Looks like this trade has worked out very well. He had paid around 0.60 for this spread. TLT is now over 124. If it stays there, this trader will have made 400%.
Today on CNBC around 1:15 PM, Jon N. announced there was big call purchase for TLT. TLT rallied shortly thereafter. Jon suggested that the buyer may have known that there was not going to be a rate increase today. There was even talk that this info had been leaked.
Jon Najaran said a big option trade just went through for TLT.
Over 50,000 calls traded for each of the Oct 16, 121 and 124 calls. Jon mentioned that the buyer of this trade probably feels that the Fed will not be raising rates today.
There is no way to exactly know, but it looks like a possible call spread.
There has always been talk about a merger of YHOO and TWTR. Maybe the saying, the whole is greater than the sum of the parts could apply here. With a merger, there would be a new management team. This would be a graceful way for MM to exit.
In response to your question, this is from an article about Darrell Zimmerman from Wikipedia. He had been trading way beyond his margin. He was not allowed to keep his profits.
" His actions caused the Chicago Board of Trade and all Chicago exchanges to implement what has unofficially been called the "Zimmerman rule" prohibiting traders from profiting after having traded above the limit of their account; The clearing firms are allowed to keep the profits."
Was yours a Maintenance call or a Fed call? Take a look at the Scottrade site under "Margin Calls" The Fed call is more serious. Selling stock to meet the margin requirements under a Fed call will result in a liquidation violation. Under the most serious violation, margin is removed permanently from your account. This is why I always have at least 2 different brokerage accounts just in case.
Good call. The VXX has risen 100% during this correction. I am considering a trade with Oct or Jan put spreads. Since there is still around 50/50 chance that we have seen the market bottom, the put spreads will help minimize drawndown if the market continues to correct. Are you taking this opportunity to short VXX or UVXY? If so, what are your option plays?
XIV does not have options.
Did you mean to sell puts in SVXY?
UVXY is 2X
Take a look at the new Seeking Alpha article "Why Shorting Volatility Now May Be A Very Favorable Trade" which includes a discussion on SVXY.
Re SCO, Dennis Gartman and Cramer are both saying that oil may have bottomed. Their track record may not be the best, but I decided to go ahead and close out my puts in USO. There may be more downside to oil, but trying to catch those few more dollars is probably not worth the risk.
This indicator worked perfectly. They were talking about this 5 day trend line on the CNBC noon show before it broke through to the upside. They said if it does break through, then buyers will be coming in. I ended up buying QQQ calls both before and after it broke through. Also, some VXX puts around noon.
This is what the traders are closely watching.
530? Reminds me of when I had sold my entire position in C in 2009 for $5.30 ($53.00 post reverse split).
I am considering buying back in around the mid 40s, but only as a trade.
Most of those sellers were probably on vacation. Their stop loss orders ended up being market orders at the morning low. How are they going to enjoy their vacation knowing they sold 10% below the current market price.
With UVXY at 40.50, I am looking at the Sept 32/28 put spread for a debit of around 2.00 This would be half the width of the spread. I figure regardless of when I buy in, there would still be a 50/50 chance that I am correct. Should the share price continue to rise, I could close out the short puts for a profit and continue to hold the long puts.
Anyone have ideas for shorting UVXY with put options?
If the Fed does decide to raise rates in Sept, how bad will it affect the market? It appears that everyone is already expecting a rate increase.