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Option Maestro  

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  • 3 Summer Rally Option Ideas: Large Upside, Limited Downside [View article]
    No option delta is not a reason to buy or sell a stock/option in my opinion. I state that the pricing can change quickly over night and it does. No it's not my only analytical tool. This strategy is simply a way to get into a continued rally for cheaper than purchasing the stock (in case the market sells off). If you purchase slightly in the money calls on the major indices and it rallies you make money, if it sells off you have limited downside to the price paid for the spread. Have you read any other posts? Most of my posts talk about selling calls or puts on stocks to gain the premium and protect. See this site about price distribution
    Aug 3, 2009. 12:46 AM | 1 Like Like |Link to Comment
  • 3 Summer Rally Option Ideas: Large Upside, Limited Downside [View article]
    When I write a covered call and have the chance to buy it back for a profit I do, then I'm patient and write it back out. The market is volatile and the slightest change in the underlying asset could result in a great change in the option premium. I have traded the higher strike option back and fourth multiple times in one day before if profitable. I don't know why I need to provide links when you can google it, but on my blog the post I talk about option probability is: optionmaestro.blogspot...

    I don't base my trades on delta values but it gives me a quick idea on where to write and where to buy the option.
    Aug 2, 2009. 10:07 PM | 1 Like Like |Link to Comment
  • 3 Summer Rally Option Ideas: Large Upside, Limited Downside [View article]
    If you would have been buying spreads in the last 6 months you would have made a lot of money (as I have), so I don't know what you're talking about losing money. If you knew how to do some simple research (or even search my blog for option probability) correctly, you would find many ways of calculating option probability. Most brokerages give some kind of probability calculator tools out for free. Email me and I'll send you a copy of my e-book for free with the probability % highlighted if you'd like...

    On Aug 02 01:58 PM LanceLink wrote:

    > Option spreads, while not as risky as simply buying a call, is yet
    > another example of directional trading, which only works if the underlying
    > stock moves in the direction you want. If it goes the other way
    > -- especially buying front-month calls (here, with three weeks left)
    > -- your position is going to lose a lot, really fast. Even with
    > spreads. The fact that you sold the upper-strike call is of little
    > consolation.
    > Also, as with almost every other article Mr. Hickey writes, he matter-of-factly
    > peppers the prose with statements that "the __ strike call option
    > is factoring in a __% chance it will expire at or above it at ___
    > expiration." This obsession with "chances" and what "chance" is
    > "factored in" is neither explained, nor is it a useful metric.
    > [Note to Marco: I scoured your blog. I looked at your book. Other
    > than perhaps a fleeting mention of the mechanics of option pricing,
    > at no point do you explain your utter preoccupation with what price
    > move the market is "factoring in." I have read a plethora of options
    > related books and materials, over many years, and I have never before
    > encountered anything coming close to the emphasis you have placed
    > on this one pricing factor.]
    > Sell calls. Sell puts, if you're comfortable doing that. But buying
    > spreads is just another way to lose money, and gives you a false
    > sense of security.
    Aug 2, 2009. 02:33 PM | 2 Likes Like |Link to Comment
  • Recession Is Over: Long Live Depression [View article]
    Great article. These are my thoughts exactly... Can you really cure a hangover with another drink?
    Aug 2, 2009. 03:16 AM | 32 Likes Like |Link to Comment
  • 20 Option Ideas to Protect and Profit: Financials [View article]
    Thank you, delta neutral strategies see: optionmaestro.blogspot...

    On Jul 31 03:51 PM Investing In The future wrote:

    > good article - where did you get your probablitiies ?
    Jul 31, 2009. 11:18 PM | Likes Like |Link to Comment
  • Oil Takes a Dive; Is It Still Alive? 45 Option Strategies [View article]
    I forgot to mention in this article that yesterday the third most active traded option contract was the January 55 USO call... See top ten from yesterday at: optionmaestro.blogspot... I just thought it was interesting that that many January 55 USO calls traded yesterday.
    Jul 30, 2009. 03:51 PM | 1 Like Like |Link to Comment
  • Breakout Stocks on Huge Volume: Three Option Trades [View article]
    Yes I purchased several August call 5's for $35 per contract. 20% higher after hours... I'll definitely look to lighten up tomorrow.
    Jul 27, 2009. 05:41 PM | Likes Like |Link to Comment
  • Using Options to Get a Sirius Discount [View article]
    Look at it in terms of % not $.. Its a 25% discount if you can get it... Bid is 5 cents right now. On the next spike you may see a 10 cent bid... I did say it requires some patience...

