Best of Option Block 614: Unleash the Liberator Puts

08/27/18 • 61 min

This episode was originally posted on April 25th, 2017

Trading Block: Earnings today

Alcoa: $33, ATM Straddle $2 - approx. 6%
Chipotle: ATM Straddle $25.25, approx. 5.4%
VIX 'fear' gauge plummets as French election results spark global relief rally.

Odd Block: Calls and puts trade in GGP Inc. (GGP), puts trade in Exelon Corp. (EXC) and calls trade in MGM Resorts Intl. (MGM).

Mail Block: Question of the Week:

Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?

$AMZN
$GOOGL
$CMG
$MSFT

Listener questions and comments:

Follow-up comments from GameDay Dog:

You nailed it. I was assigned on 2 of the options. I knew that, but the (-) in my margin account was "alarming". My main thought was losing more than my spread safety net. The math did not make sense immediately. Glad to ask a question that made others ask questions. My bad...just heard episode 608...Yeah, I got assigned 2 of 3 my put spread. Way too early! I will get into better detail next time. Episode 208 had an excellent answer. That big negative number was stupid scary! I closed all the positions & sold the stock. The 1 short put & 3 long puts made it a back ratio spread when I closed it. It's funny now! PS - thanks for managing to get my questions on air. Once I closed the positions, I was able to sleep that night!!! Feels like I lost more than $300 though. By getting assigned the shares, it felt like I had more at risk and loss was influenced by the price of the underlying instead of the option. If that makes sense. Seeing the large margin number was not pleasant. My credit spread had a 30% chance of being ITM when I sold it too! Hahaha.

Question from Lesnod -How do you get out of the straddles? One side of a straddle is always a loss correct?

Around the Block/This Week in the Market

Apr 25: New Home Sales, Consumer Confidence
Apr 27: Jobless Claims, International Trade, Pending Home Sales
Apr 28: GDP, Consumer Sentiment

This episode was originally posted on April 25th, 2017

Trading Block: Earnings today

Alcoa: $33, ATM Straddle $2 - approx. 6%
Chipotle: ATM Straddle $25.25, approx. 5.4%
VIX 'fear' gauge plummets as French election results spark global relief rally.

Odd Block: Calls and puts trade in GGP Inc. (GGP), puts trade in Exelon Corp. (EXC) and calls trade in MGM Resorts Intl. (MGM).

Mail Block: Question of the Week:

Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?

$AMZN
$GOOGL
$CMG
$MSFT

Listener questions and comments:

Follow-up comments from GameDay Dog:

Question from Lesnod -How do you get out of the straddles? One side of a straddle is always a loss correct?

Around the Block/This Week in the Market

Apr 25: New Home Sales, Consumer Confidence
Apr 27: Jobless Claims, International Trade, Pending Home Sales
Apr 28: GDP, Consumer Sentiment

Previous Episode

Option Block 740: Trade Wars and Cannabis Stocks

Trading Block: Trump trade war is back on the tape - China implemented more tariffs on U.S. goods.

Earnings:

Thursday - HP, Intuit, Gap
Friday - Foot Locker

Odd Block: Rolling calls in Union Pacific Corporation (UNP), bullish paper in Coty Inc. (COTY) and opening puts in CBL & Associates Properties, Inc. (CBL)

Strategy Block: Uncle Mike Tosaw discusses investing in marijuana stocks.

Mail Block: Options question of the week

We're talking about #Crypto #Derivatives at the upcoming @BlockchainVoice Conference (register at http://VoiceOfBlockChain.com). So this week we want to know which #Crypto product you'd like to see listed on a major venue next.

72% - Bitcoin Options
8% - Ripple Options/Futures
15% - Ether Options/Futures
5% - Litecoin Options/Futures

Listener questions and comments: What's on your mind?

Comment from TradingTrooper -$CGC begins trading weekly options today
Comment from FContangotrader -@OptionPit @OptionVol greasy meatball and rock lobster combo lol
Re: Olive Garden $300 all you can eat pass: Comment from Volatility Trading -Low carb diets be damned

Around the Block: What are we watching?

Next Episode

Best of Option Block 648: Everyone Loves Cheap Lottery Tickets

This episode was originally posted on August 29th, 2017

Trading Block: A quiet day in the market.

Odd Block: Ratio put spread in Expedia Inc. (EXPE), ratio risk reversal in Dollar General Corp. (DG), and put-palooza in Pure Storage Inc. (PSTG).

Mail Block: Options Question of the Week

Look at #MayweatherMcGregor as #Options traders. @TheNotoriousMMA calls cost $1, pay $3. #Floyd calls cost $4, pay $1. Your trade?

30% - Buy #Connor Calls?
32% - Buy #Floyd Calls?
16% - I'd rather sell premium
22 - Whoever Wins We Love

Listener questions:

Question from Allan8 - Did Mark cash any calls on Floyd?
Question from LAXX - Is it me or do the Vegas odds makers do a very similar job to options market makers?

Another Options Question of the Week:

Let's get cheap! If you had to buy "lottery ticket" December calls for $.05 in one name - which would you choose? #HomeRun