Category Archives: options

ZB: Never above 120 again?

They are done. Finished. Toast(?) Well, $40B to go…but still, the FED announced today they are going to stop buying debt this fall.  We knew this day was coming. So did the market.  We just didn’t know when. So…I have a co-worker/friend…struggling/racing…through learning the options game.  I’m not sure if I pushed him over-bored today, attempting to explain what [...]
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Ratio Spread Greek Sensitivity Cheat Sheet

After 1000’s of option trades, one begins to have an inate understanding of how options will move relative to volatility and the underlying, as well as the passage of time.  With basic linear interpolation, and a full option table, one can approximate expected prices.  Nevertheless, there is no substitute for quantified mathematic models.  So, I’ve been meaning [...]
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Getting Really Long Oil, Really Really Soon

It’s days away, maybe a week, depends on what the dollar does. But I think…since… …the volatility of oil has collapsed: and since the curve is also collapsing… I feel it is likely a smart time to buy at least half as much 2012 crude oil call verticals, as I ever plan on owning. I’ll save [...]
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Changing Time

I’ve never put too much weight on where to cover my naked option positions…I’m going to try, holding out, to cover, when delta measured in %/% equals theta measure in %/day, on an absolute basis. That is all.
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Long the SLIP!

Its sickening to look back at the last 5 months of tape and be up only low double digits, there were many opportunities for traders and investors…it has been a ton of work to stay ahead, especially relative to how easy it would have been to be long the slippage that happens in the vehicles [...]
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For Sale: Call Option on my Condo

This is the stuff I think about.  Do you own any asset at all, where the price fluctuates with a predictable volatility?  Consider the following. I will sell, the right, but not the obligation, to buy my 568 sq foot condo, in one of the most central places in Toronto, for $275K, in 3 years from [...]
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Boosting Returns: Take The Bet, Short the Puts

Unless CCJ hits $55, or ENER hits $70, or CSIQ hits $45 (these are all >10% moves), and I take profits as planned on the July FSLR’s…all before tomorrow, and since I closed a 3 week trace on FCX…then I add 1.4% to my bottom line this month, or generated 5.7% on cash tied up…however [...]
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I invested in Tooth-Paste Today! Colgate that is…

Colgate baby. Growing world-wide middle class will likely enjoy tooth-paste, just as much as the rest of the world. I’m leveraged with a SWEET 2010 call spread. ~0.9% in time premium on an effective $65 call with capped gains at $80. 74% returns expected within 20 months. Check out my [...]
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FSLR: I’m short puts, yes, I’m a bull

Everybody always gets confused when you say you’re short puts. It’s a double negative, and it’s rightfully confusing. Let me explain. When you’re short any asset, you profit from it falling in value. When a stock goes up, or stays flat, or doesn’t fall fast enough, the puts fall in value. So [...]
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Market was Handing out Free Quarters this Morning!

JCI has fallen more than 2% three days in a row. Sucks to be me, and long. But I’m bullish in the long run. But the $30 calls for July were trading at $3.60 and $3.90 while the stock was sitting at $33.10. The gift part comes in, because the $35 calls were trading between at [...]
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