Saturday, April 30, 2011
Friday, April 29, 2011
Trade of the Day: XLF July $14/$15 put front spread
A trader sold 100,000 July $14 puts at $0.06 and bought 50,000 July $15 puts at $0.14 for a debit of 0.02 or $100,000.
Thursday, April 28, 2011
Trade of the Day: Teradyne June $16/$18 call spread 3,000x
The Trade
A trader sold 3,000 June $18 calls at $0.25 and bought 3,000 June $16 calls at $1.10 for a debit of $0.85 or $255,000.
Option Flow Recap April 28th
Macro / Thematic
XLF Financial Select Sector SPDR - ~37,000 of the June 16 / August 15 put spreads traded with the investor collecting $0.025.
Yesterday... Today and Tomorrow (Trader Psychology)
There are two days in every week about which traders should not worry, two days which should be kept free from fear and apprehension.
One of these days is YESTERDAY, with its mistakes and cares, its faults and blunders, its aches and pains. YESTERDAY has passed forever beyond our control.
All the money in the world cannot bring back YESTERDAY. We cannot undo a single act or trade we performed; we cannot erase a single word we said. YESTERDAY is gone.
The other day we should not worry about is TOMORROW with its possible adversities, its burdens, its large promise and poor performance. TOMORROW is also beyond our immediate control.
TOMORROW'S sun will rise, either in splendor or behind a mask of clouds - but it will rise. Until it does, we have no stake in TOMORROW, for it is yet unborn.
Miami International to Introduce 10th U.S. Options Exchange - Bloomberg
The more new options exchanges, the better in my opinion. Bring on the rebates and incentives! The increased competition could force laggards like AMEX and ISE to adopt some maker/taker characteristics.
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Fight of the Century: Keynes vs. Hayek Round Two
“Fight of the Century” is the new economics hip-hop music video by John Papola and Russ Roberts athttp://EconStories.tv.
According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. Yet we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in?
According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. Yet we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in?
In “Fight of the Century”, Keynes and Hayek weigh in on these central questions. Do we need more government spending or less? What’s the evidence that government spending promotes prosperity in troubled times? Can war or natural disasters paradoxically be good for an economy in a slump? Should more spending come from the top down or from the bottom up? What are the ultimate sources of prosperity?
Keynes and Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”.
“Fight of the Century” Lyrics.
Government Attacking Poker Is Idiotic: Learn from Players and Traders
There are a lot of great quotes about how trading and poker are similar in the this clip... here are a few:
"Just cause you lose money doesn't make it a bad bet"
"You have to make decisions quickly and under pressure."
"Focus on process verses outcome."
"Just cause you lose money doesn't make it a bad bet"
"You have to make decisions quickly and under pressure."
"Focus on process verses outcome."
Use Tape Reading to Improve Trading Performance
Tape reading is a very important topic for traders. It's more of an art than a science and experience is key. This is more of a video for beginners as the concepts are very basic but I'm always interested to hear how other traders do it. Ken Calhoun is a momentum guy and he trades stocks so take it for what its worth.
Wednesday, April 27, 2011
The End of the Dollar?
Fascinating global round table on the future of economic competition. Great video from Big Think. Everyone is bearish...So I'll ask the question is it time to start thinking bullish? I'll wait for the market to show me but I'm very focused on the dollar and a possible snap back rally.
Derivatives Firms Face New Capital Rules
Full article here: Derivatives Firms Face New Capital Rules - NYTimes.com:
Highlights:
"The $600 trillion derivatives market, long known for its freewheeling ways, is slowly being tamed."
"The commission on Wednesday also voted to reopen or extend for 30 days the public comment period on its earlier rule proposals. The agency plans to complete most Dodd-Frank rules by the fall."
doesn't sound like they are really addressing the problem...
Highlights:
"The $600 trillion derivatives market, long known for its freewheeling ways, is slowly being tamed."
