tjlocke99

Has anyone been following any of these sympathy trades anymore like the EXPE/PCLN? Thanks!

Chris, Does SPY have a similar loophole in its prospectus? If so then that could kill the Reel Ken style hedged portfolio strategy.

Any thoughts on doing a GLD or SLV Iron Condor? We also talk about how high vol environment are nice for ICs, but now we see how tough it is to take the risk when its there!

Yeah Chris that is ridiculous. Should we be extended that right to trade in the pre-market too? Frankly the whole shadow banking cartel is ridiculous. Profit like crazy and then socialize the losses. Any chance we could get the fed minutes early too?

Thank you. Where did you get that date though? I can't find it anywhere including dividend.com

Hello. I haven't seen the next SPY ex-dividend date posted. Has anyone seen this? I think the last one was Dec '21. Maybe they won't have 4 dividends this year due to loading up in 2012 for tax reasons. Thanks.

Thanks Marco! You are awesome! What were the "rules" or trading criteria you were looking at on the GOOG double calendar trade? I hunted around the site, but I didn't see much information on the details on how to filter to try and find these trades.

Tom, I was going to answer this, but I think I'll let one of the gurus handle it. On a quick note though I believe it is unlikely to get assigned if you have more trading days left until expiration because there is almost also some extrinsic value left on an option. Unlikely but not impossible because Chris has a story or two when this happened to him. When someone exercises with extrinsic value left on it they lose that extrinsic value. I know around ex-dividend dates this can be slightly different.

AAPL will have a forward P/E of around 5 now right? Apple just continues to prove that in the short and medium term you just can't judge a company purely on the fundamental metrics that the average investor has access to such as PEG, P/E, etc.

Kim, The strategy I had been using was similar to Mike in shorting options that expire right BEFORE earnings. Did you really short options expiring right after? Thanks.

I haven't been as active on this forum the last few months, but I was wondering what happened to these trades which were changing to a variant of a double diagonal where the long, long month was actually further OTM than the short, short month. Also, I haven't seen Chris posting recently. Is he still around? Thanks!

Kim, With RVX now at around 22 what do you think of opening the Feb Iron condor? Maybe with the "fiscal cliff" discussion out there its better to wait. However personally I think these analysts who are blaming the current market on the fiscal cliff do not know what they are talking about. Thanks! Richard

I definitely wish I got in on this offer when it was free. The book is close to $90 now! What type of information are you finding that is useful?

Thanks Marco. When you say highest long delta do you mean the highest long absolute value delta? I currently don't have other positions other than long stock positions and an aapl bull call spread.

Thanks Kim and Marco! I was also considering just holding all three spreads in the triple calendar another day, however with RUT back up I am too close to the 860 again. Kim if I close the 820 then I take that loss and if there is a pull back then I have less protection. That is why I was thinking of closing the 840 and then closing the other spreads when RUT moved closer to 820 or 860. I wasn't sure if there was a best practice on this though. Right now if I close all 3 I am sitting at around break even after commissions. Kim or Marco would you still recommend closing the 820? Right now that is looking at 25 to 30% loss but the unrealized gains on the 840 calls are evaporating now as well.

Kim and SO Friends, I posted this under the RUT calendar post as well, but I know not everyone will see it there. I am interested in a general practice for managing a triple calendar however I am providing my specific example below. Thanks! I am currently in a RUT triple calendar 820 Put, 840 Call, and 860 Call: long Jan 03 '13 short Dec 27 '12 I have a very small position. I entered the trade last Thurs with RUT at 828. Current the trade is slightly profitable with the 820 put down 22% though. However I have no idea how to close this. Should I close the whole trade or leg out and if so which should I leg out of first? I am thinking of closing the 840 which is up over 30% and than closing at the next available move towards 820 or 860. Thank you!

Does anyone know if there is anyway with Interactive brokers to have more than 4 legs in a spread? For example if I want to close out a triple calendar is there any easy way to do this without legging out? Thanks.

Kelly, If you do ATM longs and ATM shorts you have a traditional calendar which Kim has traded here recently and Kim has a forum thread on it. If you do a double calendar with the puts and calls ATM they have the same P/L graph, so you are really just doubling your position. If you go long a far dated position and sell a shorter dated position that is further OTM than the long than your position is a diagonal or double diagonal. I believe the difference between these pretty vanilla option strategies and the idea we were discussing is the following. You short an OTM option but you also cover it with a further date OTM long. For example: with GLD closing at 164.44 today something like: long 170 Feb call long 159 Feb put short 167 Dec4 call short 162 Dec4 put then you roll that weekly short every week. I'm not sure how the backtesting turned out, but I think this was the jist of the idea. The shorts could stay at the .20 to .25 delta as were being done with the original trade and as for the longs they are probably a slightly higher delta - maybe the .30 to .35 delta range?

When we say how often does a 5% move happen it is based on the high/low not the closing, so that makes it more likely. Certainly it happened in the summer of 2011 a few times. The other question though is how often a 2.5% or so move happens which is still a large loss. Kim, if we had a 5% move up would that definitely drop the IV?

You know the black swan has always terrified me. I look at guys like Taleb though, and I can't figure out how they really make money. If you for 5-7 years take 15% losses betting on a black swan all the time that will add up and bleed you to death. You can never invest 100% in gamma/vega plays or you'd go broke. If you play 20% of your portfolio on calendars and: 1. Over the course of 6 months you have 100% Rate of Return (a 20% gain) on your ICs and calendars. 2 at some point you lose 95% of that in some crash than you have lost 19% of your portfolio. You still come out slightly ahead. So as Kim and others have pointed out. Position sizing is key. Obviously it has worked well for Mark W. Although I posted a question on what happened in 2000, 2008, flash crashes, etc, and never heard back.

Good luck Mike. One thing is for sure. There are some great members on this site, and Kim is a top notch honest guy. I just wish I could find a gamma strategy that worked for someone who can't monitor during the day!

maybe its better to take the opposite trade on those volatile stocks! what stocks would you consider less volatile? Exxon, Walmart, IBM?

Mike, How could you get called out below your original buy price? Why would that happen?

Mike, I personally work full time during the day (not that trading isn't work of course) and can't get to a terminal except maybe once a day during lunch, so the earnings trades have not worked for me. I stopped even trying them a long time ago. However I have done some of the calendars successfully, and only trade about 20% of my portfolio now and keep the rest in dividend stocks or covered calls. I was even considering writing covered calls using ITM leaps to ensure a relatively save few % rate of return. Also, I think what Kim has noted, if we get some 2 SD price swing one day you could very large ROR. Those events are not as rare as they sound Good luck.

Thanks Chris. Chris, I also think the slippage is not as bad in absolute slippage (obviously not as the percentage of the overall trade). This is NOT a minor point. I have tried to close an XOM and SNDK DITM strangle for a few days and can't get executed even .10 off the mid! Is there any possible trade that could be added to this to protect against a 2+ SD move in the underlying? I know it'll cut into the P&L, but I personally don't have alot of gamma exposure.