Income with Options
Or you can get a bit greedy and sell Oct 25 calls at $0.33. Making your options position into a short strangle. The strike is 10% away from the spot price with ~ 18% probability of expiring above $25 with 23 days to go to Oct expiration. Just throwing it out there as a choice that an option put seller has.
Option Hedging Strategies
@helenparent you are trying to spam your way to success. Good luck with that... banned
On Friday, the largest trade in LinkedIn's options was an "iron condor," a complex strategy that involves buying and selling of call and put options simultaneously.
Buying a call conveys the right to purchase shares at a fixed price in the future, while buying puts conveys the right to sell shares. Selling calls and puts creates the opposite obligation.
The trade would have delivered its maximum return if LinkedIn shares effectively flatlined around Friday's level near $131 over the next two months. But then LinkedIn shares shot up 47 percent after the Microsoft news, torpedoing the trade and leaving the trader with an estimated loss of nearly $1 million.
The trader, whose identity is not known, bought 500 LinkedIn calls betting on the shares rising above $185 by mid-August, and sold the same number of calls betting on the shares staying below $160 by that date.
At the same time, the trader also bought 600 puts that would profit if the shares dipped below $115, and sold the same number of puts that bet the shares would stay above $125.
Options Tools | Options Brokers
@nobo Robinhood does not support options trading at all. I also found that their platform is mobile only, which is a limitation for me personally. I do not own an iPad :)
Commodity Options and Futures
Hedge fund short positions have declined by the equivalent of 1,127 billion cubic feet, or 40 percent, in the last four weeks. By contrast, long positions have risen just 544 billion cubic feet, or 16 percent.
Hedge funds are reacting to signs the gas market is rapidly rebalancing from oversupply in 2015 towards a potential deficit in 2017 (“U.S. natural gas market rebalancing well underway”, Reuters, Sep 16).
Low gas prices have gradually eroded the excess supply by causing production growth to stall and go into reverse while encouraging record consumption by power producers.
Rebalancing has been accelerated by unusually hot weather across the most populous parts of the United States this summer.
F.A.Q. | Announcements
This past Tuesday, August 30th, the CBOE began trading SPY options that expire on Wednesdays. They are “p.m.” options, meaning that they settle at the end of the day on their expiration date. These fall under the general category of “weekly options,” which means they will be listed on a Tuesday, and there will be up to 5 expirations in effect at any one time. Otherwise, they are the same as any other SPY option. The CBOE has said that there was a demand for these Wednesday listings. When I first heard that there was going to be a Wednesday expiration, I thought it was to align a SPY expiration with a $VIX expiration. I thought perhaps there was a need for hedges on SPY and $VIX (such as the ones we often use) to expire at the same time. However, $VIX options expire on Wednesday, with an “a.m.” settlement. So the “p.m.” settlement on the Wednesday SPY options belies my theory. So, I can’t really figure out why there was demand for these Wednesday listings. Regardless, they exist, and they are already trading heavily. Just be careful now when you pull up your SPY option montage that you are indeed trading the option you intended to, as far as the expiration date is concerned.
printed courtesy L. McMillan
SPX Monday-Expiring Weeklys Options to Launch on August 15
CBOE plans to list S&P 500® Index (SPX) Monday-expiring WeeklysSM options, beginning August 15, pending regulatory approval. With the expected introduction of SPX "Monday Weeklys," CBOE will offer SPX Weeklys options (SPXW) with Monday, Wednesday and Friday expirations. CBOE presently offers End-of-Month SPX options which feature expiration dates that fall on the last business day of the month.
SPX Weeklys options are one of CBOE's fastest-growing products. SPX Wednesday-expiring weekly options had record average daily volume of more than 114,000 contracts last month.
Contracts with weekly expirations allow investors to:
• Implement more targeted buying, selling, spreading or hedging strategies
• Trade around breaking news or known economic events
CBOE pioneered short-term options trading in 2005 by introducing the first weekly expiring options contract.
For more information on SPX Weeklys options, please visit www.cboe.com/SPXW.
Still Institutional investors are better informed then crowd. Recent example is the last job report - institutional were buying one day before the job report while the crowd was selling http://www.spreadvectors.com: