This is a really tough environment to buy calls. ..Well, maybe not for the seasoned options trader but for me it's like trying to untangle a big ball of tightly wound string. I can't figure out where to start and which thread to pull.
Shying away from SLV & GLD because it appears the paper game may be in its end game. Who knows though. IF QEIII is hinted at the equities may do well so it makes me shy away from those ultra shorts on the markets that I'm thinking about.
Any of you have any good options trades you'd care to discuss?
ETFs? ..Equities? ..Miners? ..Oil? ..Ag? .........I'm looking to add some NTM calls because I seem to have done best with those.
Not sure if anyone is really even interested in this discussion but I'll c&p a comment from yesterday from kumanari (on another thread) because it is germane to this discussion and I value his opinion!
kumanari said: "options are insane cheap now also..,pay for TIME it will be well worth your while. uxg-nov 7.50 calls, jan 10.0 calls gdxj jan calls. I've opened a futures option account with a few 1640-1740 calls aug,oct,dec plus some credit spreads to manage risk, we'll see what happens."
Heck. I think I just got the answers to the question in my original post.
I rebought my fav $10 '13 slv puts after profiting on may massacre. uxg, gdxj, sivr, slw '12s.
It's not sexy but relatively secure. Also waaaaaay otm blackswan puts and calls as they pay
off in extreme volatility. That is the name of the game so roll with it. Take the easiest path and relax, there will be enough stress when shtf. It's ironic that some are now getting back in,see the mood shift just because the pms rose. I've been buying thru the pain. You must have the courage of your convictions.Why does everyone run to the store when a sale is on but they run away when pm's are on sale. I've never heard anyone say" I'm not buying T-bones til we get price confirmation, I'll wait for the breakout." Nough already we come go stay beach.
A hui hou malama pono kakou
I know I'm late getting back here (I am not good at keeping up with all these threads/forums yet....even the ones I post!) ..but are you still hanging onto puts for the slv? ...I am not trying to 'copy' you verbatim..just value your advice as it has made me think and made me wiser as a rookie trader. ....The slv/gld long puts are sound advice if you believe that these vehicles will not stand indefinitely.
Here is what I am thinking of buying in the next several weeks: (I say next several weeks because I won't have access to x-tra fiat until then... and I just hope the silver/gold train does not take off without me as options have been CHEAP but won't stay that way for much longer imo) Anyway, I like:
uxg jan12, gdxj jan12, svm jan12, exk jan12, ....Also, I like ego, kgc, ngd, auy, ssri, hl, tbt and I already own some uxg november and ung january.
Thanks as always to you kumanari & all else who care to comment on options strategies. I have to say that I am a bit puzzled that options calls/puts and strategies for both isn't attracting more of an interest here in the forums/threads. ..But.. I guess that should make me step back and examine what maybe all y'all experts know that I don't before I get my head handed to me!
Ginger, are you buying in the money, or out of the money calls here. I just bought a HL Jan. 10 strike for .60, looks cheap to me here. If silver is going to move higher, I would think the beaten down miners have some major upside potential. I also like SVM and GDXJ here, maybe just slightly out of the money, Jan and Fed 2013 are more expensive, but think of the time, 18 months of leverage!!!
I am with you on the thinking that the undervalued miners could take off at any time now. I am also wondering about the time factor of Jan13 being a better bet than Jan12. It seems like plenty of time between now and January 2012.. but just look at the latest downturn in the metals.. it has been 2 months of down and consolidation. I lost pretty big (for me) on some July SLV calls by not doing what kumanari suggested..which was to BUY TIME.. ..I don't want to get caught in that trap again. ...Still, I *think* Jan12 is a good amount of time when you consider it in the context of we have already had the downturn/consolidation period and it's time for things to start taking off again. The technicals support this but we all know what the EE can do to the charts on a whim.
I like your HL play. I believe it will pay off for you. Ideally, I wish I would have had some $ to buy last Friday because that is when I saw some really cheap options buys. But.. there will be corrections coming even if the train has already left the station. I hope to jump on then when I get the chance.
I also need to get better at doing what so many others do.... buy the dips, sell the rallies. I am not so bad at buying the dips...I love a sale!! ...But I am not so disciplined at selling a rally as I think it will go 'even higher'. .................Those July SLV calls sure have taught me well.
Oh!....And to answer your question, I have found the most success with buying very NTM calls. It seems when I step way out of the money I don't do as well. ..So, for me it is shaping up to be a strategy of buying time (long calls) on good solid companies very near the money. ..For instance, I will probably buy the $10 uxg ...but I will probably go in more for the $7.50 strike price as it just seems to always work better for me. But honestly...... I think by Jan12 we will do well with either 7.50 or 10.00 uxg!
Picked up some calls today, GDXJ - Jan. 41 strike, and also SVM Jan. 13 strike, I got 6 months, wish me luck!!!!
GL Zman! lol.
