Wanted to sell calls at the close but didn't get filled on
my. PM stocks about 5% below short term targets at
their highs yesterday. Anyway, pretty comfortable selling
aggressively on the put side here for 2 days for 22c.
Typically won't want to be naked (at least in this account)
overnight, so we'll see where we end up. Ultrabullish 3 white
soldiers patterns on this deep fakedown and breakup so buy dip
aggressively. Update: missed bottom by a penny, have to work
on that. Cleanest charts with targets very short term HL 3.25
(161 fib extn) ; NG 3.86 (161 fib ext of this
base) FSM 5.45 (100 extn) ; RIOM (2.93 100 extn) ....
probably work between their and yesterday's gap with higher
first. Good chance there's some real longer-term fund buying
in GDX this year at these prices. Very orderly buying in a
lot of these names with no gaps. A lot of these companies are
profitable at $900 gold, or so they say, now, and cheap oil will
help a lot. Demand in the east is pretty solid, so I am still
going to add beta at this point.
Wasn't supposed to be this crazy, but it's just working out this
way. Account up 17% as of the moment. I 'm going to
leave the 2 day weekly puts naked for now with the resurgence in
buying.
Since we have a full range bar already, I sold a 2 day GDX call
spread for 11c ; 21 / 21.5. Rolled profits
(assuming it goes to zero) , about $880 into 100 shares Detour
Gold.
GDX options are pretty liquid, even on the weeklies. Not
great fills, but can work pretty well if good trade
location. Beats trying to get off orders on 18
individual stocks.
i have an updated list of top performers off the Nov 2014 lows
on the right. On the left is the original 2015 Model GDXJ
Fund. As you can see, we had many of the best names in
at the start, and have added 3 more from trading
profits. We expect FNV, RGLD, and the double ETFs to
underperform during a nascent rally, as juniors always fly.
They are their to provide diversification, and they outperform on
selloffs. In our view, buy aggressively / sell put spreads at
the bottom of yesterdays range in these good names that have no
gaps. Expect higher prices to 5-6% above recent highs in very
short term.
Hi HFW - glad to see more options commentary on the site now
that our old friend Zach isn't trading with one hand & posting
with the other.
Question for you - TOS is a great platform, but commissions are
typically 1.50 per contract (I hope you have a better deal than
that). If you're selling spreads for .11, your max profit with 1.50
commission rate is already .08. And you have .39 risk per contract
on a volatile instrument. So if it goes against you & you have
to cover, your max profit is down to .05 per contract on a .50
spread. Isn't that picking up pennies in front of gamma/delta
risk?
I'll have to look over the math a bit for an exact
answer. IB is better than TOS. GDX weeklies
are pretty liquid, but you still get shafted to the tune of 3c or
so on the spread if you want a quick fill. I typically try to
get 25-30c on weekly 1 point spreads, but the trade location in
this example was good enough to give it a go, plus that will give
me some cover on the short puts I want to let expire.
I only used a 1/2 point spread in that trade, which I typically
would not do, but in this case I don't like the upside risk.
I think we will range trade here for a week with upside bias.
The TOS account I'm showing are real trades in a DEMO account as I
have time.
Using index options against a preferred set of stocks is the
best way I've seen to do some intraday stuff without driving
oneself crazy trying to get off 18 trades. Also, IB has the
family and friends which allows one to get off 1 trade across
multiple accounts.
IB - family and friends, will have to check out that concept. i
use Fidelity. they have 'special' deals (either free trades or
Frequent flyer miles or cash), but you have to check with them
annually through the active trader desk. you can have ~100 (or more
depending on the money you deposit there each time - have to leave
it with them for 1 yr) of free trades (you have to 'negotiate' for
the period of time - i have 1 year) currently free trading works
for up to 20 option contracts per execution (used to be ~ 27,
so i will have to negotiate that next year). depending on who you
'work with' that can be for one account or one user (across several
accounts). they wouldn't give me a deal for a 3rd year running, so
i put my wife on the phone and they gave her the deal. (same
account go figure). still saving 7.95 base plus .75 per contract.
we saved over $2k last year in commissions. good trading. Haz
Thanks, Haz - if you're trading fewer than 10 contracts at a
time, going through dough.com to set up a TOS account gets you
1.5/contract total - lower than Fidelity at <10 with no
negotiation needed and a far better trading platform.
Thanks. The amount collected on dollar-wides makes sense. I stay
away from selling cheap options altogether, though. I don't think
volatility in GDX is high enough relative to a $1.40 weekly 1
standard deviation to warrant the upside risk. If you're trying to
improve cost basis on being long the etf, the puts are decent naked
-- but that's only meant in terms of getting long the etf (assuming
one wants a longer term long).
My choices in these trades are also influenced by the context of
long only IRAs and siphoning off a bit of vol on a long portfolio
which is directly correlated to . The options trades aren't
meant as best practices on options trading in general.
I could use the inverse ETFs but do not want to hold them or
book losses, and the option spreads give a bit of price buffer and
theta decay if I get bad trade location. I could use high
delta in the moneys, particularly with more directional bias, but
that has a bit more risk, too. Certainly welcome any ideas
for more efficiency.
