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Trading Block: A mild day on the street. Apple finally passes $100. What will Yellen say tomorrow and how will it affect the market? New study show advisors use of options increased 13% since 2011.
Odd Block: Calls trade in Jarden Corp. (JAH) calls trade in China Finance Online Co. (JRJC), and calls trade in Macerich Co. (MAC).
Xpress Block: Free pizza day at every Schwab/OX site today in celebration of the importing of the 3- and 4-leg trade ticket from OX to Schwab which is coming in Sept.
Strategy Block: A strategy of patience. Waiting for the right time to make a move in Apple and gold.
Mail Block: Goldman Fly
Question from Pat – Love the show, it’s really great and even though I’m clueless (as is shown by the following). Here’s one that might be good for your “could’ve done the trade better” segment in Options Block. The following is the list of trades that I have made around Goldman. Sorry I don’t have the volatilities or any other data from the trades but hopefully you’ll be able to explain the error of my ways without them. Once I made the initial trade and GS didn’t rebound quickly, I was trying to offset the cost of keeping the calls since I expected that Oct was plenty of time to get back to the 175 area.
3/27 – buy 2 10/18 170-180 call spreads for $3 debit (6.42/3.42)
4/25 – closed 180 call for $1.75
4/28 – closed 180 call for $1.50
5/1 – sold 175 call for 2.75
5/5 – closed 175 call for 1.60
6/6 – sold 175 call for 2.40 (the first one worked but I think they were both actually mistakes)
7/28 – closed 175 call for 5.37 debit, closed 170 call for 8.53 credit, sold 2 180 calls for 3.16 (each), bought 185 call for 1.65
(Resulting position is 170-180-185 fly) (Now it seems really inefficient)
8/7 – closed both 180 calls for 1.88 (each), 185 call for 0.96
Order currently in to sell 2 180s and a 185 for a 3.50 credit
I have the order in to recreate the fly to reduce the cost of the 170 since I don’t think GS will get above 180. Besides discussing what I’ve done and any suggestions you have, what would be a better way to implement my current view of GS given that I own the 170 call? Thanks for all the help already and the future I’m sure I’ll get.