Option trading notes – part 1

Some observations about trading near-expiration options on the ES We are looking to buy options  — Calls, if we think the next substantial move is up, Puts, if we think the next substantial move is down — at a cheap price and sell them back later at a higher price. The business model is “buy low, sell high.” The options are simply trading vehicles we are using to capture changes in the price of the underlying security — in this case the S&P500 e-mini futures, symbol ES — in ways … Continue reading

Summary – week of Feb. 14, 2022

Summary – week of Feb. 14, 2022 This is the excerpt that will be repeated in the sidebar. We used to call this the deck Let’s begin at the end and look backward. ESH22 week of Feb. 14, 2022 For the Monday and Wednesday expirations, there were nice moves — first down Sunday night, then up on Tuesday night — that were good opportunities to grab cheap options with a chance of making money on the inevitable bounce or retracement. It illustrates one of the problems with trading the short-dated … Continue reading

Feb. 10, 2022 Option Trading

A very profitable day – and a new trick Thursday (Feb. 10/22) was potentially a wildly profitable day for Nat’s option traders. Here’s what the daily chart looked like.(Click image to enlarge). The market had been waiting for the inflation numbers, released this morning at 8:30 a.m. EST. Overnight the price moved sideways in a narrow range, waiting for the number in the belief it would determine the Fed’s next move on interest rates. The day before Nat left instructions on what to look for in the morning. Right now … Continue reading

Options trade summary – Feb. 3, 2022

Wednesday’s trading: a sudden save late in the afternoon turned the market around An interesting day, with a slow push down starting overnight and continuing until late in the afternoon, when Amazon announced Q4 earnings and saved the market. The option trades posted after the previous day’s close focused on the 4475 and 4500 Puts expiring Friday, and called for subscribers to watch for a bounce overnight that stayed under the 4565-75 level. (The Tuesday close was 4577.25). The idea was to watch for a bounce that would drive the … Continue reading

Option trading summary – week of Jan. 18, 2022

Thursday Jan. 21, 2022 Please read the Disclaimer here. From the trading room Weds. evening: Overnight overnight trading, 4505 line is a key. if holding up, looking for 4575, 4550 call if fails to hold, looking for 4520 call instead. Naturus, 8:48 AM 4550 call are at the money goes up 6.25 pts 4575 call goes up 3pts Naturus, 9:30 AM 4550 call take profit. as soon as ES goes above 4550 level, calls buyers selling. jaf, 9:43 AM outstanding long call , Great !! Naturus, 9:43 AM just luck. … Continue reading