=Jan 18, 2013
How are you? I was away from these markets since Dec21--- vacation, family affair, something unexpected... anyhow I am back, and there are many things to talk about debt, Yen, Euro, Algeria, elections in Israel, Iran---- and here in US market is making a multi-year high. Stocks are making new highs and our beloved AAPL stuck @500. NFLX above 100, Oh my! the markets are indeed very confusing right now.
The actual move in financial stocks after earnings was less than expected move priced in their options premiums, meaning the options are getting inflated ahead of earnings and the best way to play the ER in AAPL, GOOG, etc is to bet against huge moves!! I am considering trades using weekly options only.
For what its worth here are SPY numbers for FEB13
=Feb 13, 2013
I have been very busy lately and not keeping track of changes in OI for the past 5 days. For FEB OE I like nice round number of 150.
Good night and Good luck!
Hi KG, 2/10
Ho hum - melt up again. But, dollar firming to - somethings got to give. Someone gave the BOJ a dope slap ahead of G20, which starts OE Friday. They said 100 yen / dollar was OK, but now at 93 they say too far too fast - someone's leaning on them. Wish the G20 summits were on more economic calendars. Last time I shorted a G20 summit I regretted it. These guys will be presenting the best possible outcome as though it was fait accompli.
Hi KG, 2/13
What's up with the yen? I got out of my DXJ 41 calls Friday (scratched) . On Monday I was having instant regretification. Yesterday and today I just don't know. Mixed statements from G7 regarding Japan's QE. It could be a less harmonious G20 meeting than usual.
Max SPY call is 152 - could these actually pay?
=Feb 3, 2013
I have come to a conclusion after considering many things in the market, to name a few:
1. News media --- talking about 5 year high in the markets
2. Barron's Cover --- "Record High in Sight" -- written none other than the greatest bull Mr. Bary
3. VIX remaining low low
4 More importantly the volume of options trading--- lot of websites give you stats of the put/call ratio, the most actives, highest open interests, the etc etc. But the key ingredient in my decision making is "What was the volume of trading at ATM strikes for set of stocks?" and if I calculate that number for stocks in my scanner, Well, to give you some numbers on Friday 652,079 calls were traded as compared to 364,410 on PUT side.
I agree, usually the call volume is higher than the put volume, however never seen such high difference for the same set of stocks. This is telling me we are at the top, anyone going into the market with new money is going to be unhappy this spring season.
Currencies is your forte, well what is happening there? Japanese currency is all time low, even I made decent money shorting that currency.
I am going to wait for another week before gambling in this market.
I sold my calls in the morning pop, now looks like i have a chance to make money on my puts as well. I am not surprised to find that AH move in AMZN was less than the ATM straddle cost--- it happens when bookies know about my straddle position. How do they know? Hmm...
Superbawl is no fun if you are not betting some money with your friends-- i am betting on 49ers!
Good luck with your trades!
Enjoy the game!
Hi KG, 2/3
I'm keeping my exposure low and not holding overnight unless I have conviction.
On my radar now:
Oil looks overbought - canary in the coal mine.
Dollar is sloppy - hard to call.
They keep pushing the yen lower. They announced that 100 yen/dollar is fine, but who's to say they can stop it there?
Money flowing away from US bonds and back to European bonds. If no correction comes, or until correction comes, TBT should continue.
Hi KG, 2/1
It appears the market is determined to do the most disconcerting thing it can. In this case, yet another move higher without any significant correction.
Where is the money flowing - from bonds to stocks. From gold to stocks. From under the mattress to stocks.
I guess, for now this is reality - run with it.
Hi KG, 1/29
The SPY seems to be bouncing off the 150 ceiling like a 2 day old helium balloon. The dollar index - (which is pretty much the anti-euro) - remains just under 80. I've tried a couple of times shorting this market - didn't work out very well. Wall of worry ran out of things to worry about - or history is about to repeat itself and this is just another consolidation before the next 50 point move higher.
FB earnings 1/30. Options not that rich.
What's on your radar?
=Jan 29, 2013
I am playing AMZN earnings and buying FEB13 ATM straddles just before close. The idea is AMZN will do AAPL/NFLX style action.
I am not going to play FB using options.
Hope you got a bite of the apple this week. What a change in investor sentiment. I was surprised to see 450 get taken out - lots of weekly puts there. Market up 8 days now. AAPL crash didn't phase it. Demand for stocks is there, but I'm cutting out. Don't want an accidental position - like FB ahead of earnings Wednesday.
=Jan 22, 2013
Looking at how betting is going on in AAPL and GOOG, I still think ER is going to be non event, or the actual move
IT IS SOOOOOOOOOOOO FRUSTRATING......!!!!!!!!!!!
here is the gist of my message
1. if kibbles is right buy AAPL FEB13 500 strk put, and sell OTM strk put = 500- put premium paid - $5
2. if CNBC is right do the same thing using 500 call
3. if (i) am right do a butterfly @Feb13 500 strk with wing span = premimum for 500 call
Note to self: Type the message in word document, save the #$%$%%%^ file and then try to post message on ya-ho message board...
if i ever meet the programmers of this new message board---- i don't know what i will say to them...but WILL say this ---- GO J U M P IN THE LAKE!!!!!!!!!!
Hi KG, 1/21 - hope this posts!
I was looking at CNBC option recommendation for AAPL. earnings +1 525 call, (-2 550), +1 575 call butterfly @ 3.00 on the weeklies.
This position makes money between 528 and 572 - maxes out under 550. Not a bad move IMO.
Market continues to grind higher - January effect. Fund managers that are in stocks during market downturns get nasty calls, fund managers that are not in stocks during rallies get fired.
We are, however, running out of January. Also dollar is creeping higher from recent smack down - when ECB announced they will leave interest rates unchanged. Japan has entered the zero sum game of currency devaluation in earnest. Could be a game changer. We criticize China for currency manipulation, but we are the masters.
DO NOT make any bets in options in either AAPL or GOOG, you will be wiped out 100%. I guaranteed any moves will not be greater than the premiums you have to lay out. The house will win this bet. Wait until after they report to play options when the premiums come in. No point in paying up for implied volatility that comes in the moment the event is over. You can't win this bet, trust me. The big move in AAPL already happened when premiums were very low, you missed it so move on to another stock or index.