BarTune1
441 posts
msg #143362
- Ignore BarTune1 |
4/26/2018 5:38:24 PM
Thanks for the update Greg ... I looked at a couple of options (no pun intended) for rolling out although they didn't look all that attractive ... likely due to a collapse in IV after the "news" was out ... I'm not a novice at options but most of my experience has been with directional strategies or selling calls or puts directionally to capture premium.
I don't have as much experience on the vol trades which you seem to specialize in so I find your posts interesting. Calendar spreads interest me but the key is knowing what trade to take ... not the mechanics underlying them.
I just got a look at your post now but will probably try to follow along tomorrow morning. I think HD may end up pulling back making the original trade ok. However, obviously the risk/reward ratio here bad if the price moves up. Not taking action at this point is basically the same as making a directional bet!
|
gmg733
788 posts
msg #143363
- Ignore gmg733 |
4/26/2018 6:23:30 PM
Your delta in the trade is what tells you how directional you are in the trade. I'm now at -10 delta so I'm slightly short. If it does pull back you may sit still or roll that put up to the 30 delta or something effectively narrowing your strangle and getting more neutral on your delta. I think mine was at .23 which is giving me no help. So I rolled up. I should have waited till the morning since vol will be slightly higher on the open, but oh well.
Directional trades are 50/50 shots. I swing trade futures for that. Just me.
Vol trading is built on the premise that volatility is overstated and 90 plus percent of the time it is. That is my edge in options trading. So when vol pops up on something I wanna be a seller.
2017 was tough on options vol traders because the moves to the upside were outside of the expected range. I was delta neutral most of the year and did fine. Those who were delta short to hedge their short vega didn't have great years last year. 2015 was a monster year though that paid for whatever misgivings 2017 dealt them.
Its give and take for sure. For what it is worth I haven't had to adjust an options trade in over a month. about 1 out of 10 trades I usually have to manage. Not a big deal as long as the P/L cooperates. There are times when I'll give up but that is not very often. I think I did twice last year.
|
BarTune1
441 posts
msg #143366
- Ignore BarTune1 |
4/27/2018 9:38:17 AM
Rolled out the HD put at 2.50 .... slightly better pricing ...
|
gmg733
788 posts
msg #143367
- Ignore gmg733 |
4/27/2018 9:46:10 AM
yeah its down today. I was gonna send you a note and saying you might hang tight if you wanted too. But this could simply be a balance day and more upside.
Once again, no one knows anything. :)
I learned something new today. XLY vol was pumped up. What I didn't realize is how much XLY is made up of AMZN, 20%. So while it is up over a dollar today, vol is coming in due to AMZN earnings. A little $$$ back in my pocket on a trade that has gone the wrong way on me. I thought it was XRT. Oh well.
|
gmg733
788 posts
msg #143368
- Ignore gmg733
modified |
4/27/2018 10:42:01 AM
Something to think about. Both AMZN and FB crush earnings and the market is down. There might be some upside into month end, but this does not look good for the market.
This market is reminding me of 2007
|
BarTune1
441 posts
msg #143369
- Ignore BarTune1 |
4/27/2018 11:07:31 AM
Well, I'm way overweight to the short side currently ... so that would help.
Being so short has been a tough battle the last couple years ...
|
gmg733
788 posts
msg #143371
- Ignore gmg733 |
4/27/2018 1:26:36 PM
yeah going delta neutral saved my bacon. But I started getting delta short towards the end of 2017 and I was flat for months because the vol would come in and essentially offset the loss on the deltas.
If I would have stayed delta neutral I would have been up more. But vol being back is nice. My profits are almost equal to last years already simply because vol is up.
|
gmg733
788 posts
msg #143372
- Ignore gmg733
modified |
4/27/2018 2:30:22 PM
Looks like weekend vol is coming out today. I'll start rolling on Monday my positions that are 21 days DTE that are not profitable or are underwater.
I'll determine what I'm going to do with HD on Monday Bartune. I may roll it out.
Have a good weekend all.
|
gmg733
788 posts
msg #143373
- Ignore gmg733 |
4/27/2018 2:32:43 PM
IV in XLY came in big today. Wow! I was selling strangles with extremely high IV and it is down about 60% now. I needed the help. :)
|
johnpaulca
12,036 posts
msg #143375
- Ignore johnpaulca |
4/27/2018 3:56:02 PM
SPY....daily buy signal triggered today.
|