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2015 GDXJ Model Portfolio - SOLD NAKED 2 DAY 40 GDX 19.5 PUTS 22C AT 19.83
Posted by hatefalseweight on 7th of Jan 2015 at 09:48 am
Wanted to sell calls at the close but didn't get filled on my. PM stocks about 5% below short term targets at their highs yesterday. Anyway, pretty comfortable selling aggressively on the put side here for 2 days for 22c. Typically won't want to be naked (at least in this account) overnight, so we'll see where we end up. Ultrabullish 3 white soldiers patterns on this deep fakedown and breakup so buy dip aggressively. Update: missed bottom by a penny, have to work on that. Cleanest charts with targets very short term HL 3.25 (161 fib extn) ; NG 3.86 (161 fib ext of this base) FSM 5.45 (100 extn) ; RIOM (2.93 100 extn) .... probably work between their and yesterday's gap with higher first. Good chance there's some real longer-term fund buying in GDX this year at these prices. Very orderly buying in a lot of these names with no gaps. A lot of these companies are profitable at $900 gold, or so they say, now, and cheap oil will help a lot. Demand in the east is pretty solid, so I am still going to add beta at this point.
Well done HFW on GDX
Posted by steve on 7th of Jan 2015 at 10:25 am
Well done HFW on GDX
2015 GDXJ Model Portfolio - SOLD BEAR CALL SPREAD 2 DAY 40 GDX 21 / 21.5
Posted by hatefalseweight on 7th of Jan 2015 at 11:11 am
Wasn't supposed to be this crazy, but it's just working out this way. Account up 17% as of the moment. I 'm going to leave the 2 day weekly puts naked for now with the resurgence in buying.
Since we have a full range bar already, I sold a 2 day GDX call spread for 11c ; 21 / 21.5. Rolled profits (assuming it goes to zero) , about $880 into 100 shares Detour Gold.
GDX options are pretty liquid, even on the weeklies. Not great fills, but can work pretty well if good trade location. Beats trying to get off orders on 18 individual stocks.
i have an updated list of top performers off the Nov 2014 lows on the right. On the left is the original 2015 Model GDXJ Fund. As you can see, we had many of the best names in at the start, and have added 3 more from trading profits. We expect FNV, RGLD, and the double ETFs to underperform during a nascent rally, as juniors always fly. They are their to provide diversification, and they outperform on selloffs. In our view, buy aggressively / sell put spreads at the bottom of yesterdays range in these good names that have no gaps. Expect higher prices to 5-6% above recent highs in very short term.
Hi HFW - glad to
Posted by a_l_ on 7th of Jan 2015 at 11:23 am
Hi HFW - glad to see more options commentary on the site now that our old friend Zach isn't trading with one hand & posting with the other.
Question for you - TOS is a great platform, but commissions are typically 1.50 per contract (I hope you have a better deal than that). If you're selling spreads for .11, your max profit with 1.50 commission rate is already .08. And you have .39 risk per contract on a volatile instrument. So if it goes against you & you have to cover, your max profit is down to .05 per contract on a .50 spread. Isn't that picking up pennies in front of gamma/delta risk?
I use IB for actual trades, better prices
Posted by hatefalseweight on 7th of Jan 2015 at 11:52 am
I'll have to look over the math a bit for an exact answer. IB is better than TOS. GDX weeklies are pretty liquid, but you still get shafted to the tune of 3c or so on the spread if you want a quick fill. I typically try to get 25-30c on weekly 1 point spreads, but the trade location in this example was good enough to give it a go, plus that will give me some cover on the short puts I want to let expire.
I only used a 1/2 point spread in that trade, which I typically would not do, but in this case I don't like the upside risk. I think we will range trade here for a week with upside bias. The TOS account I'm showing are real trades in a DEMO account as I have time.
Using index options against a preferred set of stocks is the best way I've seen to do some intraday stuff without driving oneself crazy trying to get off 18 trades. Also, IB has the family and friends which allows one to get off 1 trade across multiple accounts.
Commission costs
Posted by hazbin1 on 7th of Jan 2015 at 12:17 pm
IB - family and friends, will have to check out that concept. i use Fidelity. they have 'special' deals (either free trades or Frequent flyer miles or cash), but you have to check with them annually through the active trader desk. you can have ~100 (or more depending on the money you deposit there each time - have to leave it with them for 1 yr) of free trades (you have to 'negotiate' for the period of time - i have 1 year) currently free trading works for up to 20 option contracts per execution (used to be ~ 27, so i will have to negotiate that next year). depending on who you 'work with' that can be for one account or one user (across several accounts). they wouldn't give me a deal for a 3rd year running, so i put my wife on the phone and they gave her the deal. (same account go figure). still saving 7.95 base plus .75 per contract. we saved over $2k last year in commissions. good trading. Haz
Thanks, Haz - if you're
Posted by a_l_ on 7th of Jan 2015 at 12:59 pm
Thanks, Haz - if you're trading fewer than 10 contracts at a time, going through dough.com to set up a TOS account gets you 1.5/contract total - lower than Fidelity at <10 with no negotiation needed and a far better trading platform.
Thanks. The amount collected on
Posted by a_l_ on 7th of Jan 2015 at 12:06 pm
Thanks. The amount collected on dollar-wides makes sense. I stay away from selling cheap options altogether, though. I don't think volatility in GDX is high enough relative to a $1.40 weekly 1 standard deviation to warrant the upside risk. If you're trying to improve cost basis on being long the etf, the puts are decent naked -- but that's only meant in terms of getting long the etf (assuming one wants a longer term long).
Posted by hatefalseweight on 7th of Jan 2015 at 12:30 pm
My choices in these trades are also influenced by the context of long only IRAs and siphoning off a bit of vol on a long portfolio which is directly correlated to . The options trades aren't meant as best practices on options trading in general.
I could use the inverse ETFs but do not want to hold them or book losses, and the option spreads give a bit of price buffer and theta decay if I get bad trade location. I could use high delta in the moneys, particularly with more directional bias, but that has a bit more risk, too. Certainly welcome any ideas for more efficiency.