ammarmalhas

What are our plans for this play, I hv the 158 Sep/Aug calendar? I bought the calendar at 2.05 net, rolled the Aug 17th for Aug 24th for 0.55 credit. I think my cost is reduced to 1.50 and since the calendar is now around 1.79 then i am 0.29 up. Should I sell?

Kelly, I am sorry to hear that but I believe things will normalize soon; soon being a couple of years or so. It was bad on all of us. My 2008 loss was almost 70% of my worth! I still have properties here in Jordan, prices are holding but there are no buyers! What I do not understand with the US government and immigration is why don't they offer a program for immigration to the US for those who buy houses and maintain (of a certain size)? They must have thought of this! I did! This can surely cause a HUGE demand and may help resolve some of this mortgage and housing problem that destroyed the world, not just the US! Think of it! If they offer this, I believe they will have at least a million applicants willing to buy housing in the US and this will drive the market up and solve many problems. I am not sure of the size of the housing problem (quantities of foreclosures and houses with bad mortgages), but it could be a beginning. Furthermore, those who can afford to buy housing in the US will not be a burden on the social security, welfare and medical systems already in slight trouble. Just a thought! (By the way, I am one person willing to do this wholeheartedly) We are gearing away from the topic of the forum, sorry!

Can you guide me to a newsletter or site that keeps track of the general trend of the market on a daily basis. I want to be informed on what the markets are trending technically. Thanks.

Kim & Chris, You two are great. Simple fact. I am starting to read and I know it will take me a long time, I am not sure I have the energy to go through all this, but I will try. I am stuck invested in long term equity in C, GE, ALU, FNMA and also have a fairly large options positions (leaps) on these and on BAC, FB, S ...etc. I am starting to think I probably should liquidate (slowly) and put my money in land and development, which is what i know best! I am staying put, and I am reading and reading and looking forward to all your comments. i will keep trading the SO way and I hope for the best. Whatever happened to "long-term" investment in good companies? GE, Citi, BAC, ALU, S, FNMA where among the best that ever was, they are in trouble now as is the whole market, but is "long-term" investment dead? Are Warren Buffet's views on buying good companies and holding on to them an "old fashioned" style that no longer works? Bless your heart guys, it is GREAT to know you are out there supporting us.

I just started, thank you for the tip. It is however, 200 something pages long and a few tips from the masters here will help.

Kim & Chris, Indeed these are great posts and very insightful. I would like to add my share to these two posts and I ask to be excused, upfront, for my blabbering, but I have to get things off my chest, before I burst ! These two posts up there seem to mostly address day-traders who think they can create a system of their own to beat the markets, they also recommend what not to do when trading ...etc. Most of us here, I think (!), are simple traders trying to make a few bucks off the knowledge of more experienced traders with math degrees, computer science degrees and even law degrees. Most of what is in the two posts does not fit me, personally. For sure i will not go learn Java, C++ or Quantum Physics! I do not know how any of these might ever help me "guess" the markets or even analyze them! I have become more aware that we tend to review "history" of trades and build upon "previous" trades but there are too many variables to consider and I do not believe it is as simple as that, and hence I do not see myself able to do it. We, here at SO, concentrate on "volatility" and in a sense that is the measure of "people's uncertainty", the more confused the people are the higher the volatility! I may be dead wrong but the markets in the last decade or more have turned into a chaotic place where retired old ladies, cab drivers and the likes of me, with a $100 bucks of spare cash trade and discuss the future of AAPL, GE, CITI, S, FB ...etc! This was and is not healthy and it was bound to crash and it did in 2008/2009 without any real warning and took most of us, "experts" and novice like me, by COMPLETE surprise. How do we protect ourselves against such crashes and such uncertainty, is the "million dollar" question and the holy grail of trading (or investment). Personally, I have a large long-term equity portfolio which suffered well over %60 loss during the fallout of 2008/2009 even though I was invested in excellent world-renowned funds run by "expert" economists and financiers and in "safe" funds designed to maintain my fortunes and provide some nice returns for my retirement, no high-risk quick-buck funds! Look where I am now! I have completely lost trust in all the financial institutes I have dealt with, and they were a few, I now believe that all financiers and economists know as much as I do about markets, basically NOTHING! No one can predict the markets and no one ever will. There is now so much "sentiment" driven trades world-wide of such a large variety of people with institutional investing seemingly holding a minor share in the overall market, and that is the recipe for disaster! Again? This is what I "feel", and as I said, I know NOTHING. Anyway, both posts emphasized the "risk management" aspect of trading and recommends we all do it and make it our priority, GREAT. We must all do it. Now, what the heck is it? How do we do it? Can you guys please give us a detailed example of how one manages the risk of his trades and his whole portfolio and protects against bad trades and bad market moves? I understand that I must have a risk management policy and I must abide by it, but I have no idea how to set one up. Please do not tell me to Google it , so far I got to a point where I am trusting both of you, your know-how is apparently vast and the way you trade is evidently safe, systematic and cautious enough for me to want to follow you guys and grasp your advices and learn from you. So, please guide me. Bless you all.

