Options trade blog

December 9, 2017.
You made an options trade and the position has gone well, leaving you with a nice fat profit as expiration approaches. Now the question becomes, what do you do with these cheap out of the money option contracts you sold? Do you buy back your penny options or let them expire worthless? Are there risks…
OAP 110: Become A Better Options Trader By NOT Watching The Market.
Why do we still believe that magically someday we’ll have some inside scoop or tip that alerts us to market tops and bottoms? As hopefully rationale adults we often get lured into a false sense of understanding in the financial markets brought on mainly by the media and talking heads. Today I want to help…
OAP 109: Say Good-Bye to Unlimited Risk Option Strategies Forever.
Unlimited risk option strategies get a bad rap in the investing community among newbie traders. And while our backtesting research has shown that unlimited risk positions like short straddles and short strangles generate the best overall returns, you might be restricted in trading them because of your account type or just fear the big potential…
OAP 108: Rolling Up Strike Prices vs. Closing Out Trade – What Should I Do?
If you trade options longer than ten days you’ll undoubtedly run into a scenario where you get challenged by a stock moving either higher or lower against your position. When this happens the first question many people ask is “Do I start rolling up strike prices and adjust the position or work on closing out…
OAP 107: Interview w/ Option Alpha Member MACDDaddy & The “Wheel Selling” Options Strategy.
Today I’ve very excited to bring one of our very own Option Alpha family members on the show, MACDDaddy aka Robert. He’s been a member for many years and someone I continue to seek advice from in many areas. During the show we’ll dig deeper into the “Wheel Selling” option strategy which has created some…
OAP 106: TLT Short Stock Assignment Case Study – From Loser To $426 Profit.
As some point or another new option traders worry about their option contracts being assigned. Namely short call options getting short stock assignment. But it’s never as bad or horrifying as it may seem and in today’s latest show I want to walk through our TLT iron butterfly trade in which we ended up getting…
OAP 105: How To Protect Your Portfolio In A Down Market.
The further the markets continue to run higher, the greater the risk that another major market correction or market crash will happen in the near future. After all, as we pointed out in Show #15, the stock market has fallen 9 times at least 30% which is once every 10 years. Right now we’re riding…
OAP 104: How To Use Pairs Trading With Options To Create Smooth Portfolio Growth.
On today’s newest podcast I want to turn the conversation a bit and focus on pairs trading with options. And this isn’t the traditional pairs trading that you might have heard about before where you short one stock and buy another related stock to profit from any trending differences or divergences in the underlying price.…
OAP 103: How to Pick the Right Stock Options Strategy For Wealth Building.
Even after discussing and outlining the general process for how to pick the right stock options strategy in previous podcast and videos, I continue to get members who are confused how it should work and the steps one might take. I ultimately believe that in most cases you might be over-thinking it especially when it…
OAP 102: Are You Selling Options That Are Way Too Cheap?
When selling options, often I get a question or inquiry from members of our community with regard to how far out of the money we should sell our options and set our positions. Now, I typically target around the 70% probability of success area for my short option selling trades, but others have often wondered…

Options trade blog

Submitted by Andrew Giovinazzi on Wed, 12/13/2017 - 9:25am.
Fed still matters.
Submitted by Andrew Giovinazzi on Tue, 12/12/2017 - 3:55pm.
Morning Vol Report 12.12.2017 DIS and FOXA dance, VIX future premo is fat.
Submitted by Andrew Giovinazzi on Tue, 12/12/2017 - 9:18am.
A 9.29 VIX and vol should be cheap everywhere.
Submitted by Andrew Giovinazzi on Mon, 12/11/2017 - 3:49pm.
9.29 VIX and it feels like we are putting the holiday in to the SPX IV already. 9 VIX does put me into a bit of a buying mode so I started going through my list of names that should be at lower IVs over the next 90 days. And low and behold I did not find what I thought I would find.
Option Pit Vol Report 12-11-17.
Submitted by Mark Sebastian on Mon, 12/11/2017 - 9:11am.
Option Pit Idea of the Week: MAR.
Submitted by Mark Sebastian on Fri, 12/08/2017 - 2:22pm.
My next book Trading Option's for Edge by Mark Sebastian is now available for sale and will be shipped on December 4th. You can buy the book by clicking.
I like MAR to keep its head of steam:
Option Pit Vol Report 12-8-17.
Submitted by Mark Sebastian on Fri, 12/08/2017 - 9:13am.
Incredible shrunken volatility.
Submitted by Andrew Giovinazzi on Thu, 12/07/2017 - 5:36pm.
My best trade idea was early in the week with the SPY/QQQ pair. After talking with Mark we think the big end of year tech rebalance is over so that idea could have some legs as that sector recovers. Congress could still provide some fireworks as Dec 15 looms but nothing is really sinking the market for stocks. Maybe all the volatility is going to Bitcoin (BTC) so that could be a dampener. After all BTC is worth more than WMT so we got that going.
Option Pit Vol Report Is the Rotation Over?
Submitted by Mark Sebastian on Thu, 12/07/2017 - 8:58am.
Option Pit Vol Report 12-6-17.
Submitted by Mark Sebastian on Wed, 12/06/2017 - 9:29am.

