on Friday!!!  I’m an idiot!!! ARGH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

         
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    Posted: 22 July 2012 04:25 PM #13

    Yes iPad!  You are!

    Aw dammit!

    Ahem.  In all seriousness, short-term trading DOES have a place, I think.  It’s a function of discipline and capital “control”.  I regularly trade shorter-term options/verticals in both directions…but in intentionally smaller amounts.  Side bets.  And with verticals, it’s even easier for the bets to be less than 1% of the portfolio.  Keeps me interested, sharpens my trading instinct, helps me continue my lifelong learning.  Sounds crazy, but someday I may be trading AAPL less actively and looking at other stocks.

    I regularly try momo/swing/trend trades, and while they tend not to be anywhere near as successful as my longer-term trades, every trade I make has some thought and gain objective behind it.

    All that said, Monday, friggin’ get here already!  Let’s see the odds tables before I place any bets! LOL

    [ Edited: 22 July 2012 04:44 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
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    Posted: 22 July 2012 04:46 PM #14

    Mav - 22 July 2012 07:25 PM

    (...)
    In all seriousness, short-term trading DOES have a place, I think.  It’s a function of discipline and capital “control”.  I regularly trade shorter-term options/verticals in both directions…but in intentionally smaller amounts.  Side bets.  And with verticals, they can be very small bets/micro bets of under 1% of the portfolio.  Keeps me interested, sharpens my trading instinct, helps me continue my lifelong learning.

    Then again, I regularly try momo/swing/trend trades, and they tend not to be as high-percentage as my longer-term trades, though every trade I make has some thought and gain objective behind it.

    All that said, Monday, friggin’ get here already!  Let’s see the odds tables before I place any bets! LOL

    Oh, I love short-term trading—for all those reasons.  It’s short-term expirations I hate!

    But you, my friend, are setting quite the high bar with your trading discipline of late.  I must say, it’s during those stretches when I’m most disciplined that I’m consistently profitable…more skill than luck.  As Gregg said (paraphrasing), skill comes in handy when your luck runs out. wink

         
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    Posted: 22 July 2012 05:15 PM #15

    You can’t get that sweet, sweet gamma effect as easily when you bet farther out. wink

    Signature

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