Thaze

Anyone got any idea on how to take advantage of the extremely low VIX currently? I'm thinking it might jump back up here in the next few weeks as we approach the debt ceiling.

I grasp the general concept behind the strategy (new to calendars on the VIX), but even with the net credit you would make on the 17/17 calendar, wouldn't choosing 16 be more optimal to increase odds of success? More likely for the short option to expire worthless at the shorter strike price, even it does cost a small net debit. Not used to trading the VIX, so I'm sure I've overlooked something along the way. Quick Question: Where did the 150 margin requirement come from? Is that just standard on all IB VIX calendars?

I trade SODA already and have a pretty decent track record. Buy under 36 and sell for 37-38... Stock seems to have good support around those levels. Edit: Herbalife may be worth looking into for this strategy (needs reviewing).

Lesson learned this time for sure - No stop losses for sure... I got out for a 47% loss while you all made off with a nice profit (not hating or anything, just stating my lesson was learned the hard way). I'll be ready for the next round though

Anyone thinking about buying puts if it hits a certain range?

Forewarning, I know this may sound a bit "noobish", so please forgive me as I am still learning the condor trades. How did you calculate the value the option would be worth in 28 days from now assuming the price stays at the current range? I know its related to the greeks (obviously), but if its not too much to ask, could you write out the formula used at the time of the trade for myself and others to see? Also, how do you calculate the 2SD movements? Sorry for all the questions.Thanks Chris.

Thanks for the consolation. We win some and lose some, so lets just hope some others make up the loss. Learned my lesson to lower my allocation next time.

I think it should be a good trade for those willing to hold, but after this selloff and loss from today I think I might skip out on re-entering. Best of luck to everyone else.

I over-allocated and got smacked for it, lesson learned. Oh well, positive spy calendar trade has offset the majority of the loss.

Not currently - Might try to but I doubt it... Had my stop set @.95 and the massive sell-off caused a MASSIVE drop. Stop loss got screwed and ended up cashing out a .65. Think I'm gonna stay away from the short squeezes for now, that was painful. 41.7% loss in 10 minutes, FML. Go figure the 10 minutes I'm away to eat is when the sell-off would occur.

Shorts had a massive sell-off from 13.25 to 12.30~ and my stop-loss kicked in and killed me on this one. OUCH. Another important lesson in portion sizing.

Followed @ 1.10 also. Ended up skipping the OMX trade due to the wide spreads.

The short float is the percent of shares that are shorted. Short sellers sell borrowed stocks at market price assuming a future price decline to buy back at a cheaper price, keeping the difference as their profit. For example, SKUL has a short float of 70% - meaning 70 out of everyone 100 shares sold is being sold short.

I really appreciate the help, had no idea about finviz. That should help quite a bit in the overall screening process as the majority of the trades I was playing were found manually searching and based on my gut.

If you don't mind me asking, just out of curiosity, how do you find these trades Eric? I find a few every once in a while, but you seem to come up with 10x as many as I do. Any special guidelines you look for when entering these trades or are they just based on gut feelings?

Yes, that is what I meant, sorry about that. I'm thinking it might have some potential, so I'll look into it and see what I come up with. Thanks Kim. Edit - Just looked at the IV values and they are pretty low as it is (on the monthly), currently sitting at around 30% on each option. I would assume they couldn't drop too much lower. Whats your thought on this Kim (or anyone else)?

Thanks for the spreadsheet xfan, I've been meaning to make one for quite a while... I've been lazy and just writing them down on my paper trade journal rather than making a spreadsheet. Much appreciated .

What about using a condor to capture any movement either way? If the stocks fails to jump alot, we can still cash out for a very minimal loss + commission.

Usually most of these picks come from just spending a lot of time researching, unfortunately there is no "special website". The one thing I do often do is use the IB most active scanner and look at the biggest drops for the day and then scan through those for potential plays. That was how I found the PAY play for the bull call spread. I'll look at the big drops, look at the reason they dropped, and decide if it was a rational drop or a scared selloff. I also agree on AAPL, there is definitely a play to be made here, not sure how I want to do it though. I'm thinking about a condor possibly to capture the movement either direction.

Due to the significant drop in todays price (but increasing IV), are we still looking to do this trade with smaller strikes? Say maybe a 685 or 690 strike, give or take a few points...

Forward notice: Sorry for the fast response as I am getting ready to head to the gym. Other than option plays and plays on dividend stocks like these, most of my money goes towards "value stocks" usually. I also like to buy into companies that have exorbitant drops for miniscule reasons, predicting a rebound. Two recent examples of these in my opinion (that I personally hold) are ZAGG and PAY. Zagg recently dropped 20% due to the misposting of earnings (saying they had missed, when in reality they had hit them dead on) and the strong short interest took advantage of the sell-off. In addition to this the CEO was recently fired because he used his shares of Zagg as "margin" in his personal account, causing the stock to drop another 10%~. These are some huge drops that were not caused by true fundemental issues that I do not forsee causing an issue long term, not to mention the potential benefit they will get from the release of the IP5 this week. In addition to this, you can recieve pretty hefty returns from covered calls on these shares. PAY dropped 16.5% last Thursday because they had came up short on their wall-street guidance. This was caused because the company had their repair factory burn down, causing revenue to come up shorter than expected. This is a short term loss that will be corrected (in my opinion) after things are reconstructed and go back to normal. I saw this and purchased a long 30/40 Bull call spread on the stock Thursday afternoon. Needless to say, the following morning the stock was upgraded and jumped back over 6% of the loss from the previous day. I feel as if this trend will continue and still has pretty good prospects overall. Thats a general drist of what the rest of my money goes towards currently. I'm currently looking forward to hearing more back from Chris is his upcoming column on 2SD condor trades and working my way into those in the near future (hopefully)

Just out of curiousity fieldydwb, I understand the strategy (and use it myself occasionally), but how do you decide when to buy the stock to sell before ex-div? This is where I always struggle when using this strategy as it leaves you open to big market swings. Do you have a set time-frame you look to purchase it at? A week in advance, a few days, etc...

Welcome Chris. I look forward to reading your articles on your 2SD condor trades (and all the others) .

By selling the day before ex div you can usually get a larger premium from what the stock is actually worth, then buy back on ex div for a cheaper price and then capture the dividend next cycle. The other option is that you can rinse and repeat the original strategy and sell the day before ex div and buy back on ex div day to capture the gain in underlying stock price fluctuation. Please correct me if I am wrong fieldydwb.

My experience with SO has been one in which has really stood out to me, as I am sure it has to many others. Its a very rare occasion in this industry to find a mentor as caring, professional, and transparent as yourself. You have shown your willingness to go above and beyond to help members in any way possible and I am very grateful to be a part of this community you have built. The fee paid to be a part of this community is well worth the education alone, much less the additional profits often incurred. I personally appreciate everything you have done and look forward to being a member for quite some time to come. Thanks for everything Kim.