Skf calls

Discussion in 'Stock picks and trading strategies' started by XOM, Dec 10, 2008.

  1. XOM

    XOM Member

    Just looking for discussion on the DEC calls while SKF is hanging around the yearly lows and support at about $100. I know the spread is a bit ridiculous but the volatility is beautiful for quick trades in this market and this etf can move very quickly as we saw on the last round of index lows that were put in, upside potential (assuming a market bear bias for the foreseeable future) looks to be about 3:1. Still, I think daytrading it would be most prudent.

    Anyway, thought I'd solicit opinions from the options experts here.
     
  2. pedrom727

    pedrom727 Member

    I just hate trading SKF because of the basis risk, I remember when UYG was around $25 after the Fannie/Freddie bailout SKF was sitting right at $100. Fast forward to now and you have UYG trading at $6.30 and SKF at $100 still, without a doubt good for a quick trade but I prefer to trade in something that has a closer correlation to the movement of the underlying sector/stocks it covers.
     
  3. XOM

    XOM Member

    Agreed on longer term, though I'm strictly looking to capitalize on the quick intraday moves, especially when the vix is cranked up at 60+

    Are you trading some other options that seem less risky? Do share if you feel inclined.
     
  4. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator

    I'm really SKF right now, even though I don't play options as much.

    Looking like a solid bounce is coming off of the bottom!
     
  5. XOM

    XOM Member

    Exactly, from 100 to 300 to 100 and if you believe the bottom is not in the market...hell even a quick run to 150 would be a hell of a profit on the options.
     
  6. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator

  7. XOM

    XOM Member

    I wouldn't be looking for 300 either but I wouldn't rule it out at some point.

    Which strike and entry point are you looking at? I keep being too damn cheap, could have netted 15-20% 2 or 3 times since yesterday, just not bidding quite enough.
     
  8. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator

    DEC 130 calls look pretty appealing
     
  9. XOM

    XOM Member

    The problem I see with the out of the money calls is that they don't yield as much profit on the same move in the underlying, for example; currently the 110s are up 9%, the 120s are down 1% and the 130s are down 1.5%
     
  10. XOM

    XOM Member

    XLF DEC 13 puts look interesting, good volume and a tight spread.
     
  11. XOM

    XOM Member

    Bought .SKFLU @ 6.50 Looking for an market sell off into the close.

    Edit: that's the DEC 130 Call, decided I liked it better after watching it for a while.
     
  12. XOM

    XOM Member

    Ouch, not the best start to a trade, let's see what Thursday and Friday bring.
     
  13. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator

    I added to my FAZ at 40.07 right at the closing bell and holding overnight, DOW will most likely have a hard time with 8800 tomorrow.
     
  14. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator

    Those DEC 130 calls are looking real good now!
     
  15. XOM

    XOM Member

    Yeah but my entry sucked so I missed the bulk of it; sold at 7.60 for a 17% gain. Looking for pullbacks to re enter :biggrin:

    Edit: I'm thinking that any attempts to break through 900 on the spooz are buying levels for SKF (options or the underlying)
     
    Last edited: Dec 11, 2008
  16. XOM

    XOM Member

    Looking for $5 on the 130s or 7.9 on the 120s. Just need a few more points on the spooz.
     
  17. XOM

    XOM Member

    Back in the DEC 130 @ 5.7
     
  18. XOM

    XOM Member

    Out at $6.8 for 19.5%, good enough for me.
     
  19. XOM

    XOM Member

    I won't lie, it hurts to have missed that run to 12 on these calls, but in the big picture sticking to my plan yields the best results in the long term.
     
  20. XOM

    XOM Member

    Back in the DEC 130 calls @ 9, looking for a market sell off in the last half hour.
     

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