optionsjunky-------

Here is a RUT IC posted by a fellow trader from
Advanced Options Strategies. Hi probability trade given the limited credit. I have asked for his exit/adj plans and will post details as I get them.

11/3/06
The trader added the nov 780/790c spared for .65 credit, citing multiple resistance zones between the current price and 780, with 780 being the last resistance point.

Note how the profit zone narrowed with this maneuver and risk is increased on the extreme upside.

This thing was crazy as expected. I got up all groggy pre-market only to watch it gap open in the 12s and tank like a lead balloon. I had intended to short stock at 8 ish but had to chase it down to 7s b4 I got filled 300 short shares avg 7.0. Vol crushed as expected. Resulting position shown. Covered all short stock at 4.23 avg. Unwind the original diagonal for 2.1 debit. Total loss including costs -.35

Spent the weekend south of me visiting a long time friend and her family. At Pismo Beach we went to Mo's Smokehouse BBQ and saw these pigs on surf board displays in the eatery ;- ) Pretty good stuff. The folks at work will definitely feel the power of garlic fries come Monday.
Mo's Smokehouse BBQ

No way in hell they fill me on either the nov/dec 2.5p calendars for .05 debit or even .10 debit.
I also sat on the dec/jan 2.5p calendars for several days, no dice. Its getting down to the wire on the FDA announcement. Stock down to 7.6 as of close today.

AVNR FDA news pending 10/30. The vol and skew are large on all expirations and strikes. I did the attached diags on 10/30 for 1.0 credit. So far I have seen that same spread go as high as 1.4 a few days ago. Vega is pretty small. Risk Graphs generated using ThinkorSwim, of course.







Here is a simulation of -200% vol on all strikes, based on 10/22 higher vol. As long as stock does not tank below 6 I am golden by nov OE. Note the IVs for each leg has increased quite a bit since 10/13. Vega is still pretty small.






Here is what the skews on the 2.5p between dec/jan has gotten to.
I dont know if I can get a fill on this but it would be an awesome hedge for the downside if FDA gives the finger to AVNR on 10/30.

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Any materials u see on the blog or thru tutoring sessions should be considered for educational or entertainment purposes only and NOT actual trading advice. Trading options may involve substantial risk of capital. Please consult your broker or licensed professional before placing any trades.

I post a small part out of all my trades (could be real or paper) to help
demonstrate some concepts. Most importantly for myself, these public posts
help me tremendously on discipline and in the areas of considering/planning
and continued vigilance with active trades.

The greeks related discussions here have little or NO PREDICTIVE value as
far as stock direction in my opinion. For those whom decide to dive into the greeks,
it offers a finer analysis of your current or potential position bahavior between expiration
periods. Where the rubber meets the road, is your game plan IN REACTION
to the market conditions and how well u stick to those well prepped plans.
Greeks analysis merely points out in detail where your greatest concerns
should be at the current moment.

If you always do your calculations on an expiration basis, where
everything is absolute, then no need for the greeks.

However, if u are somewhat mystified on some market conditions where the
market went your way but your position didn’t gain anything, or the market
didn’t move at all overnight and your position magically made/lost some money
the next day, maybe the greeks will assist u in the behind the scenes
happenings that effect options pricing.

tutor@optionsjunky or skype: optionsjunky or yahoo IM: optionsjunky

Labels: expiration, greeks, magically, money, risk, tutor

"I wish I had access to someone like me when I was learning options in 2001".

That thought came to my mind the other day as I have been part time moderating in woodiescciclub.com options room for 2 months. I am a retail trader and I do not derive my primary source of income from trading. I have a day job not related to the markets. Trading options is a passion and only serve as an insurance policy should something happen to the j.o.b (just over broke).

In the process of moderating and hosting live training sessions at woodies, I discovered that I know the basics really well, and most importantly, I love to talk about it. Feedbacks from folks viewing session archives indicate I have a knack of explaining options concepts to newbies and experienced alike.

The number 1 problem for newcomers to options is they get blown away by the vast amount of info/strategy/bad press/!$@#^&% relating to options, and either continue to trade confused, or leave confused. Newbies need to learn to crawl first b4 attempting ballet. I would like to prevent these folks from leaving this market. More liquidity in the options market ultimately benefits everyone.

The primary charter is to educate/assist new options traders. I do not need to convince anyone with impressive, overwhelming hype/info. I will present in my training videos specific areas to focus on step by step, the way I wished I had been introduced.