Quick Please help me on my first options trade

Hey, now you got me thinking about it.

 

haha. me too...

richard,

could you explain your strategy and your reasoning?

thanks,

Dan

 

No strategy and no reason J/k

Actually I have an OIH call calendar going on right now that hasn't done particularly well. I prefer put calendars. After reading Chewy's comments I looked at the chart of xle and saw it did take a small dip last fall. In looking at the probabilities of the trade expiring ITM both in september and Dec...I though the risk/reward looked pretty good...it also complements my OIH call calendar in that its kinda double diagonal. I can't get hurt too badly unless XLE goes quite a bit higher but I can always diagonolize it and of course if XLE goes higher my OIH is looking better.

Thats the best I can do to explain my reasoning. It is also the simplest...I have a very muddled mind

 

I bought another 2 puts, debating whether to make it and even 5.

Question: XLE doesn't not have to go below 45 in december for me to make money on this right? Lets say in October, XLE breaks below 50. What would the price of these options be.

Also its pretty obvious I'm the only idiot buying these puts, there's just no volume on this contract.

 

Why is there a 9k bid for .35 amd 7k offered at .45 if theres no one trading this contract.

 

http://www.ivolatility.com/calc/?ticker=MSFT


plug in the numbers. you'll need to get a grasp of Implied Violatily. (essentially a measure of demand)

 

OK, just noticed I got filled at $1.25 also (man Fido is slow).

I hope you know what you are doing.

 

you could/should have gotten in for 1.20...but hey whats a nickel. I'm only reasonably sure I won't lose money did I say we will MAKE money?

 

you could/should have gotten in for 1.20...but hey whats a nickel. I'm only reasonably sure I won't lose money did I say we will MAKE money?

edit...if you want I'll follow it in the calendar journal to keep track of it. Remember calendars are NOT short term plays. They take patience.

 

If you told me when exactly you anticipate the break to occur or the magnitude i could tell you which way to approach it with put options or a combo for that matter. If you are just like me a person who cant see the future then any put option you buy will be a trade off between time and direction and thats putting it simply. The more time you give yourself, the bigger move you will need and vice versa.

My personal take and i dont do predictions but if you anticipate a break why go out to december? If you dont see the break in aug or sep, how the hell are you going to predict december?