Just realized I made $14.8k this morning

To add to the post. GDX is setup as a calender spread. Notice how all the strike prices are similar on each spread but the expiration changes. This also shows you why this specific week is probably the toughest week because look at the prices. One of the short legs are worth 27c while the long leg is worth $1.48. I always shoot for a 1:3 ratio in terms of price, but that wasn't a possibility for this week. Next week the prices on the options will naturally be lower because there is less time till expiration. So in actuality after this week we'll have a good steak of weeks coming up were the ratio becomes more favorable.

For LNKD, I couldn't even setup a calender spread because the ratio was something to 1:6. It leaves too little room for error. I mean we can still make money if movement is very minimum for the stock throughout the week, but its risky. I need to make sure we have ratios up were I can sustain a 5% move on the stock in a single week and come out on top. So for LNKD we opened a regular vertical spread. The expiration date is the same, but the strikes are all different. In this case, I'm actually expecting for LNKD to move a bit. Right now it's at $97 trading. If LNKD ends up finishing over $100 by Friday, that short leg we sold for $4.32 will expire worthless so we will pocket the whole $4.32. Our hope is then that the difference between all the other 3 legs isn't more than a $4.32 loss. If we lost about $2 per option share out of the other 3 legs, then we basically pocket the $2.32 out of the this whole position.
 


Just saw your posts, I looked into it and I will probably pass on this one.
Would be nice if you could let us know about results though.

So, LNKD went up 3%+ today so far, would you still suggest the trade 1:1 like your setup?
It looks like it requires $25k in margin, what's the worst case scenario? ;)

btw, are those 17th Nov expiration? I was confused since your screenshot says 12th
 
btw why LNKD? aren't you looking for slow movement?
The last couple of days were all like up to 5% back and forth for LNKD it seems
 
You're setting it up wrong if you have a margin requirement for LinkedIn. My positions were opened with no capital held. It's a 1:2 ratio.

These are 17 Nov expiration. Well just like you mentioned, +5% then -5% is actually the ideal situation. We will make more the more choppy the movement is. But when we compare the entry day with exit day, it shouldn't be that that far, but what we do want in between is a lot of chopness.

So far LNKD today is pushing up strong - 3.22%. That's fine. There are still 4 days left in the trade. The overall markets are bearish right now, so rest assured we'll see LNKD take another hit at some point this week.
 
mGrunin said:
You're setting it up wrong if you have a margin requirement for LinkedIn. My positions were opened with no capital held. It's a 1:2 ratio.

These are 17 Nov expiration. Well just like you mentioned, +5% then -5% is actually the ideal situation. We will make more the more choppy the movement is. But when we compare the entry day with exit day, it shouldn't be that that far, but what we do want in between is a lot of chopness.

So far LNKD today is pushing up strong - 3.22%. That's fine. There are still 4 days left in the trade. The overall markets are bearish right now, so rest assured we'll see LNKD take another hit at some point this week.
Click to expand...

I understand, thanks for explaining.
Btw I still didn't open the position (the bet doesn't really appeal to me, now that I saw it rising to $100+).
I wish you best of luck on this one, would be nice if you update us on your results!
 
I'll update this thread on Friday. Believe or not, my LNKD position is now in the green. I'm still underwater on GDX since it has been moving down heavily for the third day in a row. It's all good, still good time left to see a pop happen.
 
Can't take a look since I'm mobile but its probably a major short squeeze. The short interest was probably huge going into the lock up. When the stock didn't drop as much as the shorters thought it would, panic ensues and the shorts start covering. After that its a domino effect that keeps pushing it up.

You can see a similar thing happen with Yelp two quarters ago. Missed earnings. But didn't drop as much as shorters thought it would. Well there was a massive short covering pushing the stock several points up.
 
mGrunin said:
Can't take a look since I'm mobile but its probably a major short squeeze. The short interest was probably huge going into the lock up. When the stock didn't drop as much as the shorters thought it would, panic ensues and the shorts start covering. After that its a domino effect that keeps pushing it up.

You can see a similar thing happen with Yelp two quarters ago. Missed earnings. But didn't drop as much as shorters thought it would. Well there was a massive short covering pushing the stock several points up.
Click to expand...

So maybe it's a good entry point to short FB?
 
I wouldn't personally touch Facebook for another week or so. It has been at this $20 level for the past month or so and has formed quite the support here. If I had to pick a position, I would be looking for upside potential in the midterm.

By the way, checkout LNKD. It's now at $97.93 and I am up 5% overall on the position.
 
mGrunin said:
Can't take a look since I'm mobile but its probably a major short squeeze. The short interest was probably huge going into the lock up. When the stock didn't drop as much as the shorters thought it would, panic ensues and the shorts start covering. After that its a domino effect that keeps pushing it up.

You can see a similar thing happen with Yelp two quarters ago. Missed earnings. But didn't drop as much as shorters thought it would. Well there was a massive short covering pushing the stock several points up.
Click to expand...

