A tough day for my long calls today. I added 4 more positions, all calls, to my portfolio. 15 underlying's in total now. P&L is up slightly at +$22, however, this is mainly due to the gains from the $CYH strangle. Only 4 out of the 15 are profitable (26%) so I'm lucky the losses aren't worse.
|VIAV Long Call||24-May-16||16||-30|
|CYH Long Strangle||25-May-16||15||210|
|HBI Long Strangle||31-May-16||9||-65|
|ANF Long Put||31-May-16||9||34|
|RF Long Call||1-Jun-16||8||-40|
|ATVI Long Strangle||2-Jun-16||7||-8|
|CY Long Call||2-Jun-16||7||-38|
|GOGO Long Put||6-Jun-16||3||-30|
|VLO Long Put||6-Jun-16||3||34|
|RBS Long Call||8-Jun-16||1||-20|
|WLL Long Put||8-Jun-16||1||0|
|PBI Long Call||9-Jun-16||0||-40|
|GGAL Long Call||9-Jun-16||0||-10|
|MT Long Call||9-Jun-16||0||-25|
|PLD Long Call||9-Jun-16||0||50|
Unbelievable volume going through the $7 strike for $RBS!
The entire June and July months only have 2,700 outstanding open interest combined yet 80,000 contracts traded through the $7 strike price. 40k in June and 40k in July.
However, both implied and historical volatility is fairly high at 55% but the volume traded is very significant.
Still, I am placing an order to buy the July $7 strike. I will keep you posted on the updates.
Long $11 Calls in $CY and Long Put Spread in $ATVI.
Bought 10 calls of the June17 expiration in $RF on the open. There is massive interest in the $10 strike that I noticed in my option scans. Only two and a half weeks to go but the volatility is relatively low.
Bought 10 $7 June17 call options on VIAV due to a volume alert on the option scanner. So far, the stock's path is picture perfect.
In total I made $169 in profits using around $1,000 in risk capital for the trades closed out on the May expiration.
I took positions in 12 stocks for 14 trades in total, as I made two adjustment trades in MRO and ETE. VALE was the biggest winner with a gain of $360 and the biggest loser was EMC, losing $160.
Massive volumes went through the $8 puts in the weeks leading up to Lending Clubs dismissal.
Net P&L continues to slide, down after today's session to -$110. Not much action on the options currently showing gains and the options that are out-of-the-money continue to bleed value due to time decay. The lesson for these type of earning announcement trade ideas is that I should get out in the days post announcement instead of waiting for option expiration.
I took on a new position today; long $10 HIMX call, which expires this week. They release earnings Thursday.
Open P&L -$110.
|EMC Long Put||13-Apr-16||26||-140|
|ETE Long Call||19-Apr-16||20||155|
|MRO Long Call||19-Apr-16||20||-71|
|KEY Long Call||20-Apr-16||19||-72|
|MS Long Put||20-Apr-16||19||-65|
|VALE Long Put||21-Apr-16||18||153|
|JNPR Long Put||21-Apr-16||18||-24|
|KMI Long Call||28-Apr-16||11||-92|
|IPHI Long Call||29-Apr-16||10||-45|
|NG Long Call||29-Apr-16||10||-60|
|MRO Short Call||29-Apr-16||10||52|
|CTL Long Put||2-May-16||7||95|
|HIMX Long Call||9-May-16||0||4|
Full list available from Option Scanner Pro
As options approach their expiration date, their value can erode quickly. If you're long out of the money options then this effect can be quite dramatic; you can lose money even when the market moves in the right direction.
HRB Stock tanked on Wednesday the 27th after the company reported a disappointing tax season. Outlook remains bleak for the stock and their next report is due out in June.
However, it appears someone knew of the pending downward move in the stock.
Option scanning tools showed that the $23 put option had significant volume trade the day before the stock plummeted. 19k options traded through one strike, which saw the puts outnumber the calls traded by 5 to 1. The next day, HRB drops 13.56%.
The Puts rose 386%
Delta measures the theoretical change to the value of an option as the underlying changes. This means the option's value is tied to the underlying by the amount of "delta" the option theoretically has. Traders can then offset the risk of the opiton by trading an appropriate amount of shares in the underlying security
The Binomial Model is the model of choice for American styled options - that is, those options where you can exercise any time up until the expiration date. Even though Black and Scholes was the original option pricing model, the Binomial Model is probably more widely used than B&S.
There's lots of programs out there that will charge you a monthly fee for a calculator that prices up option contracts. Not here!
I've put together a little something in Microsoft Excel that just does this, plus prices up all of the Option Greeks.
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