Seeking Alpha

DerivStrategies'  Instablog

DerivStrategies
Send Message
DerivStrategies.com is your source for traditional and binary options strategies, education, and insightful commentary. DerivStrategies is also the home to The Binary Options Weekly, a weekly report focused on advanced hedging strategies, key catalyst discussions, and breaking news surrounding... More
My company:
DerivStrategies
My blog:
DerivStrategies
  • Binary Options Trading Monitor for July 16, 2010: BP and VIX Call Buying  1 comment
    Jul 16, 2010 4:56 PM | about stocks: VIXX, BP

    The Binary Options Trading Monitor highlights traditional options trading of the underlying assets currently available on the leading binary options trading platforms. With a focus on short-term activity, binary options traders can use this intelligence to gauge stock sentiment and help assess potential stock movement in the coming weeks.

    Notable Options Trading:

    BP PLC (NYSE:BP) – Bullish: A bullish call spread in BP was purchased this morning with the investor buying 2500 August 35 calls and selling 2500 August 40 calls. The investor paid roughly $2.60 for the spread suggesting belief that shares of BP will trade above $37.60 by August expiration, an increase of only 1.4%. Potential loss on the trade is capped at the premium paid $2.60 with a maximum potential profit of $2.40 should shares of BP trade at or above the $40 level upon August expiration. BP binary options can be traded on the EZ Trader platform.

    CBOE Volatility Index (VIX) - Bullish: Over the last week we’ve highlighted primarily bearish flow in VIX options with investors increasingly purchasing July and August 25 puts. Well sentiment seems to have changed today as buyers of upside calls emerged with traders targeting August 35 calls as the strike of choice. An over 2% drop in the market on a Friday afternoon tends to make investors fearful for what news the weekend will bring.  VIX binary options can be traded on the Anyoption platform.


    Binary Options Weekly:

    This week in the Binary Options Weekly we follow-up on our discussion of how binary option traders can take advantage of patterned stock movement during the last few trading hours of traditional options expiration by providing a list of names to watch closely during this month’s expiration for pin risk strategy implementation. We provide detailed steps on how to potentially profit off this pinning behavior. In addition we discuss recent options flow and how this trading can possibly be a sign of things to come in the markets over the next few weeks.

    For daily Binary Options Trading commentary/strategies and to receive your free subscription to the Binary Options Weekly, please visit us at www.DerivStrategies.com.

     

     




    Disclosure: No Positions
    Themes: Binary Options, Volatility, Energy Stocks: VIXX, BP
Back To DerivStrategies' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • ArtuM
    , contributor
    Comments (5) | Send Message
     
    Your investor's BP move sounds good... for now :)

     

    I usually do 3 months spreads both ways:
    in BP case I would buy 3 months debit Call spread:

     

    BP101016C00035000 5.45 Down 1.25 5.35 5.45 367 8,662 35.00
    BP101016C00040000 2.89 Down 0.71 2.87 2.91 1,626 21,258 40.00

     

    I have to pay for it: 5.45 - 2.87 = 2.58

     

    and sell 3 months credit Put Spread (i.e.., Sell Oct. Put 38 and buy Put 33):

     

    33.00 BP101016P00033000 2.50 Up 0.57 2.50 2.54 907 8,017

     

    38.00 BP101016P00038000 4.60 Up 0.95 4.55 4.65 268 2,701

     

    I receive: 4.55 - 2.54 = +2.01

     

    TOTAL from both spreads: +2.01 - 2.58 = -0.57

     

    If BP moves deep one side or another, I buy back the leg which -> 0 and have time to wait for comeback :)
    ____________

     

    Could you really put trad. options and binary options "in one bed"?

     

    After couple days of trading with demo accounts, I see binary options as form of day trading which you can accomplish with MT4 or actually any other trading platform. The use of terms CALL, PUT in binary options field has different meaning than in trad. options trading.

     

    Binary options don't have the spread opportunity you wrote about in BP case...
    ______________________

     

    THANK YOU for helping me out to set up binary options demo account. It helped me to get the feel of the "new kid".

     

    Binary options has my vote, but it still is in an infancy stage, lots of non-communication and other stuff is going on. The fact that CFTC got involved with NADEX.com brings hope for more stability in the field.

     

    I have to commend you and your posts for explaining you do with binary options and trying to bridge them with trad. options. That's tough! I am interested to continue our conversation in the forum and personally.
    17 Jul 2010, 03:30 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.