Daily Stock Market Equity and Options Trading Commentary

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Friday, June 5, 2009

Mid-Day Options Watch

I am currently trying to sell some call options on the FAZ (3X financial bear) for the June $4. I purchased these shares this morning at $4.20 per share and am trying to return 12.5% in 2 weeks (assuming the option gets called out). The option has a greater than 70% probability it will expire in the money. The contract has a high of 70 cents today. I will keep you posted on this trade. Sphere: Related Content


JW said...

I liked your analysis on FAZ and I also am taking a position in the stock. I had been thinking about FAZ / FAS positions after reading about them on another site and your analysis made it final. I got in a little higher than you and missed selling the call at nearly $0.50 so I am planning on waiting until it clears $0.40 to sell the calls. Thanks for the ideas.

Marco H said...

Np problem, just be careful. I am a bit overweight financials which makes this hedge worth it for me. Good luck!

derivativesNYC said...

Marco, what strategies do you mainly trade (selling premium, covered calls, spreads, directional outright punts, volatility trading, etc.?)

Marco H said...

Thanks for dropping by! After I form an opinion about a stock depends on which strategy I use. For the last 3 months I have been bullish on financials. I have mainly been selling puts and writing higher out of the money covered calls on my shares. I have also been bullish on commodities and have been buying call spreads. I have not bought too many puts recently, but was my major strategy in September through December. I also have been monitoring the VIX and hedged my portfolio by opening up a call spread on that. What about you?

Anonymous said...

i am new to options and appreciate your articles. can you explain in more detail how you actually calculate the probability %s in such a way that i can replicate the numbers with readily available historical data? also, please expand on how to use your data to select specific buy-write opportunities.


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