Forex Is Crazy

E-mail: JasonAndrewHaas@aol.com Tweet

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I was short weekly calls on ZB that expired last Thursday before Easter at the 120, 121, and 122 strikes. The 121/122 expired worthless but I chose to not buy back the 120 at a loss and rather inherited a short position at a cost average of 120'14. Even though I had previously stated I was going from bearish to neutral on ZB , I was willing to stay short this one contract until/unless we broke to a new high. We had been in a tight one-point range for the last four days but broke above it in after hours today so I took the loss for (-$1125). In retrospect, it's interesting that last week in my post I said my gut tells me we're going to 122 so I wasn't looking to get short until then, but yet I wasn't the least bit interested in playing it from the long side up until that point. That tells my own biases were a little stronger than common sense. Also mentioned in that previous post, I have followed through and entered some OCO orders to get short at 122 with a tight st...

As I commented on my previous trade that I closed out, I mentioned that I would be looking to get back into a trade in the QQQ to the short side using June options. Today the VIX has pulled back a ton, giving back all the gains from just a day ago. So I sold 10 Jun '11 57/58 callspreads for $0.45, or $450. I also bought 20 Jun '11 Quarterlies/ Jun '11 Calendars -->buying the quarterlies and selling the Jun regular expiration options. I put these on for $0.21 debit or a total, $420. So my total risk for combined positions is $970, with total upside of about $1650. Above is my aggregated risk profile. I like the calendar using the $55 strike because I still have a target of around $54-$55 on the QQQ and I like the additional upside for an uptick in Volatility. So I may peal pieces of this off on any spike in volatility, which I think we will be seeing more of as we move closer to the expiration of QE2. I sold the callspreads to finance the calendars, but also sold them bel...

Long before I ever subscribed to technical analysis I got by for many years on instinct, intuition, The Force, whatever you want to call it. I've been playing ZB for four months now using TA around the fundamental forces behind the interest rate/inflation story. Last week I closed out of some short ZB and felt like I was at a reset moment. I was still short some OTM calls that didn't expire for two weeks but at the time they were a full 3'00 OTM and I wasn't ready to close out early yet, other than those I was ready to reset. I've been watching the ZB chart like I watch TV for a while now and all I can tell you is that my gut instinct says something has changed. I got short one contract on Friday simply because we were up 3'00 in three days, that's good enough for me to take a short-term downside shot. But after watching the combination of price and volume after I entered  my trade I felt something has changed. In watching the BxA sizes I noticed that there ...

By one measure this was my best ever month financially, but just as I felt that  last month's tally of $575 didn't paint the whole picture, I also feel this month wasn't as good as it looks. Though I've had bigger recorded gains in a month before, most of those gains were from long-term spreads that were building in value over time and finally got recorded in the month they were closed out; where as all of this month's gains were derived within the April options expiration cycle. So I am excited to book $11,357 in gains derived from the last few weeks of trading, but the instruments and leverage involved has to be kept in context. Up until about six months ago I was almost exclusively an equity options premium seller, now I'm also trading futures and these cut both ways. Last month I only had a few losing trades, but two futures trades in particular almost completely wiped out about 15 winning equity option trades. This month my futures trades went my direction...

A few weeks ago I traded my first VIX options. I just thought that with VIX at 17 and its relative lows at about 15 that I would sell some 17 strike puts. My feeling was I could just roll out to the next month and down to 16 if it went below 17. So that theory is flawed for a few reasons but the main thing I didn't consider was that below 17 there isn't really any premium to be had because it historically doesn't trade for much less, which makes sense as the reason I was interested in selling puts in the first place was that VIX doesn't normally trade this low and can't go to 0. The reason I exited the trade was with about six days left until they expired they were still trading .05 away from where I entered, but VIX was also trading about the same place and the next month options didn't look very enticing. I took a look at the option chain and the price for the 17 put is about the same. So this made no sense to me for the weekly and monthly premiums to be near ...

