Registered User
Joined: 9/7/2005
Posts: 133
|
Looking at v, and goog's chart they both look to be at the bottom of 3ish month ranges. Does that type of pattern make sense to consider putting on a straddle option position expiring july for goog since its earnings announcement is this thurs and august for v since its earnings are the end of the month? To me it looks like they are both setup to move and earnings should be a good catalyst.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
It would appear (just from bollinger bands applied to price) that
GOOG would be the better choice. Volatility appears to be expanding
on V. GOOG's has been lower longer.
I haven't looked at anything else. (such as the cost of the options)
Thanks
diceman
|
|
Registered User
Joined: 8/6/2007
Posts: 73
|
winfieldh ,
(url removed by moderator)
Look at this
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
LOL, if you are asking this type of questions then you are not ready for options.
Which strike price are you thinking of?
This set up is not one most prone to success for a straddle. Look for extreme volatility as per example DNDN in Dec of 2007.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,181
|
And how would one ever get ready with answers like that?
(Oops, broke my own rule.)
|
|
Registered User
Joined: 9/7/2005
Posts: 133
|
QUOTE (BigBlock)
LOL, if you are asking this type of questions then you are not ready for options.
Which strike price are you thinking of?
This set up is not one most prone to success for a straddle. Look for extreme volatility as per example DNDN in Dec of 2007.
Yeah, so look at DNDN from 11/15 back a couple of months and you get a similar chart to v and goog. It is great to see the volatility in Dec, BUT you have to be in the trade BEFORE the volatility.
You need to think about something when you make these type remarks. You know that airline you last flew on? The one with the professional pilot that you trusted your life to. Well, that guy was once a greenhorn student that couldn't land without making a couple of bounces to save his/her life! Thus they had to ask questions like 'how do I do this without bouncing?' People learn from asking questions. Their instructor didn't say they weren't ready for flying, if they did there wouldn't be any airlines, they helped them through by giving pertinent, useful answers to their questions. OR They kept their mouths shut and let the student figure it out on their own.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Winfieldh, you just took the words right out of everyones mouth. You are becoming quite the valuable addition to this forum. I once asked bigblock why it is that he haunts this forum and he told me and I quote "I love to help people"
With his kind of help Winfieldh, you should soon be a master Options trader. You might even have your own website, just remember not to advertise it on this forum though. The Wordens will ban you if you do so. bigblock can also give you much needed advice in this arena as well.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Ok winfield, I suppose my answer should had been that you are most likely going to waste your time and money in playing a straddle with either GOOG or M.
GOOG anf DNDN had nothing in common. And no you don't have to be in the option before the extreme volatility happened.
You need to do some homework before you come around asking questions that you are not going to comprehend.
Apessll did you really help winfieldh any more than I did??? Winfieldh will be a master of options when he decides to put the required time, work and experience into it.
He sure will not be a master of anything by asking senseless questions here - "Does that type of pattern make sense to consider putting on a straddle option position expiring july ...?" what kind of questions is that??
And truly Appessll he will be a master of nothing by listening to you.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
bigblock we all know what you are a master of. Your wrist must be geting tired by now, one can only hope that you are ambidextrous.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Apsll) bigblock we all know what you are a master of. Your wrist must be geting tired by now, one can only hope that you are ambidextrous.
Apessll you know what is said - when you constantly deviate from the questions at hand, from the points of focus, and from the issues in front of you is because you are a lier, a goof, and a bluff.
I suppose that is nothing new.
Why don't you give winfielth an answer to his question instead of redirecting the focus to me.
You are not helping anybody here.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Winfieldh asked no question of me. and since I have no knowledge or interest in playing options then there was no intent to give answers. I was mearly agreeing with his statment that you are a usless pustule.
You seem to forget that I did some extensive research on past threads from you dating back some time. You too had guestions and weird ideas about options. I think that one involved opening up multiple brokerage accounts and playing strange cominations of options (how briliant) I also remember that Diceman shot down your silly idea with pure logic. I can even go back further to showcase your ignorance if you choose.
I choose to help folks here by sharing my research and trading ideas so that those that choose to can share in my profitable trading techniques. It is not important to me what your unqualified opinions are, they will not and have not stoped me from making profits...
|
|
Registered User
Joined: 9/7/2005
Posts: 133
|
QUOTE (BigBlock)
Ok winfield, I suppose my answer should had been that you are most likely going to waste your time and money in playing a straddle with either GOOG or M.
GOOG anf DNDN had nothing in common. And no you don't have to be in the option before the extreme volatility happened.
You need to do some homework before you come around asking questions that you are not going to comprehend.
