IV change will have very little effect being so close to expiry. Union - what's your view on the stock ?
yea IV is a non-issue since expiration is in a week. My view on the stock? 270ish. But I was wondering if any you with more experience know whether or not marketmakers start doing funny things as expiration nears?
GOOG options are so liquid, you're not at the mercy of MM's. Plenty of retail flow. Secondly, expiration week is pure gamma. You're only held at bay by the underlying.
I agree.... there will be plenty of competition for your business in such a big stock. Don't worry too much about potential MM shenanigans.
BELOW ARE MY POSTS FROM THE FOLLOEING ELITE TRADER thread ------------>GOOG Ready to Retrace ? tradertony76 IF IT WERE ME I'D TAKE PROFIT IN AT LEAST 1/2 OF THE POSITION REMEMBER THAT SINCE YOU ONLY HAVE 1 WEEK LEFT YOU SHOULD RAPIDLY LOSE TIME VALUE. ========== cowpok1027 Registered: Nov 2004 Posts: 29 08-09-05 03:22 PM I agree GOOG is bearish right now (@ 290.40 3:20pm------> I went short the stock on 7/22 @ 305 near the close as bearish reversal on above avg vol took place (NOTE I play options a lot but GOOG's are very expensive). Just put in new stop alert (my computer rings a bell) if GOOG pierces 292.95 (I'll put up my Level II & check trading to get best price to cover but not to exceed 293.75) NOTES: A) GOOG opened strong today but on low volume relative to normal 1st 15 minutes with high of 292.68 B) GOOG's 50dsma = 292.57 C) 293.75 is approx interim day peak from where GOOG fell yesterday MY TARGETS: #1 = MINIMUM TRADE TARGET WAS 289 -289.50 (Broke this today but rallied strongly off 288.50 (I'll be watching the last 15 minutes of trading & probably take 1/2 position off the table if > 291 #2 = My expectation is for drop near term to 277 with excellent chance to make it to 261.50 & good chance of going to 251. cowpok1027 Registered: Nov 2004 Posts: 29 08-09-05 04:37 PM SEE MY PREVIOUS POST TODAY --> KEEPING MY STOP AS NOTED Well, I did't pull the trigger on GOOG cover of my short near the close because the institutions were selling into the last 1/2 hr rally. I'll be looking for GOOG to pierce 288.50 tommorrow but if it finds good support there again I'll cover the 1/2 position. For you put option guys --> A ? How are you calculating your risk/reward on this or you just throwing in a "HOME RUN" speculation? I generally like to take small risks with high probability of profit. I use options generally to hedge ; e.g. diagonal spread. cowpok1027 Registered: Nov 2004 Posts: 29 08-09-05 05:09 PM I've traded GOOG on the upside 3x via stock & option purchase as follows 1st - 4/20 @ 198 & hedged with OTM call with the stock @ 230 on 5/11 (lost some of possible profit but it was my first GOOG trade & I needed to protect a nice profit) 2nd - on 5/18 bought in the hedge with the stock @ 234 & went long 20 June 220c 3rd - put on a bull straddle (already long 20 June 220's) shorted 20 June 290c Exited all above 7/22 & went short. I'm very nervous trading the short side for the first time which keeps me @ my computer 7 hours a day. If BIDU can run to 150 in 1 1/2 days what could GOOG run to? cowpok1027 Registered: Nov 2004 Posts: 29 08-11-05 07:52 PM To Mr z & all you GOOG traders out there - Basically GOOG's been down 5 days in a row (ok it was up 30 cents on 1 day in which its range was lower). So why should I be nervous over my short ? #1 - I love to take profits & hate letting winners turn into losses. #2 - Institutions were nibbling more yesterday altho volume was subpar overall. #3 - A counter move (at least temporary) is likely & the pm bounce back from 280 showed GOOG isn't dead yet. I'm gonna trade it (buy-in 1/2 of my short position) as follows: ASSUMING NEUTRAL MARKET (typical summer Friday volume & range) IF GOOG trades down in the AM but fails to break 280-280 1/2, then starts trending up I'll load the BUY gun & fire if it breaks the top of the 1st 1/2 hour range ----> in which case I'll be looking for GOOG to break thru 286 1/2-287 & run to 292-294 ( not necessarily on Friday but within 3-5 days). If GOOG trends down or flat i'll leave it alone.
so you're going to sell your options, because the theta is going up as expiration approaches? truly genius. im sure the MM's havent thought of the theta curve. they are obviously way overpriced by the marketplace.
with brevity, good trades involve edge. you are making a trade based on what one can read in Natenburg. is that really edge?
P.S. profit is an idiot. its much cheaper to hedge your deltas in the stock market. gettng long stock can get you out of directional risk, while giving less edge to the specialists. duh.