Friday, October 12, 2007

OPTION PRICE 101

OCT 15 2007 MONDAY

if we are in a significant pullback
you'll know by tomorrow
zee
I'm buying Puts XLE OIH GDX cause they hit my targets
just like QQQQ = 53.6
and the bank list i posted is sell today and get out tomorrow
and
USB, WFC, report in the morning, and they could be terrible...
in fact a whole lot of banks report this week
vs. tech, i'll pick banks to win, therefore, dow loses...

OCT 14 2007 SUNDAY

SHORT GDX at $50,
$53 is the highest possible for 2007, probably happens in DEC
GLD in the process of climbing 15%, so I guess that helps gold stocks 15%, so that helps GDX 15% = 51.76...

QQQQ, not much help. Short at 54.14 = 7% = Q3 eps growth or 55.6 = 10% Q3 eps growth...
QQQQ ...I see 55.6, I'm buying an extra 50% more put contracts...

COT, GARY SAYS LONG,

LONG
DOLLAR,DJIA $10,NATURAL GAS
http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm


SHORT
VIX,GOLD,SUGAR,COFFEE,SOY,CORN,M-3,MMBTU,GRUDE OIL,HENRY HUB GAS,PALLADIUM,PLATINUM,GASOLINE, HEATING OIL,djia $5,30 day fed fund,10 yr,5 yr tresury
BUT, Short list sure looks HUGE...




PJC, added to short sell watch list..

OCT 13 2007
10-13
IT really is options 101 or high school, cause i'm still trying to learn this stuff...
KSS spent 26 weeks below 200 day...
07/08 eps 3.80/4.48 in aug 3.85/4.53
3.80 eps x..17% ( yahoo growth est.) = 64.5 top price, except that 200 day = 68 so by or before december, KSS takes out $68



I take the call price NOV 55 and add 6.90, cost of the call and that equals 61.90
Then i take 61.90 and subtract KSS stock price = 60.62, and that equals, $1.28 / 1.30...
KSS nov 55 call is selling for a $1.30 premium..
KSS 50 call is 11.20 or 0.60 premium, therefore i conclude,
KSS nov 55 keeps it’s $1.30 premium for the next two weeks
So if KSS takes out 64.5, i make $350
thats KSS stock price goes up $4.00, and I go up 3.50 = delta 75 / 80...yeah...
KSS NOV 55 call is the best one to buy...


Now what does the KSS NOV 60 call do
Well the chart says any $3 move up and i make $80...
or down..lose $120...$150


KSS NOV 65 CALL
Here’s where two years experience,
following out of the money calls, comes in to play
KSS at 52 /53 call was 0.70, so until KSS price can get above $65,
the call is stuck in a price channel
0.70 KSS NOV 65 low (WHEN kss WAS 52 / 54) ,
multiply by 3 = 2.10...

IF KSS price gets to 65, then 65 call gets to
2.10 or possibly 2.40 maybe 2.70
SO as you can see, I’m not very good with NOV 65 call.
I have 3 prices
ALSO, if KSS goes below $59, the 65 call, could head to 0.80/1.00
nov 65 CALL GOES TO 0.20 OR 0.45 IF kss DECIDES TO RETEST 54/56 support..
IF KSS NOV 65 call at 0.25 on NOV 1, that might actually be worth trying, for a potential double up...and if KSS makes it to $64 ish before options expire, i can get 0.90 / 1.15..



OCT 12 2007
SNDK buy now.200 day = 46.7, it should bounce right off it’s 200 day ...
SNDK at 47 now = 2 bottom support
Buy the NOV 40 call
sell when SNDK at 100 day = 51
Normal pullback ahead of OCT 18 earnings, should head higher going into Oct 18th..



VIX play the NOV 16 to 19 calls...they are all delta 30...which is expensive, but hey the word is out, VIX is a real money maker entering at 16.3 / 16.5

NTRI, if you have NOV 30 calls, i’d hold on to at least 1 or 2 contracts, and wait for NTRI to get to It’s 50 day.( it’s possible) ..
= 44 – 46...making the contract worth $900 up to $1400...
i have a 2 month target price of $45 to $51 for NTRI..
07/08 eps 3.08/3.38
x [13% ( year to year growth)] = $39...
x [17 % ( past P/E)] = $51
IIIN took a small hit, but compared to ATI, IIIN did real good....keep holding those NOV 12.5 calls...you'll see, that I'm right , by and by...

HNT...hot hot sector...=XLV = on the buy watch list...

10 comments:

Anonymous said...

what happen to retail today? Any opinion is welcomed.

tb

Anonymous said...

where can I get the listed delta for a give stock option? I was digging for it on cboe.com, but couldn't find it.

Also, do you have access to charting software which charts the options? thanks
tb

z-stock said...

retail did great,just didn't transfer to any individual retail stock
instead the report went directly in to SPY
that happens sometimes
i had NTRI
and was a little disappointed
but the good news is
NTRI, has a past history, of an 11% channel for 6 weeks
so 30.6 up to $33, 6 times in 6 weeks
=
buy / sell NTRI 6 times in 6 weeks, before it breaks out to $39 / 45

z-stock said...

option charts
open an account with
IB brokers
download their workstation
enter in the option
click on the option, ( far left)
or go to beannies and ask for help in the comment section on questions for IB
drag mouse to charts
click on charts
costs 10.99 / month

z-stock said...

TB,
option delta, lots of trial and error

I have to have the option chart
then i have to sort of give it my best guess
give me three companies, you are very familiar with, (something you have won with in the past)
and i'll try to explain the potential move on each strike
make sure the companies are optionable
zee
took me 6 month's to figure it out

YOU like SNDK?
there's a reason i chose NOV 40 call...

Anonymous said...

Z,

I listened to fast money friday, and everyone is buying near the 50's strike, which they said held its premium value today. considering the stock price was down in sndk, that raised the speculation flag. I may grab some for just a few days. But I am very interested in how you come up with an expiration and strike price on SNDK.

For NTRI, I bought the NOV 35c on thursday for $1.20. Why the 35's? Well, thats the expected price I think it will hit by 3rd week in nov, (which I know is only part of the puzzle). I would be interested in why my 35's were a good or bad idea. Also, I picked up the KSS nov 65's for 1.60 (for the same reason as ntri). I am regreting the KSS trade already..

tb

z-stock said...

tb
i don't like your NTRI 35 call, at all.......
sell it and buy the NOV 30 call
NOV 35 has a 60% / 70% chance of expiring worthless
and
SNDK 50 = delta 15 = horrible, fast money people are out of their minds, or they work for someone that's against you...
SNDK 45 = delta 25 = terrible
sell it buy the NOV 40 call
z

Anonymous said...

Z,

How to trade VIX? I have a account in Ameritrade, but i can not find the symbol for VIX.

David

z-stock said...

VIX, DOESN’T HAVE STOCK
ONLY HAS OPTIONS
VIXKQ = VIX NOV 16 CALL
VIXKR = VIX NOV 17 CALL
VIXKS = VIX NOV 18 CALL
VIXKT = VIX NOV 19 CALL

IF YOU HAVE TO BUY STOCK, BUY THE QID, JUST AS GOOD...

z-stock said...

TB
i looked at the price action SNDK 50 call,
i sure was wrong about that...
sorry
and Ntri, NOV 25 is the good one

EMAIL ME !!! anytime