Apessll did you really help winfieldh any more than I did??? Winfieldh will be a master of options when he decides to put the required time, work and experience into it.
He sure will not be a master of anything by asking senseless questions here - "Does that type of pattern make sense to consider putting on a straddle option position expiring july ...?" what kind of questions is that??
And truly Appessll he will be a master of nothing by listening to you.
BB,
Didn't you ever ask questions of people while you were learning something? Bear with me and if I am so ignorant then ignore me, but don't tell me I need to do homework (you haven't assigned any) before posting question, and don't you presume to know what I can or cannot comprehend. You don't seem to comprehend the fact that I may be your grocery bagger, neighbor, aquaintance, subcontractor, mailman, physician, dentist, or website customer.
My understanding of straddles is they are good tool for investor who thinks price is going to move but unsure of direction. Could be earnings, news, internal company issue, whatever. They are also a tool used when stock volatility is lower than normal to take advantage of rise in volatility.
That being said, goog and v were both at the bottom of their ranges and at or close to closing previous gap ups. It looks to me as though they were either going to drop through their gaps or bounce from that level. So lower volatility, standing at a support level, with the market pushing hard to the down side.
Low and behold V has broken down nicely although I did not put any money on it. Goog is still hanging although yesterdays volume and large range suggest something is in the works. I realize I didn't put strikes/expirations in original post (forgot), and I am speaking blind at the moment from work computer, but I think goog's earnings are tomorrow and v's are next week, so the straddles would be near term ie july atm for goog and aug atm for v.
BB I appreciate the feedback. Could you give example of where you would use straddle and why?
Thanks W
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
First of all, I gave you an example to look at (that was DNDN) - I straddledhat back in Dec, while some friends sold the covered calls. I told them they would get burned, as it was obvious that a jump of that dimension in such a volatily would had only 2 dramatic resolutions Up or down, and so it was.
You must realize that the volatility you need to assure certainty in a straddle must be extreme.
In a straddle you will play both side of the coin - meaning you pay almost double - so you still have to make up the cost of both side of the trade before you are in profits.
Also in options you pay for time - it is my practice to pay a little more for extra time to let trades develop fully.
If you bought lets say the JUL Call at 70 for V ( as well as the PUT side) versus the SEP Call at 70 your difference in premium is quite a bit, but so most likely will be your difference in chances to profits.
The JUL Call is to precipitated and most likely your straddle will expire without any profits.
The cost of your JUL Call / Put at 70 for V is more or less $310 calculated at the ask. It would take the stock to move over $3 to start making profits for you.
Do you think that would happen within a few days. Remember JUL expirations is on the 18th.
So do you understand now why I said that your questions was nonesense?
|
|
Registered User
Joined: 9/7/2005
Posts: 133
|
I guess I am a glutten for punishment, bringing this up, but here goes....
In response to BB:
I did not realize your mention of DNDN was a trade. You were as vague about that as I was about the strike prices. We're even. I would ask, where did you enter the trade in relation to the two big move days, 12/13 and 12/14?
Yes, I realize a straddle must be done when there is volatility in order to profit, and I understand about time decay and time/volatility premium. BUT, you don't necessarily enter a strddle DURING extreme volatility, rather, enter in a period of low volatility with the EXPECTATION of extreme volatility.
No I don't understand why my question is nonsense. I think you need to read the question, because I didn't ask ANYTHING about how options work. I asked about the price patterns in combination with the proximity of earnings reports of the underlying issues. Please reread my question.
Via papertrade I did manage a 1500.00 profit out of a 4500.00 straddle on V all on 7/15 when it broke down through the 4/15 gap. I must admit I used the july straddle by mistake although the aug's may have produced similar.
It looks now like the GOOG will accomplish the same because of what I mentioned.....earnings.
As I said, I was asking about the price pattern setting up for a move (up or down) at a point of prior support/resistance with some news on the near horizon.
I appreciate the education and would love to know the dates of your DNDN trade and what lead you to it.....W
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Hope you made some money off the GOOG.
Thanks
diceman
|
|
Registered User
Joined: 9/7/2005
Posts: 133
|
Thanks for asking....Until I do this on paper more, no, no real money, but on paper, 1200 from a 4000 position.
I have been trying out thinkorswim's papertrade platform. It is pretty slick.
Both V and Goog did what I was suspecting. The V was more of a one day wonder and I just happen to be in the right place at the right time (1500 pft). Although their earnings haven't come to the front yet so there is time on that one. Goog was picturesque and exemplifies what I was looking at when I started this post. Price at a support/resistance level, low volatility coming into a news event. I am continueing to look for these to see how they and the options perform.
|
|
|
Guest-1 |