BWB - There seems to be lot of Buzz around

I analysed two short term trades to play the overall bearish market sentiment. If I am wrong, I recover my commission, if I am right, I make points.

Trade 1:



Trade 2:


Comments welcome.
Trader R

Learning New Strategy

I am experimenting with a new strategy which seems promising. I am going to put up a few paper trades over the course of next 2 weeks and see how they perform. Here is the first one:

Is this a bullish or a bearish trade???

One of the questions I have on this strategy is that the spread seems too high. Not sure at what price can I enter such trades.

Those with Optionetics Platinum can track the trade here.

Here is an article

TraderR

New Potential Credit Spread

GM:
Bounced from 50D MA with large candles. I am consedering a Bull Put Spread on this trade.
Sell 27.5P
Buy 25.0P for $80 credit
Money Stop: Loss of $80 (correspond to Tech Stop of $25.8)

FCX
Bounced 200D MA with large candle and more than average volume.
Sell 55P
Buy 50P for $165 credit
Money Stop: $80 which corresponds to technical stop
Technical Stop: $52.50

Update 1

My SNDK fly was wrong in direction. So I took paper loss and moved on
My GOOG fly is still in the market. The fact that GOOG has not gone back to previous highs may turn out to be good for me as I want this increase to happen around September.

How to trade earnings using Fly?

Hi,
In this post, I am attempting to use a butterfly to trade earnings. Stock I am using is SNDK.
The earnings expectation has shot up the IV of the options. Earnings on 20 April.
Fly benefits from a IV crush.
However, a high IV implies that traders are expecting a big move in stock. So ATM fly is ruled out.
How about a directional fly? Sounds like a good idea.
But, for fly to make money, you need to be right on direction, expected price and time.
In this case, I am willing to bet as follows:
Direction: Up
Expected Price: Previous major resistance
Time: Around earnings
To back up my 'prediction' I will have to risk money.. so there you go:



I am willing to risk $40 per contract to test my prediction. If I am right, $$$$$$, but what if I am WRONG?

Who cares... I manage that question by making sure my max loss is small.

Happy Trading
Trader R

My GOOG Fly

Hi
I wanted to post my Google fly I put on almost 2 months back. On ToS platform it is showing me a profit while on Platinum it is showing a large loss. Obviously the large loss is wrong as I cant loose more than my debit of $10 per trade :-)

I am toying with a new idea - Double Cal

Hello Traders:
I was reading the Option Trader Mag, a free monthly e-magazine where they were talking about Double Spreads. I thought why not try one (on Paper).
So here you go: One on SPY




This is essentially 2 calendars (May - June 128 put and 130 call).
Max risk is $135
Max reward $123
However, BE and max reward are sensetive to IV.
The vega of this trade is $9.79.
I did some IV stress test on this trade. It is sensetive. I am putting it on my blog to track it and see how it looks.

Here is one tip: Do call & put calendar just OTM and not a few strikes OTM.
I believe the DC trade works better if strikes are closer together.

I will write more about is later.
Trader R

PS:
(Note: I have directly copied the picture above from Platinum. Here is how:
Right click on the chart & select copy image location
Paste the location in place of ccc in following command:
< i mg src="ccc"/>
Just make sure there are no space between <,i and mg