200%+ Iv

Discussion in 'Options' started by palawan, Sep 12, 2008.

  1. palawan


    on sept 3, i bought oct 08 mer 15 puts for .18 when mer was at ~ 27/share. pure gamble play, just thought i'd sell if any bad news come out. didn't do many of them, i figure since it's a gamble-play, buy 5 for about $100 and maybe sell IF it doubles or triples.

    then, sh*t started hitting the fan and leh news were all over the media. i couldn't believe how much the IV was going up. everyday. i wanted to pull the trigger and sell, but figured i'll hold until friday before some bailout news come out over the weekend.

    i sold those oct08 mer 15 puts for 3 when the stock was at ~17. still $2 out of the money!!! i wish i bought more :D

    i plugged the numbers in CBOE options calculator, and it says volatility is 200.797% outrageous.
  2. Earlier this week LEH OTM calls were increasing in value when the stock was dropping from 10 to 7.5... vol was moving 30% intraday.
  3. palawan


    i'm a premium buyer, but even i believe these mer puts (and calls) are overvalued...

    i remember the thread "writing options for a living" that went on and on and got thousands of replies and views. surely, there's at least 1 premium seller out there that wants to take a stab at making some money on these? IC's on mer, perhaps...

    i sold my speculative position (more like a lotto-play), but i don't necessarily think that mer won't be lower next week. heck, i can visualize mer going to under $10 with some kind of bad news, but i'm not willing to wait for it.
  4. Nanook


  5. palawan


    wow... i am extremely lucky that i sold my mer put position last friday. looks like it's worthless tomorrow.

    chance can outperform grace, sometimes... from the movie player 5150 - a very good movie about a day-trader/degenerate gambler

    looks like it's going to be an exciting week for option players - premium buyers and sellers.

    leh is toast. is this right? s&p futures down 43 points and nasdaq futures down about 48 points...

    good luck, everyone.