Put QCOM on your screen all day tomorrow

Discussion in 'Options' started by nitro, Jul 23, 2008.

  1. nitro


    QCOM is a major NDX stock. It has a huge move after hours, and on top of that it has a halt until the following morning to talk earnings and outlook.

    This is an opportunity you don't want to miss to learn to trade options. Paper trade both the term structure and the smirk [calendars, straddles, condors, reversals, etc]. Watch IV shift on it and see how your positions are affected.

    If you do nothing else tomorrow, it will be worth it because these educational opportunities come few and far between.

  2. So , which option position you are suggesting to enter/paper trade in the morning ?
  3. nitro


    Try a bear call spread if you just want to try putting on a position and don't want to watch it continously.

    Or, generally, IV will go down on stock higher, but not if the jump takes it out of a range. How about short vol, or maybe long vol? Choose your vol strategy. How about long a backspread. That will keep you busy all day gamma trading. Was your gamma scalping enough to pay for your gamma rent on the long backspread? Can you do this profitably in a retail account, or do you need market maker rates?

    Maybe you think volatility comes down and QCOM trades in a range. How about long an iron condor, and then trade in and out of the condor into bear call spread, bull put spread, or long straddles as the stock moves in a range, or your volatility outlook changes. Can you do this profitably in a retail account, or do you need market maker rates?

    The point is, take a view, put on a position that matches your personality, and then watch the way skews trade, etc. The reason this is a good stock to trade options on tomorrow from an educational standpoint is because, imo, QCOM is going to be a multi-dimensional options chess game tomorrow par-excellence.

  4. i was planning to gamma trade it today. buy a put 30 min after the open and gamma trade the stock against it during the day. close everything as the markets close.
  5. nitro


    How are you doing? Plenty of movement...

  6. well, that was a good profitable day. almost too easy. a classic for gamma trading. thanks for the tip man, the check is in the post. :)