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So since the free version of LiveVol is no longer, I have been using the TOS platform to get a visual even though I don't like it compared to what I'm used to at LiveVol. But today I pull up IV on TOS for (RMBS) and I know by eyeballing it that it's not correct because I've been following my APR position daily and taking a look at MAY periodically as well. So I pull up the option chain to see what that says versus the IV chart and I confirm that it's wrong. Then I use LiveVol and that chart looks correct to me from what I've been seeing the last few weeks, and also matches the option chain information. Here is my question, why are they different? Does anybody know what the IV is measuring on TOS? Can I check it, change it, etc.? I don't want to pay for LiveVol but if I can't rely on TOS then I have to look elsewhere. IV on TOS is showing 84, that is not correct, how do I find out where they got this from?

I have been waiting to pull the trigger on this short for sometime and with the inability to go up as of lat after the recent pop...I am ready to place my bets. I don't get much time trading my personal account but this is a simple of enough trade that I don't really have to babysit that I am willing to pull the trigger. I bought May '11 $57 puts on the QQQQ and sold some 59/60 May call spreads to partially offset some of the theta decay. I am really making two statements with these trades...first I believe that the NASDAQ is setting up for a trade lower...and second that I do not think that the highs at $59.04 will be taken out between now and May expiration. I also believe that traders are going to start pricing in the end of QE2 soon which I think should put downward pressure on equities. Anyways I am only risking a total of $2,080, but I really am not risking that much because if the highs get taken out I will get out of the position.

I was conflicted yesterday about taking profits at 119'00. I've had a GTC order in to cover 2 contracts at 118'16 for several weeks. But like I mentioned in yesterday's post, I didn't want to watch profits evaporate as they had in the past so I felt I needed to take some of them. Well sure enough a few hours later my last short contract gets covered at my target price which means I left another $500 on the table from yesterday's close out. But looking at the chart, if 118'14 turns out to be a tradeable low, then I will be happy I got out. What if that low was 118'17 and thus I didn't get out of my trades for being stubborn on price at 118'16? That's the battle I still struggle with, when to override your game plan. It's easy to look at a chart later and say should've, could've, would've. So while it sucks to wake up and realize you probably flushed $500 by not being patient, what I have to remember is I felt it was the right m...

We're down two full points 2'00 in the last 36 hours on ZB. That's kind of a big move and since we're already down from 123'07 to 118'22 in the last two weeks I need to lock in some profits here. The contract I just sold at 119'00 in after hours was shorted at 120'16 back on 3/10/11. I missed my desired exit point weeks ago by a few points and was upside down on that one by as much as ($2500) at one point, so don't want to repeat that performance. I need to concentrate less on calling tops and bottoms and more on taking large pieces of the middle. I've got one short contract left and still short some OTM calls that expire in two weeks. If we get another down move this week I'm probably closing those out early. This has been an incredible ride. I hesitate to close these out not knowing when/if I will get another attractive entry point. It feels like not wanting to go home after vacation is over.

I was executed on an options trade 15 minutes after the market closed. Has this ever happened to anybody else? I'm not complaining, I got filled at my limit price, just wasn't aware it could happen.

This is a new position initiated today. Just following an options advisory service on this one. The rationale is that the stock has been rangebound between $40-$44 the last few months. I like calendars in this environment so I'm willing to take this trade based on their rec. http://screencast.com/t/gLyJ23aLoS

I have heard several "experts" claim that options decay every day, weekends and holidays included. In my experience I have not found that to be the case. I have sold options on a Friday afternoon, sometimes even before a 3 day weekend, and have found that if the market re-opens at a similar level, the option price at the open is about the same as it was at the Friday close. It makes sense for this to be the case, I would assume that market makers just use number of trading days in their options pricing model, so theta decay between Fri-Mon is just 1 day. Furthermore it seems to me that the theta decay in the market maker's model probably occurs sometime in the early afternoon on any given day, so all other things being equal the seller of an option at the end of the day should not expect to see any theta decay until the afternoon of the following day, not right at the open. I am wondering if anyone has any different thoughts on this, and why some "experts" insi...