"In the lead-up to the crisis, investors bought billions of dollars’ worth of credit-default swaps as insurance on risky mortgage-backed securities. When the underlying mortgages soured, the American International Group and other companies that sold the swaps lacked the capital to honor their agreements.
Under the commission’s new plan, those firms would have to put aside enough cash to cover unforeseen calamities. Regulators, until recently, had little authority to set any rules for this risky market."
"The commission on Wednesday also voted to reopen or extend for 30 days the public comment period on its earlier rule proposals. The agency plans to complete most Dodd-Frank rules by the fall."
doesn't sound like they are really addressing the problem...
Option Flow Recap April 27th
Macro / Thematic
KRE SPDR KBW Regional Banking (ETF) - 10,000 of the June 22 puts were bought for $0.09
SPY SPDR S&P 500 ETF - 21,200 of the July 145 calls were bought for $0.31 against a sale of 4800 of the July 125 puts at $1.37
XLF Financial Select Sector SPDR (ETF) - 35,000 of the June / July 16 put spread was bought for $0.14.
Song of the day: Chase and Status ft. Maverick Sabre - Fire In Your Eyes
What do you guys think... could this be the new warm up song for the Golden State Warriors or for your trading day?
Why Water Will Never Be the Next Oil
I read this great article on Freakonomics about why the most abundant, liquid resource on the planet, makes for a very illiquid asset when it comes to markets. You can read the full version here: Freakonomics » Why Water Will Never Be the Next Oil: A Guest Post by Charles Fishman
Tuesday, April 26, 2011
Option Flow Recap April 26th
Macro / Thematic
VIX saw 65% the normal volume with 165K calls and 37K puts traded. The most active VIX options were: June 25C (19K), May 19C (16K), May 18C (13K), July 25C (10K), June 22.5C (9.5K). The top open interest positions are: May 30C (187K), May 25C (179K), Jun 32.5C (156K), June 18P (151K), May 18P (135K). VIX closed down 15 to 15.62.
EEM iShares MSCI Emerging Markets Indx – 17,500 of the January 42 puts were bought for $1.89.
SLV iShares Silver Trust (ETF) – 10,000 of the May 37 / 35 1x2 put ratio spread traded at $0.03.
TLT iShares Barclays 20+ Yr Treas.Bond (ETF) - TLT May $94/$97 1x2 ratio spread. A trader sold 10,000 May $97 calls at $0.13 and bought 5,000 May $94 calls at $0.68 for a debit of $0.42 or $210,000.
UNG United States Natural Gas Fund, LP - Trader bot over 8K October 14 calls for .42
Trade of the Day: TLT May $94/$97 1x2 ratio spread
A trader sold 10,000 May $97 calls at $0.13 and bought 5,000 May $94 calls at $0.68 for a debit of $0.42 or $210,000.
Inspiration from Sports: Chris Paul
Inspiring stuff.
"You can't go somewhere you haven't been; without doing something you've never done."
Market Analysis for 2011--Jim Jubak's Big Picture
Senior Markets Editor for the Money Show
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
How to Find Trades in the First Hour--Trade the Gap with Scott Andrews
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Goldman Derivative Desk Trading Top Ideas
Goldman Derviative Desktop
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Ira Glass on Storytelling
Interesting to hear Ira talk about the importance of doing a lot of work, even if its not your best work in order to eventually reach your highest potential.
Monday, April 25, 2011
Song of the Day: Strange Talk - Climbing Walls
Dope new band, "Strange Talk is an indie synth-pop Melbourne band that formed in February 2010. The band has been writing an EP over 2010 and plans an official release later in the year. The band's sound has been heavily compared to Phoenix, but also Passion Pit and Cut Copy."
Option Flow Recap April 25th
Macro / Thematic
EEM iShares MSCI Emerging Markets Indx – A total of 66,000 of the May 51 / 53 call spreads were sold today at ~ $0.413. It appears to be closing transactions for the second day in a row. (Always pay attention to profit taking)
Follow Up: BAC - Right Now (Bank of America Inc.)
