More LEAPSby Adam on May 15th, 2008 at 2:18 pm |
Just to clarify a couple things from earlier as Interleague play is upon us.
LEAPS and/or any option with lots of time left are very much a bet on future option volatility and not a particular bet on stock volatility. Buy them and you do not get much gamma, and thus not a whole lot of ammo to flip stocks. You will often see a directional move in your favor get offset by an unfavorable move in option volatility.
Consider long LEAP positions the last couple month’s. Unless you had a pure directional bet on AND did not hedge much with stock, you did OK. But otherwise, the absolute pounding in volatility made it a very challenging trade.
Shorter term options are pretty much the opposite. Yes the volatility of the option can and does fluctuate and will cause your marks to bounce around. But for the most part, your bet is on the volatility of the actual stock, and how you manage it.
So if you are of a mind to buy options, think about the “bet” (or hedge) you want to make.
These options also got hosed in regards to the slashing of rates over the last several months, if anyone cares.
Got Rho?
May 15th, 2008 at 2:41 pmAdam,
have you noticed any unsual call activity on tso?
thanks
May 15th, 2008 at 2:49 pmyeah, between volatility and interest rates you can feel the air as we speak.
on TSO, I’m looking now, and don’t see anyuthing exceptional. Most interesting trade i guess is 2500 Jan10 calls on the 40 line with only 744 open interest going in. It’s probably just rolling a buy write or something.
May 15th, 2008 at 3:43 pmLEAPs can make sense in the right environment and at the right time, for those who fancy that kind of a trade. I’m sticking to my ST options, which are more the ’stock-plays’ as you said.
Although, I wouldn’t mind buying LEAPs on her. Obviously, I’d ‘exercise’ all of them in a timely and immediate fashion.
May 15th, 2008 at 4:01 pmGCI had sick volume in the calls today.
May 15th, 2008 at 4:04 pmlooks like someone rolling May 30 calls, it’s almost exactly the open interest. I guess newspapers in play also for bottom fishing deals.
Indeed on the Alyssa LEAPS. Wondering how sales of her clothing line are going? Not sure i’ve ever actually seen a fan wearing them, and I imagine that would stand out, lmao.
May 15th, 2008 at 4:10 pmIs that Alyssa Milano, late of “Who’s the Boss?”
I dig the whorish turn she took later in “Charmed.”
Very “JoeyBagoBensonhurst.”
May 15th, 2008 at 5:19 pmyou think “Charmed” is whorish, you should check out “Embrace of the Vampire”. It made all my boyhood dreams come true.
Also, you gotta love that throw back to Who’s the Boss, with the Mets symbol on her clothes.
May 15th, 2008 at 5:44 pmHell yeah. She showcased the full extent of her ‘talents’ in the vampire movie.
May 15th, 2008 at 5:48 pmJust reading up on her in wikipedia. Big tatoo fan also. 8 on herself.
Movie sounds good, gotta rent it.
May 16th, 2008 at 7:47 am