Seeking Alpha
View as an RSS Feed

SteadyOptions  

View SteadyOptions' Comments BY TICKER:
Latest  |  Highest rated
  • Is Apple Going To $700, Or Maybe $260? [View article]
    So why doesn't it?
    Jan 10, 2012. 11:28 AM | Likes Like |Link to Comment
  • Is Apple Going To $700, Or Maybe $260? [View article]
    CMacintosh, 30 days HV is about 23%. IV of Feb options is around 30-34%. I quoted the mid prices, AAPL options are among the most liquid in the market, the bid/ask spreads are around 2%
    Jan 10, 2012. 11:25 AM | Likes Like |Link to Comment
  • Trading Weekly Options With The SPDR Gold Trust And Others [View article]
    Yes. I meant 425 and 415/420/430/435.

    $5 might be much in dollar terms, but in percentage terms, it's 1.1% of AAPL price, while $1 is 3% of C or JPM price. So percentage wise, larger move is required for C or JPM, assuming you place the strikes at similar percentage distance.

    Placing 425/420/430/435 for AAPL would probably cost too much and to realize the gain, you will have to hold almost till expiration - is this correct?
    Jan 10, 2012. 11:14 AM | Likes Like |Link to Comment
  • Google Earnings Trade: To Hold Or Not To Hold [View article]
    fermin,

    We are using deltas as approximate measure for the probability to expire ITM. It is not 100% accurate but close enough.

    I will ask you few simple questions.

    1. With the stock at $50, does 50 call with delta of 50 has 50% probability to expire ITM?
    2. With the stock at $50, does 50 put with delta of -50 has 50% probability to expire ITM?
    3. If the answer to both questions is yes, then we agree that sign of the delta has nothing to do with probability, only with direction.
    4. If you buy both calls and puts, does the combined position has higher probability to expire ITM than call or put separately?

    P.S. lets keep the discussion on professional level and not get personal.
    Jan 10, 2012. 10:54 AM | Likes Like |Link to Comment
  • Trading Weekly Options With The SPDR Gold Trust And Others [View article]
    Kevin,

    This is an excellent article. I have couple of questions.

    As some already mentioned, doing the trade on low priced stocks using $1 spread might be a bit commissions consuming. With average broker charging around $1 per contract, you will pay $8 for the round trade which is a bit too much considering that your maximum gain on trade like GLD is around $25-30, assuming you close the trade early.

    When you say you place your strikes close to the stock, does it typically translate to around $0.6-0.7 debit on $1.00 spread? If I trade $5.00 spreads like Apple, would typical debit be around $3.00? For example, with AAPL trading around 525, would you place 515/520/530/535? What would be your profit target for such position?

    btw, I think it is very wise to close the trade around Wednesday or Thursday. Even if you are in a profit zone, the stock can reverse and all gains will be gone when you are so close to expiration.
    Jan 10, 2012. 10:45 AM | Likes Like |Link to Comment
  • Google Earnings Trade: Risk Vs. Reward [View article]
    okay, I get it.

    So this is even worse. Based on the current price of the ATM fly (around 4.00), how are you planning to make a profit? Even if the stock goes to the middle of your fly post-earnings, one fly will be worthless and second one will be worth around $4.00. You can wait till Feb expiration, but the chances that the stock will stay there are not big.
    Jan 10, 2012. 10:29 AM | Likes Like |Link to Comment
  • Is Apple Going To $700, Or Maybe $260? [View article]
    The targets are 12 month targets. For example, Ticonderoga set the $550 price last January - it was a 12 months target, so the stock should be at $550 if he was right.
    Jan 10, 2012. 10:25 AM | 1 Like Like |Link to Comment
  • Is Apple Going To $700, Or Maybe $260? [View article]
    Thanks for your comment brunop.
    I didn't say I'm betting against Apple. I specifically said that "I'm not taking sides here". My goal was just to show another way to trade the stock using options.

    If it was so easy and the stock was so cheap like many people say, why it is trading at $400 and not $500? Maybe $600? What do you know about the stock that others don't?
    Jan 10, 2012. 10:23 AM | 1 Like Like |Link to Comment
  • Google Earnings Trade: Risk Vs. Reward [View article]
    Erick,

    Considering those are Feb trades, even if GOOG is inside your range after earnings, the position will be very far from $25. How much could it be worth a month before Feb expiration? For example, with GOOG at 626 now, the 600/625/650 fly is worth 4.00. In this is for the fly which is right in the middle.

    btw, just checked your prices - each fly that you mentioned is around 1.75-1.80, so it's 3.50 combined not 2.50. Or am I missing something?
    Jan 10, 2012. 09:45 AM | Likes Like |Link to Comment
  • Google Earnings Trade: To Hold Or Not To Hold [View article]
    That's correct. Timing is critical for those trades - the problem is that it's very tricky to know when the IV will jump and impossible to know when the stock will move.
    Jan 10, 2012. 09:11 AM | Likes Like |Link to Comment
  • Google Earnings Trade: To Hold Or Not To Hold [View article]
    You can (and should) execute it as a single order. Just go to Combo screen, choose Iron Condor from the list of pre-defined positions and choose the strikes. Then SELL the position - it will open the screen with the order, check that this is what you wanted to do and press ok.
    Jan 10, 2012. 09:09 AM | Likes Like |Link to Comment
  • Google Earnings Trade: To Hold Or Not To Hold [View article]
    BM,

    You NEVER buy at ask and sell at bid. In most cases for 4 leg position you should be able to buy around 10-15 cents above the mid and sell 10-15 cents below the mid (for GOOG options). So for 4.45/5.70 the mid is 5.03, you should be able to buy at around 5.15.

    Try it next time you execute the trade.
    Jan 10, 2012. 09:06 AM | Likes Like |Link to Comment
  • Google Earnings Trade: To Hold Or Not To Hold [View article]
    Thank you Gary, I couldn't put it better.

    fermin, you cannot be serious by claiming that the probability of the stock to close EXACTLY at $50 is 33% while the probability to close at any other price is 66%. If this was true, the 33% of the stocks would close at the exact strike at expiration day.

    Without going into mathematics, if I buy a call, I have x% probability that the position will expire ITM. If I by a put, I have y% probability that the position expires ITM. If I buy both, the probability that ONE of them expires ITM is z+y%. It has nothing to do with the sign of the delta.
    Jan 10, 2012. 09:03 AM | Likes Like |Link to Comment
  • December 2011 Performance Updated [View instapost]
    Definitely. I'm using Interactive Brokers, 70 cent per contract. How much does fidelity charge?
    Jan 9, 2012. 10:43 PM | Likes Like |Link to Comment
  • How To Profit From Sideways Markets - An Options Strategy (Part 1) [View article]
    ph, the short options are covered by the long wings. This is NOT a naked position.
    Jan 9, 2012. 10:42 PM | Likes Like |Link to Comment
COMMENTS STATS
2,590 Comments
1,273 Likes