Ryan, I have your WTW strangle up on my live IB Trader Work Station, that way I can keep an eye on it while cheering you on! I also have the YHOO straddle that I formulated earlier today on my TWS as well. That way we can monitor and compare a high IV very short term earnings play strangle "versus" a 2 month low IV straddle (with essentially no catalyst to move the stock). Jeff
Forex Forex I was reading the other day, your August trading with way OTM options. How did that come out? The thread petered out and didn´t answerwhat happened?
Which reminds me. Sheesh I forgot again! Oh yeah! I did a study last fall, trying option premiums from 2 strikes OTM up to $10 options in the money. It might interest you to find out, that the best premium ballooning for volatility was found between the $3 and $5 option premiums I dont know why that is, but from now on, will stick to those values, for straight directional buying. I presume it is because of people diddling with strangles, and verticals and such. More buyers maybe?
Hmmmnn! I´´ll bite. What was your conclusion? Does it pay? Do you do it now? I thought way OTM while cheap, barely moved? Give an amateur your conclusions.
Well I sold my 5 QQQ´s and made a small amount of money. Have to do the math and bring my web page up to date.
This morning I mentioned the SPY opened below its (PP) Pivot Point and was heading down to (S2) Support Level 2 and then it would bounce off S2 and then head back to the PP. Take a look at the attached chart of the SPY Pivot Points now that the day is completed. That was textbook perfect. Its just a good way to help determine which way the markets are headed with about 65% accuracy. Even though the total movement was only about 1.0 SPY point, that translates to 10.0 S&P points.
The way WTW closed out AH, not sure if it can make a 10% pop tomorrow, but sure liked the way it dropped to $67 or its AH highs at $84. If any of those two price points can hold, I'll take this as a positive. As for in over my head on this trade, sure....the odds are clearly against me here with 3 days remaining. I did say I was willing to risk this $680 of my profits from the two locked in trades today. I also did say that if I were in it to really make a profit from this trade, then I'd have gone with a put spread on the put side and limit cost from $680 to $500, which would have made it worthwhile. I think we get upside tomorrow though. Why would WTW want to buy its own share at current price levels if it didn't have some sort of plan to increase the share price even higher. If enough fund managers see it that way, then we get a solid pop, at least to $85, possibly a drag into $90. Persuading investors to jump in will be key as FY12 guidance was barely inline.
I think the WTW trade will weigh you down in the future, perhaps if you were not such a glutton you might get better results.
Hi Ryan, Where are you getting your short float info? I'm looking at yahoo finance and only see 7.19M shares short and not 14M...although % of float is still 24%