I agree. Jobs Friday too.

I'm prepared for whatever. SPXU will be a quick trade and KORS/SH should keep me somewhat flat since my SH is a bigger positions size. I don't expect a big breakout to the upside, but I have a plan for that too.

That should only be true of anything that makes really big moves (compared to its recent volatility), right? The bid/ask spreads on some CEFs I watch was lol-huge today compared to normal. Nothing acted really crazy price-wise, but that is a decent recipe for some interesting price movements.

Feel like there might be an inverse cup and handle bouncing against resistance.

Bought 2 AAPL August 17 $440 calls @ 8.35, for earnings, conference call/outlook and news play.

Was going to hold off for longer while it dropped, but the rumor mill has gone into overdrive with iWatch patents, low cost iPhone pictures, strong analyst upgrades, etc. That alone is enough to make the trade worthwhile. It's a feeding frenzy stock waiting for good news.

Also, is anyone expecting a red day, or this a green week? BBRY is begging to be taken out and shot, it just needs some red to hit $9.50.

Also thinking of taking a large position (~$100K) 1 year option short of ARMH. Any opinions would be much appreciated. The more I look into it the more I think there is no way the ARM based foundries can match Intel's tech at 14nm within a year, which is what they're promising. Intel has the best guys in the business and has taken years to build the processes and get the yields for this next gen tech. It's getting harder and harder with each shrink, and Intel has a huge edge with their 3D design which won't be matched. They've wiped the competition before and I've never seen a clearer case of total destruction of rival tech.

Amazingly the market and some of the guys here didn't see the first round when Intel announced Silvermont, it took an announcement of Samsung switching a low selling tablet line to Intel to drop the shares 25% in a month, and there's at least another 50% until it's back to fair value relative to risk - even lower should Intel do well.

Any tech guys here I'd love to hear your opinion.

few Q's:

You assume Intel crushes them. What if Intel stays ahead but doesn't crush it. Its a big market. Who says the only thing they can do to go up is beat Intel? What if they remain #2 with consistent earnings?

What do you think the next earnings report will say and how will market react? Will numbers be a big miss so soon? If not who says the price doesn't rise short term? Esp if market rises short term. Therefore may be better to short from 40 than 36?

With that said, it looks pretty good IMHO. Wish I knew more about it or had time to change that.

^Will answer tomorrow.

350% $11.7K profit on the Blackberry strangle
-100% -$1.5K on the MSFT calls.

For the guys still in BBRY I think there's a bit more juice in there but my thesis yesterday played out (the 9s), so I'm out.

Things I need to avoid this month:

- Same week options - I can't see any edge over time decay and randomness

Things I need to do this month:

- Buy the ugly when I think it's the right play rather than wait for things to turn
- Go closer to the money when I think it's right play and take a smaller multiplier

Yeah. I am still holding short bbry and long the puts . Hoping for one more leg down at the open and i plan to cover. i was also talking about that . There have been plenty of stocks that are fabolously overvalued but are running so hot that i wont short them (eg. Tsla) . The pro move would be to go long before you reverse.

Yeah I agree...there's a bunch of stuff I won't short even though it's overvalued...you need some combination of a changed story/news/scary markets for the big bubbles to go down, or more often than not it's business as usual.

You must have made a small fortune on Blackberry (you didn't post the puts but have been talking up short for a while), congrats on calling that naked.

Congrats on that BBRY strangle. That was a very sharp move; I am kicking myself for not following along.

Like I mentioned in the value thread, ARMH is pretty much the only competitor left, since AMD is fux0ring itself. So while I think shorting ARMH is likely to be +EV, I can imagine the variance of such a move being quite high. Especially if, for example, AMD goes bankrupt within that time frame, removing ARMH's only competitor in the lower end market as Intel has not bothered with it.

Intel has also always been a generation ahead of its competitors for quite some time now. Despite that, ARMH has even taken some of the server space market away from intel with their lower end products. For companies that are more concerned with price, like HP and Dell, I don't really see that changing at all.

Bears have had 2 chances to crack us lower the last two days and have been unable to do so.

Will sell my SPXU shares at some point tomorrow as I definitely do not want this holding into the jobs report.

A very bull close for the market tomorrow and I'll be going long CHK for half a position.

Just a reminder to all of you guys, the market closes early tomorrow.

25% SH, 15% KORS 15% SPXU 45% Cash

Dont put too much weight into this weeks trading. Half the big traders are nowhere near a trading desk this week.

Nah. it was only a 10 percent position ... i held puts in the ira's i trade for some people. bought the july 16's around 2.3 . so kickass percentage return.

What are we buying BBRY at? $8?

My approach to addressing this is avoiding cheating to far over short or long. Even for a low trading environment, this price action is very indecisive.

Looks like gross technicals vs improving macro data imo.