I'm retarded when it comes to most things, stocks included, so is this essentially what happened:

1. Shorters thought FB was going to shit the bed today.
2. Stock doesn't shit the bed - for various reasons, however I'm guessing the much better than expected earnings report is one of them.
3. Shorters see that the stock is not dropping, they obviously begin to cover.
4. A chain reaction basically takes place.
5. Fb up 12%

So uh basically, what the other guy said, doesn't this seem like FB is looking for a couple % drop in the coming days?
 
stick2Herbs said:
I'm retarded when it comes to most things, stocks included, so is this essentially what happened:

1. Shorters thought FB was going to shit the bed today.
2. Stock doesn't shit the bed - for various reasons, however I'm guessing the much better than expected earnings report is one of them.
3. Shorters see that the stock is not dropping, they obviously begin to cover.
4. A chain reaction basically takes place.
5. Fb up 12%

So uh basically, what the other guy said, doesn't this seem like FB is looking for a couple % drop in the coming days?
Click to expand...

Lol. I was trying to short when it was 8% up, but then it went 12% up and I covered.

Today I was making around $1k by just selling vertical spreads (AAPL).
Options are expiring tomorrow, and basically I just sell 550 Calls for example (they are a few cents). I think this is a no-brainer, what are the chances that AAPL will rise 5% tomorrow?
It's ridiculous that this doesn't even require margin, but it requires that I also open a call position (which usually just cuts my profit, and I guess it's good to have it for safety reasons).
So all in all this honestly just seems to be to good to be true. I nearly opened a huge position today to sell 1000s of 550 Calls, but I'm afraid because this would be huge... I think it would have netted me over $5k tomorrow if they expire, but I went for something smaller
 
ameyer said:
Lol. I was trying to short when it was 8% up, but then it went 12% up and I covered.

Today I was making around $1k by just selling vertical spreads (AAPL).
Options are expiring tomorrow, and basically I just sell 550 Calls for example (they are a few cents). I think this is a no-brainer, what are the chances that AAPL will rise 5% tomorrow?
It's ridiculous that this doesn't even require margin, but it requires that I also open a call position (which usually just cuts my profit, and I guess it's good to have it for safety reasons).
So all in all this honestly just seems to be to good to be true. I nearly opened a huge position today to sell 1000s of 550 Calls, but I'm afraid because this would be huge... I think it would have netted me over $5k tomorrow if they expire, but I went for something smaller
Click to expand...

No margin is being held because you are opening a long position for your short leg. Mind posting an actual position you are holding? I wouldn't mind seeing how you setup your long leg since I'm a bit confused as to how you can pick up a gain so easily when your long leg most likely has much more value to lose and has a bigger delta.
 
For one of my classes my buddy has to trade 100k on a practice account. And basically I've been doing all his trades for lulz, and he was up to 140k in 3 months. Then I told him to short FB and this happened, lost like 20k.

Even though I have no idea whats actually going on when I make trades for lulz, I lost 20k in that trade or some shit like that.

I really thought I had what it takes to become a jewish financial advisor. Guess not.

tumblr_lxrrquzjck1r0men0.jpg
 
stick2Herbs said:
For one of my classes my buddy has to trade 100k on a practice account. And basically I've been doing all his trades for lulz, and he was up to 140k in 3 months. Then I told him to short FB and this happened, lost like 20k.

Even though I have no idea whats actually going on when I make trades for lulz, I lost 20k in that trade or some shit like that.

I really thought I had what it takes to become a jewish financial advisor. Guess not.

tumblr_lxrrquzjck1r0men0.jpg
Click to expand...

The previous post you made that went over what I said was correct, a lot of the rally occurred from shorts covering asap.

Also, I don't believe any position in FB should be opened at the moment. Wait for a trend, don't try to anticipate one.
 
mGrunin said:
No margin is being held because you are opening a long position for your short leg. Mind posting an actual position you are holding? I wouldn't mind seeing how you setup your long leg since I'm a bit confused as to how you can pick up a gain so easily when your long leg most likely has much more value to lose and has a bigger delta.
Click to expand...

I don't have the past positions on hand now, but this is what I currently have:
Short: -50 X AAPL 16th NOV, 550 Call, Average cost $18.55
Long: +50 x AAPL 16th NOV, 560 Call, Average cost $12.25

I'm using presets that my broker is giving me. Maybe this is stupid and I was just lucky, but the long leg always costs less than the short leg this way (12.25 vs 18.55 here). So I just assume that i will collect the $18.55 after expiration and lose the long leg 100%. But if something goes horribly wrong I don't care since I don't hold margin, and the long leg comes into play.
Basically, from my perspective the long leg only exists so I don't have to hold margin ;) (on this trade I probably would have needed a 6 figure margin).
I also could choose a cheaper long leg (580 for example) or I could even close the long leg immediately it seems, but I'm not sure about the consequences if something really goes wrong (like if APPL ended up at $579)
 
The long leg in those positions cost less because it is further OTM. With this setup, 100% they are holding a margin against you because this is a credit position. If anything goes horribly wrong and the stock actually rallies up, then you would be losing money, but it would slowly since your long leg will hedge that.
 
mGrunin said:
The long leg in those positions cost less because it is further OTM. With this setup, 100% they are holding a margin against you because this is a credit position. If anything goes horribly wrong and the stock actually rallies up, then you would be losing money, but it would slowly since your long leg will hedge that.
Click to expand...

Thanks for clarifying, good that I didn't open a bigger position on this.
I will keep an eye on it tomorrow.
So they only hold no margin if the long leg is ITM or below the short leg?
I should read the books you suggested before doing bigger trades ;)
 
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