Wanted to take a quick second to do something we don't usually do, which is review a previous post and connect some dots. Today BAC made the move many were anticipating - a break above the declining tops line and a run towards the gap. I'm disappointed to say that despite having stalked this trade, I did not cash in nearly as much as I would have liked. The move off the open was sharp and quick and I would have preferred to buy the early pull back. One axiom we hear a lot is the market moves in the direction that hurts the most people. Quicker moves like this can often be indicative of shorts getting squeezed. The rapid buying and the lack of sellers causes a bit of a panic and that looks like what might have happened today.
Here's a look at how it went down.
I'm not sure BAC is done basing, but it will be very telling of short interest if it gets squeezed into the gap tomorrow. If it does get into the gap, I will most likely be looking to fade the gap fill for a quick trade. Good luck, and remember to stay light and tight.
Here's a look at how it went down.
I'm not sure BAC is done basing, but it will be very telling of short interest if it gets squeezed into the gap tomorrow. If it does get into the gap, I will most likely be looking to fade the gap fill for a quick trade. Good luck, and remember to stay light and tight.
Trade of the Day: NetApp January 2013 $55/$45 bull risk reversal
A trader sold 5,500 January 2013 $45 puts at $5.74 and bought 5,500 January 2013 $55 calls at $8.09 for a debit of $2.35 or $1,292,500.
Freeport-McMorRan Copper & Gold
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
A Look Inside the UA E39 - Bio Metric Data
This is dope! I wish they had something like this specifically for trading.
Sunday, April 24, 2011
Song of the Day: Waka Flocka - Hard In Da Paint (Bellizio Remix - Crizzly Edit)
I go hard in the mother F#####'n paint.
Its the Blake Griffen theme song... play this on mute while you listen to the above
Saturday, April 23, 2011
Can a complete novice become a golf pro with 10,000 hours of practice?
Great article about testing the 10,000-hour theory put forth by Malcolm Gladwell's best selling book Outliers. You read the full article here: Can a complete novice become a golf pro with 10,000 hours of practice? - St. Petersburg Times
Here are some of the highlights I took away from it:
Here are some of the highlights I took away from it:
Thursday, April 21, 2011
How Banks Spin Their Earnings - NYTimes.com
I hope none of our readers plan trades around headlines from earnings announcements. This is another example of how fundamental data from companies can be manipulated and should never be the basis for a trade. Based on how volatile the first 15 mins of trading was in $C on Monday, I would say more than a few people were confused by the news. Plan your trade and trade your plan!
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
How Citigroup uses social media in its quarterly reporting | IR Web Report
very interesting article. I didn't know that C had a twitter account, but as the author points out the tweets came a little late so perhaps there wasn't time value to following. Nevertheless, its thought provoking to think about how social media will transform the financial services industry. How about your thoughts?
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
BAC - Right Now
Here's what I am watching
Baby break of today's opening range (bullish bias but not overwhelming)
Gap up above that could draw price higher
Declining tops line resistance
Divergence in price and MACD over 3 days that makes me wonder if a near term bottom is forming.
Good luck!
Baby break of today's opening range (bullish bias but not overwhelming)
Gap up above that could draw price higher
Declining tops line resistance
Divergence in price and MACD over 3 days that makes me wonder if a near term bottom is forming.
Good luck!
Wednesday, April 20, 2011
Song of the Day: Led Zeppelin Vs. Gramatik - Stairway To Hip-Hop Heaven
Good music to research options to... enjoy
WOW Report
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Option Flow Recap April 20
Macro / Thematic
TLT iShares Barclays 20+ Yr Treas.Bond – 50,000 of the June 101 calls were sold at $0.14 and the September 98 / 101 call spread was bought for $0.46, also 50,000x. The September call spread was bought to open and the June calls appeared to be a closing transaction.
