Did ES not bounce from 897 to 901 last thursday ? Is 897 not between 896-898 ? http://quotes.ino.com/chart/?s=CME_ES.U09.E&v=w I posted this before we even put the head in. I will consider it a bad call if we break 953 on close or fail to hit 800 by the end of october.
You guys better liquidate your shorts now and go long because temporarily, we'll see new highs. Then we'll go down. There' a bullish descending wedge forming.
This means there will be no new threads started by me, no new polls, no new market top calls. If baron allows me to self moderate my threads, though, I will start new threads with new ideas. Sorry for the confusion. http://www.elitetrader.com/vb/showthread.php?threadid=168825 As I said yesterday, since the original resistance at S&P 928-930 now looks to be holding for a few months, I can sell S&P 950 and 1000 calls for July, August and Sept. This trade is a low risk, nice reward trade. And since I believe the odds are in my favor, I am comfortable with it. Take it to the bank amigo$!
Let me put it this way ivan. The August S&P 950 calls traded yesterday for $9. Obviously, the options are priced as if there's a strong chance of the S&P reaching 950. This is NOT a coin flip. For me to say "a few months" is really going out on a limb. if you tell me you understand this part, I will continue with my rationale.
I follow you so far. I'm not going to pretend that I have the knowledge you have in the markets, so if you can "dumb down" the rationale in a way that is layman, I appreciate it. I'm a forex guy, remember. So I think I get what you're saying - because the calls are priced as if 950 is a probability, you're making a bold call.
I'll try to come on at the end of the day and tell you the updated prices of the options I mention. Off-hand I know if an option is trading @ $9, the traders are pricing in a high probability of it crossing that figure during the time period. Using the same rationale, if the option is priced @ $1, the traders are pricing in a much lower probability of the S&P crossing that figure during the time period. Options can get as low as $.05 when there is very little to no chance they will cross that figure. As it gets closer to expiration, and the odds dramatically decrease that it will cross a strike price, you often see options trading for $.25 and less. When you sell 1 option @ $.25, you collect $25 minus commission. Any "call" I make and have ever made on ET is NOT for the sake of me showing that I can make a bold call to people I don't know. Every time I have posted an "idea", I am actually trading off of that idea, and you can be sure a significant amount of $$ that I control is invested in that "call". For example, when i started this thread, I was heavily short S&P May 950 calls, and I hit a home run on that trade. ============= Eric P has said it well, and is obviously coming from the same place I am:
Rowshan, I appreciate you taking the time to explain. I'm ALSO going to trade some off of your calls. Because, despite our previous sparring and silly behavior, I do think that you know what you're doing. Good luck, I'll watch this space.