Update on ISRG option trade

To get some practice trading earnings, I put on a trade on the simulator account yesterday.
I bought 100s ISRG, sold 1 ATM call strike 350, and bought 1 ATM put strike 350 which both expired today. I lost around $150 due to the crappy bid ask spread.

I sold the 100s of ISRG for a loss of -$4,121
Covered the call I Sold for $1,818
Sold the Put I bought for $2,098
Overall on this trade I lost $205, which is really breakeven when you subtract commissions, because I had to pay up due to the large Bid/Ask spread on this thinly traded stock.

I also sold 10 calls at the 400 strike which expired today.

I obtained the max profit of $3,243 on this trade.


Here's the P/L from the trades-

Earnings Option Play

ISRG is trading near all time highs and has earnings out after the bell today.
I've noticed that when stocks are near all time highs and look to be overvalued, that they tend to dissapoint. (except for FSLR which DT got screwed on when it gapped up like 50pts). Anyway, looking at the options on ISRG which expire tomorrow, you could sell some out of the money calls 50pts OTM and collect $300 for every contract so as long ISRG doesn't gap up over 50pts on earnings, putting it up over 400pts (which is ridiculous IMO). I think this stock is going to drop on earnings, however the healthcare feild is still going strong even during these times of economic instability ,,,cough,,recession...The risk of the trade, well if ISRG pops up say, 70pts, then you could be out around $2,000 for every contract. Needless to say, these options are juiced for a big move either way. If you wanted to hedge this trade, you could go long a certain amount of shares, or go long a further out call option, but the real money is going to be made selling the right options ahead of earnings.

To get some practive trading earnings, I've put on a trade on the simulator account.
I bought 100s ISRG, sold 1 ATM call strike 350, and bought 1 ATM put strike 350 which both expire tomorrow. I lost around $150 due to the crappy bid ask spread.



I also sold 10 calls at the 400 strike which expire tomorrow. Max profit is around $3,400 with unlimited risk of loss...



ISRG April Option ladder straddle view

ISRG near all time highs

A Wild Week and the Chop continues

This market must be tough for swing traders. Are people surprised to see the market chop around for a month. Perhaps another month of chop is to come. I imagine there were a ton of Puts bought and Strangle strategies put on in the last few weeks. One thing is for sure, it looks like Option sellers have been making bank on the high premiums and increased Vol.

ER2


ZF


In order for this market to grow some BULL legs, C and XLF need to show some buying.


EWZ, Go Brazil!


ZB 30yr


ES- Option Sellers are making Bank. Not sure how Option buyers are making out.


My simulator hedge trade is now negative $600. I'm looking to see if it will go to $-2k or $-4k before reversing back. The market is behaving as I expected now that this trade is negative; moreover; ER2 and ZB are more bearish and ES and ZF are more Bullish. The reason this trade was in the green by $2k a few days back had to do with the steeping yield curve.

BondTalk.com is a great website for learning

Checkout Daily Treasury Yield Curve Rates for historical data on interest rates.

Also Checkout The Living Yield Curve



30yr swap bond futures

Give me your recommendations

Hey Traders-
I'm looking for some good stocks to short.
I think Chinese stocks are due for some carnage shortly. Today Petro China became #2 in US market cap,,,,makes me want to puke. It's market cap is almost as high as XOM,,,,,,,
I'm speechless, with options expiring tomorrow, I see this as a temporary blow off top, with eminent damage coming in the form of a bloody bear attack.

Please people-
I'm looking for good stocks to short- (preferably Chinese related with OPTIONS)
Because many of the Chinese stocks are so volatile, I'm looking for option strategies as well (probably bear call credit spreads), so akalawoo and all you other option traders, give me some ideas.!!!
Time frame I'm looking for is 3-12 months, with possible front month writes.
Max debit I'm looking for is $500 but will allow up to 2k.
Let me know people.
FXI to $160 in 6 months,,,,you heard it here first.

Market outlook for week of March 12-16 is,,,,,BULLISH!

I don't normally make predictions, but since everyone is doing it....and if I get this one right I might look good for calling it, so what the hey. All of the markets around the world tanked 2 weeks ago, and now we have the Shanghai index almost back to its 52 week high on this sunday night, and next week is end of the quarter for the big funds. The big economic #'s come out thursday and friday with nothing worth noting on monday. I think most retail investors are looking short because the chart setup looks so dandy as a bear flag, however, I'm looking at the volume profile and see that we are inches away from the lower end of the big selloff created on Feb 27. When looking at the weekly volume profile I see a volume gap, which, if you were to look at it, you would say we need to go up because there is weak shorts in this area that should be taken out. Also, the last week of the quarter can be volatile, and I've seen in the past that the bias is bullish because the large majority of long funds well be doing there usual window dressing. On the last friday of the quarter during the final 2 hours I see selling from funds closing out positions for end of the quarter statements. The "smart" call option sellers from Feb 27's selloff should have closed out all of there positions last week because most calls were so close to expiring worthless that it wouldn't be worth the risk of keeping the options open until expiration. We have a lot of money being thrown into QID, but what if the unthinkable happens and that volume gap in the stock market is filled? That quick money thrown into QID will be hurting, and shorts will be covering, and the market will rally, and retail investors will just shake their heads and say "when will it ever stop going up!".

In the eyes of Mr.Market, there are just to many VIRGINS (POC's) up there! (that's a market profile joke, yeah, I know I'm COOL!)




So there you have it, that's my reasoning for the bullish bias, however, if I'm wrong it won't matter for me, because I only trade intraday based on my signals given by my indicators. HAHA!! Good luck Swing traders!