Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Dec 14, 2016 3:25:20 GMT -8
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Post by dreamRaj on Dec 14, 2016 4:00:49 GMT -8
Always an amazing job, Since84! Your opening post is the best thing to start the day with. Thank you.
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Post by hledgard on Dec 14, 2016 4:48:37 GMT -8
Ditto. Love it !
T H A N K S !
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Dec 14, 2016 5:46:10 GMT -8
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Dec 14, 2016 7:05:09 GMT -8
I have found that selling LEAPS is a great way to maintain a balanced frame of mind as the fickle market drives us irrationally up and down. If you manage to sell them right before earnings, the irrational declines give you a chance to buy them back cheaply. Unlike initially buying the options, time is your friend since it doesn't break my heart if they expire worthless.In addition, it doesn't hurt to be on the same side of the table as the market manipulators. All this is mainly for peace of mind, sort of a psychological hedging.
Right now, VXAPL is around 18. Historically, this is about as low as it gets. I can understand why historical volatility is low, but implied volatility doesn't make sense to me. It should be a function of uncertainty in the market, and I cannot think os a time since 2008 where there is more uncertainty about the market. On the one hand, bringing back the overseas money could give the stock a real boost. On the other hand, the market looks frothy to me. This kind of sudden irrational "rally" almost always precedes a dramatic bust. I am not predicting either, but I would think uncertainty would be at least average which would put volatility in the low thirties.
Does anyone have a theory about this?
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Post by sponge on Dec 14, 2016 12:23:25 GMT -8
What a crazy day.
Well I am out. Sold my 115 calls for 230% gain😜. Could have been 300+% had I sold an hour earlier. Glad to make money.
Normally I would get out at RSI of 70, but time was running out. We may very well see that this week or the next two. At this point it is just a guess as to timing. Plan to buy some puts in the near future.
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Post by rickag on Dec 14, 2016 12:25:04 GMT -8
What a crazy day. Well I am out. Sold my 115 calls for 230% gain😜. Could have been 300+% had I sold an hour earlier. Glad to make money. Normally I would get out at RSI of 70, but time was running out. We may very well see that this week or the next two. At this point it is just a guess as to timing. Plan to buy some puts in the near future. Congratulations
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Post by hledgard on Dec 14, 2016 12:49:56 GMT -8
Now owning both the iPhone 7 and the new MacBook Pro, I am impressed. I must say these are two solid products. They are in keeping with Apple's reputation and mission - simple, well-crafted products that place a premium on ease of use.
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Post by archibaldtuttle on Dec 14, 2016 13:52:18 GMT -8
I have found that selling LEAPS is a great way to maintain a balanced frame of mind as the fickle market drives us irrationally up and down. If you manage to sell them right before earnings, the irrational declines give you a chance to buy them back cheaply. Unlike initially buying the options, time is your friend since it doesn't break my heart if they expire worthless.In addition, it doesn't hurt to be on the same side of the table as the market manipulators. All this is mainly for peace of mind, sort of a psychological hedging. Right now, VXAPL is around 18. Historically, this is about as low as it gets. I can understand why historical volatility is low, but implied volatility doesn't make sense to me. It should be a function of uncertainty in the market, and I cannot think os a time since 2008 where there is more uncertainty about the market. On the one hand, bringing back the overseas money could give the stock a real boost. On the other hand, the market looks frothy to me. This kind of sudden irrational "rally" almost always precedes a dramatic bust. I am not predicting either, but I would think uncertainty would be at least average which would put volatility in the low thirties. Does anyone have a theory about this? Would VXAAPL be low because the stock has moved sideways for so long? Expectations are that it's going to continue to move sideways, hence VXAAPL is low...
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Dec 14, 2016 14:18:22 GMT -8
I have found that selling LEAPS is a great way to maintain a balanced frame of mind as the fickle market drives us irrationally up and down. If you manage to sell them right before earnings, the irrational declines give you a chance to buy them back cheaply. Unlike initially buying the options, time is your friend since it doesn't break my heart if they expire worthless.In addition, it doesn't hurt to be on the same side of the table as the market manipulators. All this is mainly for peace of mind, sort of a psychological hedging. Right now, VXAPL is around 18. Historically, this is about as low as it gets. I can understand why historical volatility is low, but implied volatility doesn't make sense to me. It should be a function of uncertainty in the market, and I cannot think os a time since 2008 where there is more uncertainty about the market. On the one hand, bringing back the overseas money could give the stock a real boost. On the other hand, the market looks frothy to me. This kind of sudden irrational "rally" almost always precedes a dramatic bust. I am not predicting either, but I would think uncertainty would be at least average which would put volatility in the low thirties. Does anyone have a theory about this? Would VXAAPL be low because the stock has moved sideways for so long? Expectations are that it's going to continue to move sideways, hence VXAAPL is low... The historical volatility is just the standard deviation of the past prices, so yes, it is low because the stock has moved sideways. The question i am trying to ask is "Why, in the face of such uncertainty in the market, is the implied volatility (i.e. the expected future volatility so low?) BTW, if you are a buyer of options, this is a great opportunity.
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Post by rickag on Dec 14, 2016 14:53:57 GMT -8
Would VXAAPL be low because the stock has moved sideways for so long? Expectations are that it's going to continue to move sideways, hence VXAAPL is low... The historical volatility is just the standard deviation of the past prices, so yes, it is low because the stock has moved sideways. The question i am trying to ask is "Why, in the face of such uncertainty in the market, is the implied volatility (i.e. the expected future volatility so low?) BTW, if you are a buyer of options, this is a great opportunity. So a long term strangle or straddle might be the conservative bet, which I believe you already discussed.
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Dec 14, 2016 22:48:21 GMT -8
The historical volatility is just the standard deviation of the past prices, so yes, it is low because the stock has moved sideways. The question i am trying to ask is "Why, in the face of such uncertainty in the market, is the implied volatility (i.e. the expected future volatility so low?) BTW, if you are a buyer of options, this is a great opportunity. So a long term strangle or straddle might be the conservative bet, which I believe you already discussed. Yes, I am just trying to understand why we have this phenomena. It is the extreme low value that caught my attention. IM under 20 seems to indicate that the market has confidence that nothing will move AAPL either up or down. Since IM is a result of the thousands of bets that have been made on options, it is a pretty direct measurement of sentiment. So I just wondered why other people are so confident that it will not make a major move. Any ideas?
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Post by rickag on Dec 15, 2016 4:10:22 GMT -8
So a long term strangle or straddle might be the conservative bet, which I believe you already discussed. Yes, I am just trying to understand why we have this phenomena. It is the extreme low value that caught my attention. IM under 20 seems to indicate that the market has confidence that nothing will move AAPL either up or down. Since IM is a result of the thousands of bets that have been made on options, it is a pretty direct measurement of sentiment. So I just wondered why other people are so confident that it will not make a major move. Any ideas? I have no idea other than people are waiting for the next new product from Apple. This seems to discount the very real possibility of repatriation which I would assume will move AAPL up.
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