Why did apple mini calls lost so much although price went higher...? - Options on Futures | futures io social day trading
futures io futures trading


Why did apple mini calls lost so much although price went higher...?
Updated: Views / Replies:1,347 / 12
Created: by TraderTed Attachments:1

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 1  
 
Thread Tools Search this Thread
 

Why did apple mini calls lost so much although price went higher...?

  #11 (permalink)
Elite Member
Hamburg + Germany
 
Futures Experience: Intermediate
Platform: Multi Charts, Esignal
Favorite Futures: YM
 
Posts: 17 since Mar 2010
Thanks: 13 given, 14 received


whatnext View Post
Futures options value increases with volitity - not stock options; they decrease like FT said.

@whatnext The stock options value do increases with volatility, but the problem here was, that the volatility was high already because of earnings comming. And the calls were high in price because of the high volatility when I bought them.
So I planed my risk reward on the basis of high level vol without realizing that the imp vol would fall out of bed right after earnings and with it the option price.

I did expect a to win between $35 to $48 with a risk of $34 in about 3 days. And if the volatility had remained unchanged it would have worked, because the stock did exactly, what I expected. I probably would have sold the call on fridays highs a bit before my target.

Reply With Quote
The following user says Thank You to TraderTed for this post:
 
  #12 (permalink)
Elite Member
Calgary, AB
 
Futures Experience: Intermediate
Platform: NT, IB, TOS, MC
Broker/Data: IB, Rithmic
Favorite Futures: CL, ES, GC, ZS, ZB
 
atata's Avatar
 
Posts: 116 since Mar 2010
Thanks: 90 given, 96 received

volatility crush...

TraderTed, you have experienced volatility crush... one popular trading method is to sell vol through earning season /mostly using Iron Condors/ on weekly options. Obviously there is more to it but the basic idea is you have to look for a stock which has approx twice as much vol on the current options on the day before earnings reporting than the monthly or next week options. Volatility after earnings will adjust to "normal" circumstances, ie next week or monthly vol. If you still want to buy options than you have to buy deep in the money especially in a high vol environment such as just before earnings. My understanding Tom Sosnoff /you can check out tastytrade.com his new venture/ who was one of the founder of TOS won't buy any options - if he ever does - with less than 90 delta. Also vol is different for each stock so you always have to make sure you compare apple to apple and not stock to another stock.

If TOS is having such restrictions than I think your better choice might be other than TOS Interactive Brokers - IB if you want to trade US markets or any markets actually, however I am not sure if IB would be the same in Germany as in Canada. IB is probably the best broker for Canadians as per commissions, trading flexibility, etc... If you are living outside of the US than trading can be very different experience. From Canada we don't have access to Traders Workstation in every province, TOS charges a "lot" more for commissions than in the US, OptionsXpress /CharlesSchwab/ just closed Cad operations end of last year. Most of the Canadian brokers. ex.: usual drill is 9.95 + 1.25 per options contracts... IB does not seem to differentiate which country you are coming from rather what are your trading. As far as my understanding goes I pay the same via IB as a US citizen trading ex. goog or aapl options. Also all the goodies are available as per credit/debit spreads, calendars, bflys etc... or any kind of custom monster you can think of.

IB US Commissions

Please note that IB is not as "hand holding" as TOS, their system is not as user friendly as TOS /longer learning curve/ however you cn fire a space shuttle from IB TWS platform... also note IB will terminate any position /I believe it is fully automated on their end/ to ensure that they won't have to assume your risk... learned it on the hard way...

Hope this helps,

atata
p.s.: another site you can check out to speed up your training on options is John Carter's simpleroptions.com

wie geht's?

Reply With Quote
The following user says Thank You to atata for this post:
 
  #13 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,651 since Mar 2010
Thanks: 4,226 given, 25,599 received
Forum Reputation: Legendary



traderwerks View Post
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


This is the implied volume chart for AAPL

This picture shows it all. After the earnings release implied volatility dropped from 43% to 26%, leaving the out-of-the money calls next to worthless.

Reply With Quote
The following 3 users say Thank You to Fat Tails for this post:

Reply



futures io > > > > Why did apple mini calls lost so much although price went higher...?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Price action observations on the Mini Dow mrBean888 Emini Index Futures Trading 2 January 19th, 2013 12:54 PM
RTL: Price higher or lower between two time points? Papa Lazarou Investor/RT 0 December 4th, 2012 05:53 AM
Apple Unwraps iPad Mini Along With a New, Full-Sized iPad 4 Quick Summary News and Current Events 0 October 23rd, 2012 04:50 PM
Obama Calls for Higher Taxes on the Rich in Speech Quick Summary News and Current Events 3 January 25th, 2012 08:16 PM
How the U.S. Lost Apple iPhone Jobs to China Quick Summary News and Current Events 0 January 22nd, 2012 01:30 PM


All times are GMT -4. The time now is 05:09 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-11 in 0.10 seconds with 20 queries on phoenix via your IP 54.226.132.197