A question that I posed in the SVM thread (in silver miners). What do you guys think of the wide bid/ask spread in say illiquid calls that are very much "out of the money"? The wide bid/ask spread seems to me like it would eat away at some good profits even though the price of the call option may appear "cheap". This discussion isn't limited to SVM calls, but options in general - love to hear some insights.
You are right Joe, buying options in illiquid small cap names can have a buyer down as soon as they buy the option. I think the spread is a little better when dealing with large cap shares. But in reality, if one buys on option like I did, SVM Jan. 2012, I have plenty of time to to deal with that small difference, I think if one buys options close to the expiration date, then you are taking on a lot of risk.
I don't mind being down -10% at the start, because if I am right on my investment, it will make little difference.
I picked up some AEM Jan 75 call options today, AEM has been a big disappointment of a stock the last 6-7 months, great upside potential from this point on, AEM going much higher in my opinion.
Kalamai, I missed your post(s) directed at me. I have been busy studying for this next phase of the bull and didn't want to get distracted by the noise. As it turns out this was a wise choice for it seems I am on a path that is not frequented and it has paid off handsomely! I have recouped ALL my losses and then some with much upside to go, and I do mean ALL MY LOSSESS not just May.
By avoiding the noise I am able to think with a clear head, which allows my vision to become precise and clear. You are absolutely right about people ignoring this forum. They don't know what they are missing or could have. While most were pontificating, waiting for 36.50,the end of goldrums etc., I decided to quietly drink upstream from the herd. I broke several cardinal rules including selling 25% core miners ( but I have over 100k in miners).
I then opened futures option account (opvest) and went long au/ag sept. ag 41.35, dec. ag 48.35, au 1700,1800(2), 2250 - mar. ag 65(2), - may ag 75(2), 95(2) at 1535/35ish between 6/24 -7/15. Grandslamhattricktriplecrown. This has turned out to be my best "trade" yet. At freaking insane looooow premiums leaving over half my ammo to layer in puts to protect profits when the price chasers give the yahoo signal. As a sailor and former racer,one understands the importance of changing tack especially under constantly changing conditions. The wise sailor also understands the importance of avoiding the herd when rounding the marks as this is when choices become limited due to congestion and most disqualifications and fouls happen at this point. I have makana nau wale no. A hui hou malama pono kakou.
Kumanari, I totally keep thinking this thread has no interest so I forgot to check back. Yikes ..I am so sorry. ...You are so far above me in how you are trading. I want to be you when I grow up. I cannot wait to subscribe to Thomson. I have to be responsible and not charge anything else as I am desperately trying to get out from under debt acquired when I was an immature sheeple ...thus I wait until I can pay for his subscription and not charge it. (Don't laugh that I am that strapped and have to 'wait' for affording the Thomson subscription!):) ... Anyway, you are a mentor of the most wonderful kind. I find myself devouring your every word as I want to learn and I need to prosper.
Maryann is a dear new poster here on TFs blog. She and I had a brief discussion about options on the Faith thread and since it wasn't the place to discuss options.. I told her that I would start a new thread to discuss.. ..Well, I am going back to tell her that she should follow this thread that we already started and I am going to tell her to especially pay attention to your posts as there is much to be gleaned and I am nobody's expert! ...Kumanari, I can't thank you enough for sharing freely.
I have only about 1/4 of what you mentioned in miners and my options are limited because of not trusting myself to 'risk' so much of what I can't afford to lose at this point. But I am carefully & cautiously understanding that I will succeed if I go against the herd mentality and buy when there is much damage and sell when there is much euphoria. Feel free to post here anytime you can. I and others will benefit from your generosity.
zman, tough day today for those call options. ..do you still hold the ones you mentioned earlier in this thread? ...I have a little UXG, UNG, SVM, HL, and GDX. All are NTM and dated Nov, Dec, Jan. except the HL is August. Yikes.
I am going to check into those AEM you mentioned but I think I'd really love to add more UXG & GDX....and GPL at this point.. (if I ever get my tax refund back) "/
Just saw your post, thank you so much! Ok, tomorrow morning when my head is a little clearer and I have my first cup of coffee in hand I am going to read through this thread, go back through my notes, and regroup.
Because you Kumanari, and yes, you too Ginger, are so gracious in sharing your knowledge freely, I think I would be a fool to not take advantage of the opportunity to learn! The accountability helps too.
Again, many thanks!!
Ok!.. We'll meet back here tomorrow.. or whenever.. and really start discussing options. ..Maybe those way smarter than me will continue to join the conversation and we can grow and learn together.
This from Kumanari is key and bears repeating (because I've honestly learned this from him and am finding it to be a deep truth): "As a sailor and former racer,one understands the importance of changing tack especially under constantly changing conditions. The wise sailor also understands the importance of avoiding the herd when rounding the marks as this is when choices become limited due to congestion and most disqualifications and fouls happen at this point."
I like QQQ puts very, very soon. Tomorrow or Aug 1st. Swing trade for a week or so.
