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Showing content with the highest reputation on 01/17/18 in all areas
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According to the story, the trader has consistently purchased bite-sized chunks - usually costing around 50 cents - of VIX options contracts betting on a spike in the CBOE Volatility Index. Also known as the VIX, the gauge is a measure of expected price swings in US equities that serves as a barometer for investor nervousness. It generally climbs as stocks fall, so purchases of VIX contracts translate to bearish wagers on the S&P 500. On a year-to-date basis, that persistence has resulted in a whopping $197 million mark-to-market loss for 50 Cent, according to data compiled by Macro Risk Advisors (MRA). The firm reports that the trader has spent a total of $208 million on VIX bets, only to see the majority of them expire worthless. Despite the dogged effort exhibited throughout 2017, 50 Cent seems to be losing steam. After reaching a maximum outstanding position of more than 1 million contracts over the summer, the infamous volatility vigilante currently only has about 200,000 in play, MRA says. Background The CBOE Volatility Index® (VIX® Index®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Considered by many a "Fear Index", the VIX represents one measure of the market's expectation of stock market volatility over the next 30-day period. VIX cannot be traded directly. However, traders can trade VIX futures and VIX options and also some other VIX related products, like VXX. So what you can do when you believe VIX is cheap? You can buy some calls or call spreads on VIX futures, betting that VIX will go up. After all, when VIX is at 10-11, how much lower can it go? Here is the problem: since you buy options on VIX futures, not VIX, those futures will usually be priced higher than the spot. If the spot is 11, the futures can still trade around 13-14 or even higher. However, over time, if VIX is stable, the future will drift lower, causing those calls or call spreads to slowly bleed money. This is exactly what happened to 50 cent trader. To be fair, 2017 was a very challenging year for volatility traders. VIX stayed at historically low levels much longer than anyone could reasonably predict (see the chart above). It spent most of the year around 10-11 levels. This is unprecedented. Trades that worked very well in previous years stopped working in 2017. This is why it is so important to adapt to continuously changing market conditions and not stay stagnant.1 point -
Depends how it opens I think... is entry tomorrow? I am busy in the morning... Hm...1 point
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These are on my list to check for coming days. Need to check charts and confirm earnings dates though.. Earnings Date Trade Date Month Wk Stock Strategy Days Before / After Trade Exp. Days Win Loss 1/22/18 1/19/18 1 3 NFLX 3 Days Pre, Long Call -3 NFLX: Buy 40 Delta Call 7 8 0 1/17/18 1/19/18 1 3 SCHW 1 Month Post, Short Put Spread 2 SCHW: Sell 30 Delta, Buy 10 Delta Puts 40 11 1 1/30/18 1/27/18 1 4 GLW 3 Days Pre, Long Call -3 GLW: Buy 40 Delta Call 7 7 1 1/23/18 1/20/18 1 3 STT 3 Days Pre, Long Call -3 STT: Buy 40 Delta Call 7 7 1 1/30/18 1/20/18 1 3 EA 14 Days Pre, Long Call -10 EA: Buy 40 Delta Call 30 4 0 1/24/18 1/21/18 1 4 TEL 3 Days Pre, Long Call -3 TEL: Buy 40 Delta Call 7 5 0 1/31/18 1/21/18 1 4 MSFT 14 Days Pre, Long Call -10 MSFT: Buy 40 Delta Call 30 7 1 1/31/18 1/21/18 1 4 FB 14 Days Pre, Long Call -10 FB: Buy 40 Delta Call 30 6 2 1/29/18 1/22/18 1 4 GGP 7 Days Pre, Long Straddle -7 GGP: Buy 50 Delta Calls, Buy 50 Delta Puts 7 4 0 1/25/18 1/22/18 1 4 POT 3 Days Pre, Long Call -3 POT: Buy 40 Delta Call 7 7 1 1/25/18 1/22/18 1 4 WYNN 3 Days Pre, Long Call -3 WYNN: Buy 40 Delta Call 7 5 0 1/18/18 1/22/18 1 4 BK 1 Month Post, Short Put Spread 4 BK: Sell 30 Delta, Buy 10 Delta Puts 40 11 11 point
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Closed remainder for 5.20. Altogether, in for $1.75, Out for avg $4.138. After commissions, a gain of 134.8%. And even I feel bad for closing parts of my trade too early...1 point
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Closed 1/2 at 3.55. Will close the other half later today1 point
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Out for 2.19, just over 50%. Didn't see it continuing the mad dash, decided to take profit. I'm in the official MSFT straddle, so I plan on waiting for a pullback to enter MSFT long call. I'm very delta positive right now on MSFT. BA has moved up strongly today already, so I'll either enter EOD, on a pullback, or wait for a shorter play.1 point
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It's a PE 14-1 http://tm.cmlviz.com/index.php?share_key=20180117145254_u90YRkkIUw0IPAZy1 point
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Just FYI. I forwarded this conversation to Kosta (Lead dev for Tradehawk). He's going to prioritize this and said it shouldn't be hard. He plans to auto-populate the remainder of a partially filled order into the order screen when you hit cancel so you can adjust and hit send right away.1 point
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A couple of comments related to this: For me the RV chart is the most valuable, and always will be. IV (and therefore RV) changes have closer to the same pattern each earnings cycle for the most part (more predicable). Stock price changes leading into earnings is much less predictable and just because a stock moved a lot leading up to earnings in one cycle doesn't necessarily mean it will this time. Entering trades at good RV levels with short strangle sales covering/exceeding the typical RV decline heading into earnings days is the top criteria for trade entry, IMO. The tool already has the option to display the stock price movement for prior cycles. If there is another chart of straddle performance tracking a straddle at price xxx over time, then the results can be misleading at times: I know the intent is likely to track gains due to stock price changes (gamma), but when looking at a chart like this straddle changes due to IV changes (vega) would not be readily apparent. If the trade was entered at higher IV, then straddle could show a loss even though stock price moved. Conversely, if trade was entered a good RV then straddle could show vega gain even though stock price did not move much. And vega could be an overall market thing and not stock-specific (so not repeatable from one cycle to the next). Bottom line for me is that having a chart showing past straddle price changes over time is fine... but not being able to tell how much of the change is due to gamma, vega and theta makes it not very useful to me for making a trade entry decision. Having such a chart certainly won't hurt (the more data the better), but the RV chart is the most important for trade entry decisions with the other charts providing more background.1 point
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