All of the below trades were taken from opportunities that I gleaned from the option scanner.
In total I made $169 in profits using around $1,000 in risk capital. So, a 16% return on risk capital in a month.
I took positions in 12 stocks for 14 trades in total, as I made two adjustment trades in MRO and ETE.
The charts of all are below - take a look and let me know if any questions.
|EMC Long Put||13-Apr-16||37||-160|
|ETE Long Call||19-Apr-16||31||168|
|MRO Long Call||19-Apr-16||31||-75|
|KEY Long Call||20-Apr-16||30||6|
|MS Long Put||20-Apr-16||30||-100|
|VALE Long Put||21-Apr-16||29||360|
|JNPR Long Put||21-Apr-16||29||-62|
|KMI Long Call||28-Apr-16||22||-100|
|IPHI Long Call||29-Apr-16||21||-55|
|NG Long Call||29-Apr-16||21||-80|
|MRO Short Call||29-Apr-16||21||55|
|CTL Long Put||2-May-16||18||212|
|HIMX Long Call||9-May-16||4||-55|
|ETE Short Call||10-May-16||10||55|
Volume scans for the 12th April had EMC at the top of the put list showing the $25 May 20 puts trading 64,162 contracts over 2,445 in open interest. A quick review of the other options shows this amount to be significant compared to overall trading volumes.
Earnings for EMC are out April 20th.
I bought 2 $25 puts at 0.80 - net debit of $160.
EMC released earnings before Wednesday's market open. The results were less than the market expected - but the shares still rallied! The reason behind the rally is a pending acquisition by Dell, which is still on the cards.
...but shares haven't relinquished any ground in Wednesday's trading session, as investors continue to focus on the storage company's impending acquisition by Dell
It's disappointing when that happens; you take the right position, the news is favorable to your position yet the market still goes against you. I think the $25 level is now unlikely to be reached in time for the May expiration so I will look to exit this trade on the open of Thursday's session
Market opened well and I placed an order outside market to sell a higher call strike; the $15.50 calls @ 0.55. I was filled during the day at some point, so my long call is now a call spread.
My initial order to buy the calls was at a price of 1.00. However, the pre-open market showed ETE edging higher on some news that their lawyers wouldn't have enough time to prepare the paperwork necessary to complete their merger with Williams. I was getting nervous about missing out on what could be a good trade so I upped my order price to 1.10 and was filled on the open. I should have kept it at 1.00 as I set the opening price and the option ended up trading down to 0.85 before finishing with a last price of $1.25.
Adjustment 10th May
I sold the $13 call option @ 0.55.
BAC was a tricky one as there has been heavy volume all round for the stock. On the 19th April, the $15.50 May20 strike traded 16,068 over 1,031. However, when looking at the open interest there are a few strikes with decent volumes and OI. But the $15 strike has 233,878 in open interest, so I placed an order for 5 contracts of that strike. I bit of a punt really...the volumes aren't that convincing, but I'll see how it goes.
The other thing I like is that implied vol is fairly low at 25.8%
Update: I wasn't filled on my buy order for BAC. The stock rallied from the open. My order was to buy the calls at 0.22, which was the offer price for the previous day. However, the $15 calls opened on the 20th at 0.25, traded down to 0.24 and closed 0.39!
The $24 May20 strike traded 6,364 over 3,494. Volumes aren't all that convincing here either as there is a fair amount of volume around on other strikes. But this strike was a standout for today's scans. I will keep an eye on it over the next couple of days and if the strike dilutes compared to other strikes I might look to exit depending on the P&L.
I also like the implied volatility with this one, like BAC, is fairly low at 26.6%, which is good for buying options.
And being long another financial in BAC I don't mind taking a short in MS...feels like a bit of a hedge if the entire market goes one way or the other in a massive move.
I'm liking the look of KEY. The scans for the 19th showed the $12 May20 call trade 6,028 over 4,588 contracts in open interest.
But, take a look at the other strikes. Pretty much all the option interest for the May expiration is in the 11 and 12 call options with heavy volume trading in both during the day on Tuesday.
VALE. Buy 3 $5.50 Puts @ 0.30. 4,721 / 1,043. Earnings out May 5. Stock has been in down-trend from Jan 2015 until Feb 2015 where it has made a rebound from its' lows of 2.14 to reach 10 month high of 6.26.
JNPR. Buy $23 Put @ 0.87. 2,173 / 569. Volume is significant compared to sourounding strikes. Vol has jumped though to 37% so that is a concern.Stock is volatile but I'd say it is in a downtrend. Earnings out April 28th.
KMI May 20 $18.50 calls traded 10,416 over 3,064 in open interest. No earnings due. Implied volatility at 34.4% and on the relative low side.
Trading sideways since the start of the year, however, significant downtrend the prior 6 months.
Concerned about the direction and time to expiry. Low vol though. 0.50 for a close to ATM option with 3 weeks to go, doesn't seem so bad.
Placed an order for 2 lots.
I made a FaceBook post about this one, which has left me red faced.
I announced suspicious option volumes going through the $35 call options prior to IPHI's earnings announcement after the market close. I made a call that IPHI would most likely bounce higher after their positive earnings release, which was also after enormous trading in the $35 and $40 call options. 241 times the puts.
I stayed up for the market open and bought the $35 calls.
The stock did NOT make the rally I expected. The call price was 0.55 and has since dropped to 0.20 during the day on Friday.
Took another trade off the Option Scanner.
Option Scanner trade. High put volume over open interest. Volatility is 38.4%, but looks to be rising. However, earnings are out May 4th and I would like another put position to help balance out my book, which has primarily call options.
Update After Earnings, May 5th.
Centuy Link posted Q1 2016 earnings results after market May 4th. The numbers were dissapointing and the stock has since dropped about 10% since buying the puts.
Shares of CenturyLink are falling 8.85% to $28.23 on heavy trading volume late Thursday afternoon after the Monroe, LA-based company posted disappointing revenue for the 2016 first quarter and provided a downbeat earnings forecast.
Option Scanner trade. $10 May 13 Call options trade 10,492 over 540 in open interest. Implied volatility is pretty high at 66.3% but the company is releasing earnings on Thursday morning, so I'll just add this to my small portfolio of option scanner trades.
After initially rallying and making small gains I was expecting HIMX to be another strong result for an earnings pick. However, after earnings the stock tanked. The reports from the company weren't that bad actually but they missed expectations so there has been a sell off as a result. The calls expired worthless so I lose the entire premium of $55.