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Adam Beaty  

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  • Apple: Time For A Condor [View article]
    Hit my profit target on this trade today. Closed out the position with 50% of the total credit. This was an easy trade that didn't require any adjustments.
    Jan 2, 2013. 10:09 AM | Likes Like |Link to Comment
  • What Is The Right Strategy For Apple Now? [View article]
    A whole post dedicated to my iron condor on Apple. Interesting analysis and excellent counter-argument.
    Dec 12, 2012. 08:19 PM | 1 Like Like |Link to Comment
  • Apple: Time For A Condor [View article]
    IV coming in over 8% today - already a good start
    Dec 11, 2012. 07:37 PM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    Apple will get the volatility spikes in its weekly options. I'm not worried about volatility getting carried into the February options.
    Dec 11, 2012. 06:34 PM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    Be careful just writing iron condors when volatility is high. It is more important that you catch volatility coming down instead of going up. These out of the money options react very violently to volatility, so if you catch it while it is going up you could be looking at a loss.
    Dec 11, 2012. 10:35 AM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    There are many ways you can flatten the deltas. If the stock price is moving towards the upside you can buy calls and sell some spreads to flatten the upside. This will create what they call a kite spread. On the downside you can usually just add some vertical put spreads.
    Dec 11, 2012. 09:15 AM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    It should definitely be an exciting time but I make no assumptions on Apples performance. Need more time to see how the market will react to Tim Cook at the wheel to get a better baseline.
    Dec 11, 2012. 09:01 AM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    It does matter because I use it to measure to see if the trade is worth entering. I use this formula:

    Probability of Success + Return >= 100%

    In my trade it will be:

    80% + 30% = 110% which is greater than 100%

    Now I know the trade is worth taking. The premium received is worth the risk of entering.

    Trying to figure out what the day to day changes will be and where they correlate to the loss target will be very difficult. You would have to make a lot of assumptions on stock price, time, and volatility. It is best to look at when I want to exit and the probability in that time frame.
    Dec 11, 2012. 08:59 AM | Likes Like |Link to Comment
  • Apple: Time For A Condor [View article]
    I agree with both. I think the stunt for the plant was just to get everyone off their labor problems. I will patiently wait and see if Mr. Cook and Apple can surprise the world again.
    Dec 11, 2012. 08:56 AM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    I am with your Eric. 90% of the time I am selling options, but there is the occasional time I prefer to buy options. Usually when I buy options it is because volatility is extremely low.
    Nov 29, 2012. 10:47 PM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    I did take the loss on this one. With volatility still in the dumps I may just add an ATM straddle for January.
    Nov 29, 2012. 08:30 AM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    I'm like you 1234gel I usually prefer to sell premium in most cases, but sometimes it is better to buy over sell.
    Nov 27, 2012. 08:58 PM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    Volatility is the x-factor when it comes to option prices. If you can get volatility to move, in your favor, you can basically forget about the other inputs.

    The long call when the underlying is 173, volatility increases 10%, and on 12/21/12 will yield a little over $3,000.

    The long call when volatility increases 10%, on 12/21/12, even if the underlying drops to 167.88 you will still yield a 100% return.
    Nov 27, 2012. 08:56 PM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    Easiest way to show the effect is through a model.

    Say for instance I put on a vertical spread the 171/173 call spread for .70 debit.

    Here that is: http://bit.ly/Tob2dc

    Now I am going to set the underlying price to 173 because that is my target.

    I now have a profit of $33.32 (I am only using a 1 lot on these trades to show): http://bit.ly/QnytpG

    Now say I keep the stock price at 173 and increase volatility by 5% (also what I predicted).

    My profit has now dropped to $29.77: http://bit.ly/Tob2dg

    Here is an increase in volatility to 10% - stock price still at 173.
    Profit has now dropped again to $27.45: http://bit.ly/QnytpI

    20% volatility - profit now $24.18: http://bit.ly/Tob2dk

    So even though I get to limit my risk the vertical spread isn't really designed to take advantage of a increase in volatility, and that is what I am looking for in this trade.
    Nov 27, 2012. 09:05 AM | Likes Like |Link to Comment
  • Gold Is Starting To Wake Up [View article]
    The OTM options are only expensive to the ATM options because of skew.

    However, all the options are inexpensive due to the lower volatility. This is why I am a buyer of premium here and not a seller. Now is not a good time to sell options in GLD. If volatility does start to tick higher than the short options will start to lose.
    Nov 26, 2012. 06:06 PM | Likes Like |Link to Comment
COMMENTS STATS
45 Comments
5 Likes