    On Jul 27 02:33 PM relmar2003 wrote:

    > No, timing is everything. Buy them on spikes, sell back on the dips.
    > No spike right now, therefore its a fool trade. Good luck even getting
    > .10 cents right now. But if some poor sucker puts up a .10 cent sell
    > right now, the first spike will take it out, and .15 or .20 might
    > have been possible. Wasted money. This is the bottom. No need to
    > hedge a .40 cent stock. Unless you see BK in the next 6 months, which
    > is impossible for 2 years, at least, and now probably never.
    Jul 27, 2009. 02:40 PM | 1 Like Like |Link to Comment
  • Using Options to Get a Sirius Discount [View article]
    It's a way to lower your cost for someone getting long and not to trade it every day. It is lowering your cost by 25% and puts you in for roughly 30 cents a share. Sirius needs to be at $1.11 a share by December to make this bet not worth it. This is if you want to get long. Do you think Sirius is going to get to $2 or $3 ever again? If they could make money it is one thing, but they can't. Short interest is less than 4% on this stock. Not to mention it has a long way to go before any institutions buy it.

    On Jul 27 11:42 AM relmar2003 wrote:

    > This is terrible advice. Not worth giving up 6 months time on my
    > shares for .10 cents. And you wont get .15 cents at even .50 cents,
    > so nice try. No chance. Better to wait till it breaks .60 cents
    > again, to begin even looking at them, which it will here shortly.
    > This guy wants you to shoot your load too soon. Dumb play. I doubt
    > this guys is making this trade. If he is, he doesnt know options
    > or what Q3 is going to do to there bottom line, hence hes playing
    > a company he doesnt understand. I would never lock up my shares for
    > .10 cents, before the Q3 comes out. No way. Not a chance. Patience.
    > Very little time decay if you wait until after Q2 or before for the
    > run up, and then try for a .15 or .20 cent grab. In July,/August,
    > I need at least .25 cents to make it worth it. If this stock does
    > run to $1, keep your shares, and write calls for .60 cents or more
    > a share, covering you all the way back to .40 cents. Thats if it
    > happens in the next couple months.
    Jul 27, 2009. 01:16 PM | 2 Likes Like |Link to Comment
  • 3 Income Generating Strategies Using Index ETFs and Options [View article]
    Diagonal spread not calendar-typo
    Jul 26, 2009. 03:40 AM | Likes Like |Link to Comment
  • Why I Sell Put Options (Part II) [View article]
    Limit stock orders.. You know what I mean. I use limit option orders to place my put option trades.

    On Jul 21 04:54 PM Carneades wrote:

    > If you never use market orders, and only rarely use limit orders,
    > then what sort of an order do you use to sell the put option?
    Jul 21, 2009. 05:07 PM | 1 Like Like |Link to Comment
  • 15 Breakout Stocks on Big Volume [View article]
    Most brokerages will give you this probability easily, otherwise look into the Black-Scholes option pricing model. See two posts here:



    On Jul 20 05:25 PM User 449106 wrote:

    > Hi Marco,
    > I wanted to know how you find out the probability of an option closing
    > at certain price.For E.g in your CBLI vertical spread you say
    > "but if the stock increases to 7.50 a share by options expiration
    > (currently less than a 20% probability)"
    > How do you find out that probability of closing at 7.50 is 20%<br/>
    > Thanks,
    > Vikas.
    Jul 20, 2009. 05:30 PM | Likes Like |Link to Comment
  • Earnings to Watch This Week [View article]
    I think CAT will report better than expected, but it may be expected judging at the recent rally. Therefore I think it will sell off.

    On Jul 20 08:41 AM Andy1234 wrote:

    > Cat looks like its going to pullback for the next day or two.
    Jul 20, 2009. 11:11 AM | Likes Like |Link to Comment
  • Expected Volatility: 20 Option Straddle Ideas for High Beta Stocks [View article]
    Why does it have to be done in huge quantities? Think of it in terms of % not $. Many of these companies report earnings, and if they beat or miss significantly and the stock changes in either direction by 10% (which isn't impossible) with some time value left, you'll most likely see a net profit on the position.

    On Jul 20 09:22 AM skwestorange wrote:

    > This is a very easy to do but difficult to make money strategy unless
    > done in huge quantities and one catches narrow moves quickly.
    Jul 20, 2009. 09:49 AM | 1 Like Like |Link to Comment
  • 10 Stocks to Watch on July Options Expiration Friday [View article]
    Thank you!

    On Jul 17 09:17 AM Chuck Anthony wrote:

    > One of the most timely and straight foward articles I've had the
    > pleasure of reading today on SA -- Clear, concise and insightful.
    > Happy Expiration Friday, Marco!
    Jul 18, 2009. 05:34 PM | Likes Like |Link to Comment