Options Trading and Education Blog.
Morning Vol Report 12.13.2017 All eyes on the Fed.
Posted By Andrew Giovinazzi Wed, 12/13/2017 - 9:25am.
Fed still matters.
Posted By Andrew Giovinazzi Tue, 12/12/2017 - 3:55pm.
The Fed should give us more clarity on rates and their balance sheet tomorrow as Janet Yellen winds down her successful Fed tenure. On balance she did a good job walking the USA out of multiple rounds of liquidity jumps with rates somehow low and stocks at all-time highs. A neat trick for sure and it is hard to imagine anyone doing better with most economic cylinders firing away right now.
Yet find ourselves with the distracting close of VIX up and SPX up. It is hard for VIX to get much lower than the 9.34 close of yesterday so a little bounce was inevitable. Right now relatively speaking the VIX futures look a tad expensive to cash and the only reason I can think of is the rate rise is still keeping traders slightly on edge. Will Yellen push the asset unwind into a higher gear than the market expected? I guess we will have to wait.
It has been a while since we have had fuller future premium in the VIX since most of this cycle has produced cheaper VIX futures due to seasonality. A slight run up in VIX into the Fed announcement is very possible but any real trading on a move most likely will be after the announcement. Will they crush the VIX again after so many crushes in the past?
Long cheaper VXX calls or puts in this week’s cycle could work but the premium risk is high. Any vol trend into the close tomorrow should hold up through the week.
Disclosure VIX and SPX positions in Karman Line Capital, LLC.
Morning Vol Report 12.12.2017 DIS and FOXA dance, VIX future premo is fat.
Posted By Andrew Giovinazzi Tue, 12/12/2017 - 9:18am.
A 9.29 VIX and vol should be cheap everywhere.
Posted By Andrew Giovinazzi Mon, 12/11/2017 - 3:49pm.
9.29 VIX and it feels like we are putting the holiday in to the SPX IV already. 9 VIX does put me into a bit of a buying mode so I started going through my list of names that should be at lower IVs over the next 90 days. And low and behold I did not find what I thought I would find.
TWTR IV got cheap again in the near term so I bought some. I would prefer to go to the Mar cycle but I want it cheaper. The bigger surprise was a name like INTC. I thought for sure it would be at the bottom of the range but it is trading at a level closer to where it had been after the election. INTC rallied into the higher IV last year. I think it might do it again.
There is some Bank and Tech IV higher in the mid-range cycles. We have had a run up AND the jump in IV could be that both sides of a move are in play. I think IV tends to rally when a big up move or down move gets more evident and that is where the market finds itself. The rally no one saw coming is not over yet.
I like the longer term calls in INTC but they are not as cheap as I would want them so need to finance. An INTC strangle and short vol pair could work. We will cover this as a subject in Part 4 of VIX made Easy which starts on Thursday.
Disclosure: Postions in TWTR, INTC, VIX, SPX.
Option Pit Vol Report 12-11-17.
Posted By Mark Sebastian Mon, 12/11/2017 - 9:11am.
Option Pit Idea of the Week: MAR.
Posted By Mark Sebastian Fri, 12/08/2017 - 2:22pm.
My next book Trading Option's for Edge by Mark Sebastian is now available for sale and will be shipped on December 4th. You can buy the book by clicking.
I like MAR to keep its head of steam:
Option Pit Vol Report 12-8-17.
Posted By Mark Sebastian Fri, 12/08/2017 - 9:13am.
Incredible shrunken volatility.
Posted By Andrew Giovinazzi Thu, 12/07/2017 - 5:36pm.
My best trade idea was early in the week with the SPY/QQQ pair. After talking with Mark we think the big end of year tech rebalance is over so that idea could have some legs as that sector recovers. Congress could still provide some fireworks as Dec 15 looms but nothing is really sinking the market for stocks. Maybe all the volatility is going to Bitcoin (BTC) so that could be a dampener. After all BTC is worth more than WMT so we got that going.
Speaking to one of my Pro clients today and we noticed the IV is crazy low for Monday next week. Eerily almost too low, if you cogitate on it. An NFP number, a major vote and Santa Clause and I think to myself where would the surprise come next week and my guess now is to the upside. VIX futures seem fairly priced so that makes an adequate but not great hedge.
SPX Dec15/18 2655 call spreads look cheap for 1.0. One would want to be long. Cheap SPX puts could hedge.
Disclosure: WMT, SPX, QQQ , VIX positions.
Option Pit Vol Report Is the Rotation Over?
Posted By Mark Sebastian Thu, 12/07/2017 - 8:58am.
Option Pit Vol Report 12-6-17.
Posted By Mark Sebastian Wed, 12/06/2017 - 9:29am.
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