tag:blogger.com,1999:blog-973587304515257848.post1881444247858231881..comments2024-02-11T00:12:56.047-08:00Comments on IN THE MONEY TRADES: VXX post-mortemAnonymoushttp://www.blogger.com/profile/02083421527404780093noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-973587304515257848.post-34561526570684226002011-03-21T11:41:52.113-07:002011-03-21T11:41:52.113-07:00I have not seen any empirical evidence of this, bu...I have not seen any empirical evidence of this, but I have heard the guys on the Friday chat at Think or Swim mention something similar. They always advise rolling out within the last few days of the month. My background until a few years ago was strictly a covered call writer so I'm familiar with your story. <br /><br />I never closed out early and always looked forward to the first Monday after expiration so I could sell more calls. Back then I didn't understand IV so wouldn't have been able to know if there was an inherent disadvantage to selling on that Monday. I guess you can do your own VIX study and see if the net movement on the first Monday is statistically significant compared to any other day.Jason Haashttps://www.blogger.com/profile/08138027111150684908noreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-19620470547359785422011-03-21T09:42:40.956-07:002011-03-21T09:42:40.956-07:00Just for the record, at the moment the IV's fo...Just for the record, at the moment the IV's for QCOM calls are as follows:<br />April 55- 28.96<br />May 55 - 31.44sandeepnoreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-53815578332984627132011-03-21T09:38:21.937-07:002011-03-21T09:38:21.937-07:00Sorry to change the topic but I am not aware of a ...Sorry to change the topic but I am not aware of a better place to start this discussion where it will be seen (if there is let me know).<br /><br />Like many others I started in options by selling covered calls, and still have a lot of stocks in which I do that. I have never really analyzed it myself, but I've read that the Monday following options expiration is one of the worst times to initiate new covered call positions because the herd is all doing it at the same time, big supply, market makers take IV way down,etc...<br />Right now I have a bunch of short calls that expired on Friday, and I will be waiting for later this week or maybe next before I write them again.<br />So that gets me to wondering, if this phenomenon is real can we use it to our advantage? So on Monday if calls are cheap, maybe it is a good time to be a net buyer of options, such as buying an OTM call calendar, or call debit spreads. Obviously you would only do this if you liked the trade on it's own merit, but all things being equal and if that were the case, I wonder if there is an advantage to doing it on post-expiration Monday? Right now I own an OTM call calendar on QCOM (April/May 55), mid-price $1.05 as I write. I paid $1.04 for it but initiated this position on 3/11 and it has been a loser until today. Since I own it I watch it anyway, but if the underlying price were to stay the same it may be interesting to see if the price of the calendar changes much over the next few days.sandeepnoreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-42521375509588934212011-03-20T20:19:50.681-07:002011-03-20T20:19:50.681-07:00Brad: I'm still short 10 of the 48 strike call...Brad: I'm still short 10 of the 48 strike calls from my first trade and currently it's showing margin of $3,865Jason Haashttps://www.blogger.com/profile/08138027111150684908noreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-62850263572973702422011-03-20T19:56:33.395-07:002011-03-20T19:56:33.395-07:00There is some important info on VIX options at thi...There is some important info on VIX options at this link.<br /><br />http://www.cboe.com/micro/vix/vixoptionsfaq.aspx#8<br /><br />From what I have read, point 5 is one of the main points that the average retail investor fails to appreciate. I'm not familiar with VXX, I'll look in to that next. I think what many of us are looking for is a simple instrument to use just to make a bet on where we think future volatility will be relative to current volatility. If I figure out what that is I'll post it.sandeepnoreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-57039163207316944742011-03-20T19:54:32.371-07:002011-03-20T19:54:32.371-07:00So you were naked short those calls, what was the ...So you were naked short those calls, what was the margin on that?Bradhttps://www.blogger.com/profile/01150288297852995487noreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-63898665935923556582011-03-20T19:26:49.487-07:002011-03-20T19:26:49.487-07:00I have not traded VIX options yet, I'm in the ...I have not traded VIX options yet, I'm in the same boat as you on that, need to learn more about them. The first time I took a look at them it wasn't so straightforward so I put it off for another time. I traded options on the VXX which is a VIX ETN that has options. It isn't a great proxy, it has it's flaws. But they work exactly like equity options so I use it because I understand the risk/reward and there are no settlement complexities like VIX options seem to have.Jason Haashttps://www.blogger.com/profile/08138027111150684908noreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-75649287698038732512011-03-20T18:57:47.118-07:002011-03-20T18:57:47.118-07:00Nice trading. I need to study options on VIX, it i...Nice trading. I need to study options on VIX, it is something I haven't looked at, but from things I have heard on different webinars I understand that they are a little tricky for the average retail investor. Like futures, this is another instrument I want to add to my arsenal in order to be able to take advantage of market conditions when the opportunity arises. How long have you been trading VIX options and have you found them to be a fairly straightforward instrument to trade?sandeepnoreply@blogger.com