I sold the Aug 24th strike 158 at 0.65

Chris, I am selling 158 Aug 25th weekly @ 0.67, since I had bought back yesterday @0.1, if I can then I will have effectively rolled @0.57 I am not bragging :-) but it looks like it was a logical move.

Thank u Chris I have bought back the short 158 call contracts for 0.1. I am now waiting for tomorrow for the new weeklies so I can sell next week's 158. (I have am essentially rolling in two days). I do not really know why I did it, except that I am playing around with trades trying to understand what happens, and perhaps I should have waited till tomorrow and did a roll then, I may have saved myself a few pennies, but on a few contracts it is not worth it.

With GLD at 155 our Aug 18th Calls are now at around 0.11. If GLD remains around 155 by Thursday, the Calls will be worth less than $0.05 (if I read the Theta correctly). The next week's weekly will come in play Thursday. I am sure u would wait to see the figures on Thursday and then decide to roll or wait till Friday. I know that selling the Aug weekly (next week's) on Thursday should get us more than doing so on Friday, but buying the Aug 18th calls on Thursday will cost more than doing so on Friday (or letting them expire). So one would compare the cost of closing (buying back) the Aug 18th Calls and selling the next week's weeklies on Thursday vs doing so on Friday, using the Thetas to estimate what the Friday net credit would be! All this assuming GLD remains at 155. Is it this simple? Now, how does the underlying price movement affect these prices on Thursday and Friday? (delta, gamma, VI ...etc.) How do u really decide what to do? The calculations and assumptions seem to be very complicated and we will have to guess the underlying price movement and then we are no longer non-directional. I do not know if I am confusing several other friends here, but I surely got myself confused

Thanks. I'm with u. Good luck.

Well I'm in @ 2.03. Pls keep us posted of ur moves

So do we follow u in? :-) at 2.04?

I also read Sep 2.5% more volatile than Aug!

This is for Call options right?

what i usually do is place limit orders as soon as Kim announces intention on trading something. I only do so for the plays he thinks are "not too expensive" or cheap". It has worked so far and if ever a play is cancelled by Kim or others who see it not so great, then sell, take a minor loss and move ahead. I also cannot attend to mu computer more than an hour a day and at different intervals. Good luck.

Jesse, a name would help us to evaluate on our own. I do not see why Kim would object, he himself mentioned the guys at NextOptions, a few times, whom I tried and like. As long as we open a separate topic for this, I see no harm. My opinion, of course.

Thank u Kim for your honesty.

Guys, I need help placing a limit order (stop limit) on the SPY Jul 21 strike $136 straddle. i want to place a stop limit at $3 and sell at market if the price goes down to the $3 stop. How do I do that in TOS? Seems triggers work on one leg only! (I hope I am posting at the right forum) Thanks

Let me understand this correctly "it's a lot better than TD AM's normal ripoff rates."! I trade with TD AM since over 4 years now and I pay $9.95 per trade and $0.75 per contract (not $75 but $0.75) on all option trades. If one is dealing in 1, 2 or 3 contracts, yes the $9.95 may be around %5 of the value of the trade but with larger number of contracts per trade and costs running in the $1000's range (and above) $9.95 is less than %1 (%2 both ways)! So what is the big deal and why would u call these fees "rip-off"? My bank/broker was charging me $0.1 per contract meaning $10 per contract, imagine that! I remember I had to let some call options I owned expire because their price was $0.09 ($9 per contract) and that was less than the commission I would have paid!

looks like it is a "public" demand dear Kim. How about writing a step-by-step guide with examples of each type of trade u use here Straddle, Strangle, Iron Condor, RIC ...etc with explanation of the "logic" used each step. I am sure u have explained this several times already and I know u wrote some nice "quick" articles about the subject, but we still lack a comprehensive detailed all-in-one-place explanation or mini course. Thank u in advance. Kowski, we are in the same boat :-)

Thank u Marco. Bit by bit, I am beginning to understand some of this. It is a lot to grasp in a few days or weeks even! Thank u all for ur patience.

Your writings above are very informative. May i ask u to kindly put similar short explanations with each trade u open and close, so we can learn properly and understand ur thinking and how things should be done. It may be boring to others who know what is going on but it will be tremendously helpful for the likes of me :-) As always, thanks a million for the kind help.

Kim, u say "One way to hedge yourself, at least partially, is opening the next trade slightly delta negative", with this do u mean the next trade on any stock or the next trade on the same underlying stock? How can u have a neutral delta of a portfolio when each delta is very stock specific and the IV of each stock or option is specific to that equity. The volatility of say IBM is not related nor similar to that of say HOG nor are the deltas of the two or any other Greek related!!! So a when ur 50 straddle becomes more positive how can a negative delta on another stock balance ur portfolio? The 55 can reverse and the new trade can also lose!!! U can lose or win on both trades as they move separately in the same direction or opposite or even stay put. I must be getting something wrong here? Am I not?