Consumer
LVS Las Vegas Sands Corp. – 10,000 of the May 40 puts were bought for $0.45. The puts were bought to open.
DISH DISH Network Corp – 10,000 of the May 24 calls were sold at $1.15. The calls were sold to open.
SVU SUPERVALU INC. – 3000 of the October 13 calls were bought for $0.55. The calls were bought to open.
Energy
WMB Williams Companies, Inc. – 35,000 of the May 17 / January 22.5 call spread was sold at $5.05. The May calls were sold to close and the January 22.5 calls were bought to open.
ENER Energy Conversion Devices, Inc. – 22,000 of the September 1.5 puts were bought for $0.35. The puts were bought to open.
Industrials / Materials
TYC Tyco International Ltd. – 11,000 of the May 47 / 52.5 risk reversals traded at $0.30. The May 52.5 calls were bought for $0.54 and the May 47 puts were sold aat $0.85 to open versus 48.86 stock
VALE – 12,000 of the January 35 / 45 1x2 call ratio spread was bought for $1.86 12,000 x 24,000. It appears to be an opening position tied to 300,000 shares.
ABX Barrick Gold Corporation – 5000 of the May 55 puts were bought for $1.67 versus $55.23 stock. The puts were bought to open.
Tech
BMC BMC Software, Inc. – 5000 of the May 52.5 calls were bought for $0.575. The calls were bought to open.
VZ Verizon Communications Inc. – 10,000 of the January 32 / 42 bullish risk reversal traded for $0.33. The trade appears to be opening and tied to 492,000 shares at $37.89.
Financials
PRU Prudential Financial, Inc. – 4500 of the January 65 / 72.5 / 80 call fly was bought for $1.30
WFC Wells Fargo & Company – 9000 of the January 20 / 30 put spreads were sold and 9000 of the January 35 calls were bought, with the investor collecting $2.40 on the package.
Healthcare
ARIA Ariad Pharmaceuticals, Inc – 10,000 of the May 3 / November 5 put spread was bought for $0.25. The trade appears to be a roll from May to November up and out.
CYH Community Health Systems – 7500 of the May 24 / 28 bearish risk reversal was bought for $4.15. The trade appears to be opening and tied to 750,000 shares at $31.60
*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, and all of the options desks and traders we work with to provide the option flow!
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
A Quick Look at the Charts : BAC (Bank of America) & C (Citigroup Inc.)
Experimenting with posting a few 60 min charts here. Let us know how you do/do not like it...
A quick look at the charts - Bank Of America and Citigroup Inc.
Trade of the Day: Alcoa June $18/$16 bull risk reversal 7,500x
A trader sold 7,500 June $16 puts at $0.42 and bought 7,500 June $18 calls at $0.26 for a credit of $0.16 or $120,000.
Risk/Reward
As you can see from the graph above, the spread has unlimited risk to zero and unlimited profit potential. Since the spread is done for a credit, the underlying must be below $15.84 for the spread to start losing money. Alcoa closed today at $16.64. The trader is bullish in Alcoa, and decided on the risk reversal because selling the puts more than financed the purchase of the calls.
The line shown above is the break even price. Looking at the daily stock chart, you can see that the underlying bounced right off the break even price level on Monday. Therefore, the trader executed this trade betting that Alcoa will not break the $15.84 support level.
Alcoa traded 79,218 contracts today compared to average daily volume of 64,104. The 52-week range is a low of $9.81 and a high of $18.47.
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Tuesday, April 19, 2011
Song of the Day - The Hours - Ali In The Jungle [Dead Errant Soul Remix]
One of my favorite songs of all time... just found this remix and can't stop playing it...
