First they are allowing some weekly options and then they announce a reverse split...
And to think...we thought option trading on UVXY was getting a bit tiresome.
Enjoy the holiday...starting Tuesday we have some work to do.
The trading range has been tight but with wild swings. That is good for options. It will be even better when instead of having to buy in the money puts now because of the tight range you can buy more speculative out of the money puts...which right now are a death wish.
But if you used your method on when to enter into options... things would change after the split. (For out of the money options mostly...)
Then I agree...buying 1k at $6 is the same as buying 100 at $60... we are just moving decimal points around...
But he starts out by saying the split, "... will have no effect on the way it trades, and...". That part is simply not the case.
I think I'm going to hold my fire for now and trade Ralph's SPY trade and maybe some ITM UVXY puts. Like you said...To buy OTM puts now we have to stretch it all the way to $5. After the split things will basically be the same but we will be able to buy OTM puts (if we are still above $6...) at a strike of $5.80 ($58 post split) instead of stretching it out all the way to $5 ($50 post split). That is good for the more speculative trades.
As far as your pre split deep ITM put trade I'll have to look at it but I did notice one thing...the Aug$10 were going for between $4.50 and $4.90. The Sept $10 were going for between $5.00 and $5.20. It looks to me you can get an extra month for $.25 or so...my point, shop around before you buy...you might get an extra month before expiration at a small cost. Also, check the bids for different strikes because you can maybe squeeze a dime here or there. ($10's do look the best after a quick glance...)
I was able to take a better look at that trade today and I was thinking the same thing. The nearest term options seemed the most reflective of the actual stock movement. (Less time premium right?) Also, we seem to be in a pattern of down in the morning followed by some kind of buying the dip. If the S&P gets beat up early this looks like a great trade.
I'll give you a heads up when I start trading this because if anyone can take a good trade and turn it sour...I'm the guy. ;-)
I'm not sure if I'm in the B.S.-ers category or if I'm a newbie but the reverse split sure helps with the option trading...but I'm sure you guys already know that...don't you?
I think each contract of the pre-split options will be worth only 10 shares with a proportionate increase in the strike prices...but I'm not sure.
I had not seen that yet...but I have now. Good eye. Great news.
And to think...you're justlearning. ;-D
p.s. Have a great holiday weekend...
Thanks Bengel...you have a nice holiday too.
p.s. I'm not worried about my shorts...my problem is I try to box them when the price starts going up and 6 out of 10 times I do that...I end up burning myself. It all comes down to discipline.(which I evidently lack...). :-(
He's got a point.
If you're a lefty...congress is holding up the creation of the long awaited liberal Utopia.
If you're a righty...congress established and charters the out of control Fed which is printing us into the ground.
See...it's Congress' fault.
If you go to the UVXY page and click the link on the chart...the historical price data is a available...(...if that's what you are looking for.)