Market is closing early, 1 pm New York time. I will be surprised if the market moves up more than a fraction. I hope to hold my short positions into Friday. I stupidly jumped into SLV a couple of days ago. Now I need a bounce to get out of it.

Question on option strategies...

Say i want to enter a long straddle on Zynga for Jan 18 2014. Just for this examples sake, lets assume i think Zynga will face extreme volatility within this time frame, either up or down. Which way, im not sure, hence me wanting to take on the straddle. (lets not focus on real world stuff, just in theory)

So ive "justified" why i want to enter into a straddle. Where i get lost is, where and when do i decide to exit this position? essentially, my question here is, how does one determine when to exit out of a long straddle?

If someone can answer these for me that would be great, and assuming under the 3 scenarios.

1. Stock price increase by 50%
2. Stock price Decreases by 50%
3. stock price stays the same

obv we would profit in scenario 1 or 2, and if scenario 3 happened we would loose our premium (expire worthless) When, do we profit take, or cut loses on a position?

Straddles are essentially you begging the market and mathematics to make you its dog. The market and mathematics usually oblige your request. IMO straddles are only worthwhile when you expect a huge move in the very near future, otherwise you're going to watch time decay bleed you to death. I trade lots of options and very rarely use straddles. Usually it's better to have an opinion about the stock and option that. If a straddle is +EV then choosing a side is as well. If you can't pick a side then the stock is probably close to fairly valued and straddles lose a lot of their edge IMO.

Getting out is hard and the whole process can be tilting, leading to bad mistakes. One side is going up and the other is going down and you're constantly left with a choice to sell one side and ride the other. All the while time decay is eating away at your money, since it has to move outside your combined price on both sides to start making money so you can actually sell the thing.

To give a specific example: A 2014 straddle on Zynga costs about $1.20. The stock is currently ~$3.20. That means you're betting on it hitting below $2 or above $4.40 just to break even. This seems like a horrible proposition to me. To make 100% you need to hit below 80c or above $5.60. The downside, if it doesn't do an enormous move, is 100% as well. You're playing against a huge range on a terrible risk/reward basis. In most normal scenarios a straddle is essentially an even money bet that the stock won't move 2x the options premium on either side in the chose time frame. I know which side of that I'd take.

In contrast, if you just chose to upside, you could bet on the same number of Zynga $4 2014 calls at 40c for 1/3 of the money down, be safe at $4.40 and reach 100% upside at $4.80 and a three bagger at $5.60 (your previous 100%). You're risking 1/3 of the money AND getting far great volatility upside, and all you're giving up is some seedy downside protection that doesn't truly kick in until the stock drops a lot. I know which trade I'd rather be in.

In terms of getting out of straddles - say the stock goes up - you can't sell the long since you're not making a profit until it passes the large premium addition ($4.40). You can't sell the short because as it moves away, it'll become worth less and less and it's a better idea to hold it for the downside risk rather than pay the bid/ask for a pittance saved. You're stuck in the mathematically unlikely position at the mercy of the market with time working against you for a tiny upside compared to other plays. I don't have the intelligence to play those kind of situations profitably so I stay out of them.

In terms of my own use of straddles posted in the last couple of days (trying to be helpful and show reasoning), I said I'd straddle Zynga at $3.06 after it spiked on the rumor of a new CEO because of the news that it was going to be confirmed after the market closed. This meant that a big move (confirmation, denial, people catching up on the news overnight) was certain to happen within a day of my straddle no matter what. So I could buy cheap very short term options certain of major moves immediately. I wouldn't enter the trade now - it was for yesterday only.

The Blackberry strangle was because Blackberry's next day percentage movement formed a very tight U shaped probability curve based on a success/failure narrative dichotomy, and the thesis was going to play out the next day so time decay was irrelevant. My thesis was the long side but there was significant probability of it dropping a large amount if I was wrong, so I took the short as well as both were excellent value.

I essentially saw both as stocks that were highly primed, immediate success or fail type situations. I don't think that's true for either stock any more.

Yikes. Global reds on Portugal jitters, Egypt protests and bad China economic news going into a 1pm close and holiday in the US. Time for a sell off?

Well written ts. i think we will have that very short term opportunity with msft in two weeks as they report earnings the day before july options expire and their premiums are low based on their lower implied volatility.

Kind of bummed I missed the obvious USO play when Egypt started to heat up. I'm not sure there's enough upside left there now at $36. But that one was obvious. I blame Canada Day partying

Sold SPXU @ 24.48 for a 2.61% gain. Nice to book a win to start the quarter.

Still down 5.17% YTD.

I swear if one of the 3 usual suspects comes in to comment on this, I'm gonna blow a gasket.

ARMH popped today on the UBS upgrade, which I suppose is good news for Truth unless their report is changing his thesis.