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Hari Swaminathan
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OptionTiger.com is founded by Hari Swaminathan, an entrepreneur, everyday person and a self-taught Options trader for over 5 years. Hari also writes the blog at OptionTiger.com, an insightful commentary of the most important issues in macroeconomics, investing, trading, Option strategies, Index... More
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  • SPX And SPXPM Options

    This post was originally written on July 16, 2013 at http://www.optiontiger.com/spx-and-spxpm-options/

    You may have heard of SPX and SPXPM options. They are both Options on the S&P 500 Index. The SPX is the regular version, and the SPXPM is a variant that expires at the close of business after Thursday. Whereas the SPX Options close at the opening print on Friday.

    You may have noticed if you're trading the regular SPX Options that Options don't lose all their value after close of market on the Thursday of expiry. Although they don't trade on Friday morning, the closing print for the SPX options depends upon the opening print for all the S&P500 components on that Friday morning. This is obviously risky because the next morning could be (and often is) a whole new day, and the SPX final expiry print could be vastly different from the previous day's close. Secondly, the final print has to wait for all the components to trade, which could take upto 12 noon or more on Friday. Not only are you left guessing as to the final print, your margins are stuck, with no way for you to get out of the trade. Hmm…Not a good place to be.

    So the alternative to this problem is - SPXPM. They expire on the Thursday after market hours, so there is no guesswork on the final print.

    What are the cons of the SPXPM ? It's mostly the Open Interest. Check out the two graphics below for the SPX and SPXPM Options in the August series with 30 days to expiry.

    SPX Open Interest is much more by a magnitude of 1000. But if you're okay with the low Open interest and want to take up small contract positions (5 to 10), you should be fine. The Bid-ask spread seems to be similar in both cases.

    SPX Open Interest

    SPXPM Open Interest

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 19 9:35 AM | Link | 2 Comments
  • Tesla Motors (TSLA) Gets Some Respect

    This post was originally written on July 9, 2013 at http://www.optiontiger.com/tesla-motors-tsla-gets-some-respect/

    As of next week (July 15th specifically, Tesla Motors (NASDAQ:TSLA) is finally getting the respect it may deserve. TSLA enters the Nasdaq-100 (NDX Index) on that day, replacing Oracle (NYSE:ORCL), which moves to the NYSE.

    TSLA's market cap is $12B, no chump change. However, critics have arguably not given it the respect many say it deserves. And the stock itself has suddenly burst into the scene, and in the last 3 to 4 months, has been one of the biggest movers in terms of Average True Range (about 8 to 10 points per day).

    To be clear, TSLA is far from profitability, and general consumer perception places their cars in the "exotic" category, something the company may have worked on intentionally.

    But the cars are stylish, have serious performance and most importantly, are 100% battery-run. You've gotta love that..

    As for the stock, this could be a boost since index funds are bound by their charter to add new entrants to their portfolio. Short-term BULLISH…

    Do you trade TSLA ? Let us know. If you don't, you should look at the Options. It's definitely one of the more exciting, tradable Options right now…

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 09 10:35 AM | Link | Comment!
  • Free Webinar On Iron Condors

    This post was originally written on June 26, 2013 at http://www.optiontiger.com/free-webinar-on-iron-condors/

    The Iron Condor is one of the most popular strategies in Options trading, and for good reason. The Iron Condor has several attractive features.

    But how well do you understand the Iron condor ? Join us on this Free webinar on Friday at 1030 am.

    We'll discuss the good, bad and ugly of Iron Condors.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: options
    Jun 27 6:58 AM | Link | Comment!
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