Taking the puts now even would be profitable I'm sure, but I'm fairly certain the market will move up a bit more.
TBT calls in the low 32s. When 30 yr treasuries hit around 127 (ZB) futures
I like playing SPY too but right now QQQ is even more overvalued. I see them both running up till Aug 1, dropping a bit for a week or so.. then rallying to highs by the end of august.
EDIT: Add JPM puts when it goes above 41.50-42 to that list. And UNG calls when NG gets around 4.2 ... it touched it earlier today. I missed it.. but it's at 4.230 now and I'm going long if it closes above 4.18.
Got a bit of a late start today due to a talky kiddo last night, and you know when they are in the mood for "deep thoughts" you just have to go with it even if it's late at night, because you don't know when the opportunity might come around again! Sweet time but I'm draggy today.
Ok, going to stick my toe in again but just with my virtual account! Looking at some calls on my miners, but a couple of questions. How does open interest affect the premium, or does it? How do you know when a premium is a "good deal?"
I'm sorry for such basic beginner questions, but I just have to hope if I'm wondering this maybe someone else is?
New to the options game as well (if ya couldnt tell from the thread below this eheh)
Good question by maryann above! I dunno the answer eitehr :D
Currently i am eyeing up SVM, SLV, and GPL calls.... but have no clue wich of the bunch are good v. bad.
Maryann, madcow, ....I promised I would be back here yesterday and I didn't get here! ..Sorry.. I totally understand that kid thing Maryann.. and you sound like a very terrific mom for giving that time. I hope you are recovered and got some sleep! ....We took an impromptu trip to a local amusement park to let the kids get one last 'taste of summer' yesterday (school starts next week) ..and BOY was it ever hot out there on those roller coasters!
Anyway.. ...well... back to options. ...CK...your avatar makes me hungry. :D ......Thank you so much for posting here and sharing some of your strategies for calls.. I hope you will again and I am going to check out the QQQ. TBT has been on my radar for a while as I think when interest rates rise (as they inevitably will) ...this will be good to own.
madcow, I have 2 SVM contracts with Dec expiry I believe. They were down BIG today. "/ ...I want to buy Jan GPL and now would seem to be the time. ...My finances are severely limited but I'm trying to do the best I can as I can. ...Maryann..and all.. ....I have to say this.. ..ME commenting on an options thread is really akin to ME trying to give technical advice to a rocket scientist on how he should get to the moon. ...I'm in no way qualified to give any advice. ..Rather, I think we can brainstorm what we learn here and maybe talk about the calls we have chosen. Basically, I can tell you what I am doing.... and where I go to learn more.
For questions on the premium and how it affects options pricing.. I am still learning myself. I have found this site:
https://www.investopedia.com/ ...to be very helpful. ..If you input almost any keyword.... options..delta..theta.... ..etc.. ..it gives you lots of articles that help to explain how the time decay affects your pricing on calls. There are many good basic articles that I found helpful ...but I don't fully understand it all yet. ..My time is limited but I'm still trying to learn as I go. ...Maryann, you are smarter than me because you are still playing with virtual money. I have about $3K tied up in my options account but lost most of it late Spring into early Summer. I wasn't smart. I have really tried hard to pay attention to the words of posters on TFs blog whom I admire (Kumanari..Kliguy38..and others) and I can tell that my mindset is changing. I may not be back in the green yet but I believe I will be soon because I feel that my overall attitude and mindset about playing miners and options has/is changing. ......Once I get the mindset down.. I believe my successful trading will follow.
So......seek out those on this blog that you feel speaks to you. READ all you can get your hands on. Keep practicing with the virtual account.. ..But I would also say that when you feel comfortable.. this Fall might be a good time to try your hand at a few real calls.. on a good solid miner that you feel after DD will do well in the coming gold & silver run. .....I am not telling anyone they should do this. ..I think the safest thing you can do is just to buy physical metals and some good solid miner stocks. ...But.. if like me, you want to try to leverage some gains and you learn what the experts are trying to teach us.....it may be a great time to make a little $$ this coming Fall/Winter.
Maryann, I just now saw/read madcow's thread.. ..it is a good one. Lots of people chiming in over there to help with understanding options basics.. Someone even suggested/had the investopedia link :) ....So.. that thread may be one to continue following to learn more about options.
What I hold currently:
(2) $12 Dec 2011 SVM
(8) $7.50 Nov 2011 UXG
(20) $20 Jan 2012 UNG
(20) $95 Jan 2012 GDX (this might not be smart at all....I tend to stick very close to the money strike price...but didn't here)
Will be adding some calls over the next few weeks and am trying to get my gameplan formulated via the info I posted above.
Ginger, what a great mom you are to take your kids to an amusement park...I'm wilting in this heat!
I will read madcow's thread...so much reading to do, so little time! But I will make time because yes, the real goal is to be able to stack as much and as fast as possible, and I am a little bit of a risk taker! :D
I am curious about your mindset, and what you are changing in your thinking?