Eighteenth Century Trend Following and More History
Great post on the origins of a trading mantra. You can read the full article here: Eighteenth Century Trend Following and More History | Au.Tra.Sy blog - Automated trading System
"Proverbs travel through generations and their origins get lost, so I was quite interested when I found out about an 1838 book, The Great Metropolis, Vol II by James Grant, tracing back the saying to eighteenth century British economist and trader David Ricardo (I actually thought that this legendary trading maxim was introduced by Jesse Livermore in Reminiscences of a Stock Operator)."
“Cut short your losses,” – Let your profits run on”
"Proverbs travel through generations and their origins get lost, so I was quite interested when I found out about an 1838 book, The Great Metropolis, Vol II by James Grant, tracing back the saying to eighteenth century British economist and trader David Ricardo (I actually thought that this legendary trading maxim was introduced by Jesse Livermore in Reminiscences of a Stock Operator)."
“Cut short your losses,” – Let your profits run on”
Most Marketers Plan to Increase Social Media Spend This Year
Not many people know this but I graduated with a Marketing degree. Long story how I got into finance.... but here was some interesting stats I found about advertisting... LEAPS on twitter and Facebook if they were only public would be fun...
read the full article here: Most Marketers Plan to Increase Social Media Spend This Year [STUDY]
read the full article here: Most Marketers Plan to Increase Social Media Spend This Year [STUDY]
Option Flow Recap April 19th
Macro / Thematic
KBE SPDR KBW Bank - 40,000 December 30 calls sold at 62.5 cents to buy 50,000 June 26 calls at 50 cents. The spread is tied to 1.4 million shares at $25.10. Pro trade! Long upside gamma but hard to tell if they shorted stock or just did a stock replacement.
How to Overcome Burnout When You're a Superachiever
How to Overcome Burnout When You're a Superachiever: "How to Overcome Burnout When You’re a Super-achiever"
here are the highlights:
Take breaks between big projects. Burnout puts your mind and body in a weakened state, so avoid jumping from one stressful, time-consuming project to the next in order to give your mind and body a chance to recover.
Socialize outside your professional group. This can provide fresh perspectives, stimulate new ideas, and help you discover previously undiscovered resources.
Reinforce effort, not outcome. Not even the best players hit home runs every time they get up to bat. Remember to reinforce yourself for trying rather than only for the end result.
At the end of the day is all about BALANCE. I'm personally working on this right now... and I imagine it will be something that can always be improved.
here are the highlights:
At the end of the day is all about BALANCE. I'm personally working on this right now... and I imagine it will be something that can always be improved.
Trade of the Day: Walt Disney bearish put vertical
The Trade
A trader sold 4,000 May $37 puts at $0.16 and bought 4,000 May $40 puts at $0.63 for a debit of $0.47 or $188,000.
8 Health Benefits of Walking in the Morning
I run or walk to work everyday. Its interesting to see the benefits. For the full article click here: 8 Health Benefits of Walking in the Morning
- Better Blood Circulation
- Muscle Strength and Stamina
- Blood Sugar Control
- Improved Skin
- Better Sleep
- Improved Metabolism
- Better Mental Health
- Vitamin D Absorption
Twitter Will Kill TweetDeck | Lance Ulanoff | PCMag.com
Are you a trader using tweetdeck like us? I really hope they don't kill it!
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Hoops 2.0: Inside the NBA’s Data-Driven Revolution | Playbook
The reason I wanted to share this article is because I think it is representative of how other performance based professions are advancing and adapting using technology to achieve success in a more competitive environment. There is lots of technology available to traders right now that wasn't available a year ago. But there are also technologies that have not yet been developed that could change how we trade. We are thinking about these technologies at SeaofOpportunity. Share with us your thoughts!
No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.
Monday, April 18, 2011
Option Flow Recap April 18
Macro / Thematic
UUP PowerShares DB US Dollar Index Bullish - 10,000 of the May 22 calls were bought for $0.15.
EEM iShares MSCI Emerging Markets Indx - 6800 of the May 47 puts were bought for $0.99.
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