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| Topie: Friday, October 21, 2011 |
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| October 21st, 2011 06:10 AM |
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| membar |
Hi All,
Sorry for my radio silence the past few days. All in all, the strategies have been treating me well. Tuesday was a good day but yesterday was a sucky day which basically wiped out all of Tuesday's gains.
Today is options expiration day. My RIG puts I sold will expire worthless (presumably) and I get to keep the premium plus the handful of RIG shares I bought when RIG was around $44. On Monday, I'm going to sell $50 November puts again. My $7 FAS calls also expire and I'm going to get the corresponding FAS shares I bought called away from me, but keep the premium of $0.50/share that I got when I sold the calls. I would need FAS to tank more before I repeat this process.
I bouught a $300 January 2012 AAPL put a couple of days ago and it's already in the green. (Yesterday it was up 25%.) I'm kind of worried about the Santa Claus rally throwing a monkey wrench in this, but I think AAPL is a juicy short right now. Steve Jobs (RIP) and his reality distortion field are now gone, iPhone sales came in on the disappointing side, and I wanted to go short when AAPL was at $424, but this will do for now.
GLD is currently under $160, so I'm probably going to get assigned. Not sure whether to turn around and sell shortly afterwards or hold. My cost basis is around $161, which would include the $140 puts I bought when GLD started to tank and I got scared. |
| October 21st, 2011 03:28 PM |
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| allen314159 |
> I bouught a $300 January 2012 AAPL put.
Hey! This is a OTM option! I thought you only bought ITM, and sold OTM! |
| October 21st, 2011 09:31 PM |
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| membar |
Quote:
allen314159 wrote:
> I bouught a $300 January 2012 AAPL put.
Hey! This is a OTM option! I thought you only bought ITM, and sold OTM!
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I do both. Typically, when I sell calls, I sell ITM calls, but the long strangles I had done in the past were all with OTM calls and puts - way cheaper that way. I bought a FAS $21.67 Jan 2012 call when FAS was around $11 and you can't get much more OTM than that.
With puts, I try to sell as ATM as possible, or else ITM (like when I sold that $50 RIG put when RIG was at $44), but it varies according to my gut. So far, I've been pretty lucky with these.
An investment banker for Morgan Stanley told me after the fact and off the record that she thought my AAPL put might be a good idea. |
| October 22nd, 2011 07:16 AM |
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| nocash |
The only thing that scares me about shorting apple is that it looks obvious. Ofcourse shorting fas and faz looked obvious and would have worked well. I think the whole markret is heavily shorted rite now and might be the only thing keeping it from falling. |
| October 22nd, 2011 10:32 AM |
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| membar |
Quote:
nocash wrote:
The only thing that scares me about shorting apple is that it looks obvious.
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I "short" AAPL by buying puts, so my downside is capped.
Yesterday, the market rallied and AAPL barely budged.
Nothing is for sure, though. The Santa Claus rally is my biggest enemy, but to counteract that, I've got my FAS $21.67 Jan 2012 calls.
In fact, I see an interesting pairs trade where you do straddles or strangles with wildly different underlyings (like FAS calls and AAPL puts). I guess that's what I have, but by accident. I'm not sure how to reason about these formally yet. |
| October 24th, 2011 05:25 AM |
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| nocash |
Funny bought fas last week and had it hedged with qid, worked well but dumped it. probably to quick but was thinking of decay. How come we all knew to short fas and faz and didn't do it. Membar I still see gold doing one more nasty nose dive before climbing, anyone else have thoughts on it. I shorted a little on Friday but will cover if it breaks 166. |
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