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Hey guys,
Nailed that NAZ decline...huh?
Unfortunately, could not even brake even on the putskies due to time decay.
Expecting a short term bounce then the massacre begins.
Happy trading!
No, I do not believe that there is such a requirement.
LY
I agree to some extent. I am not sure about the $1 theory. Time decay is virtually non existant until four weeks before expiration. Then it bulds up steam and robs you blind.
However, I agree that index options seem to be a different beast in that the out of the month options are fairly idle.
Let's observe and see.
Regards
As I am sure that you are aware, the time premium is modelled as an exponential function. However, as far as the MNX is concerned, this does not seem to be the case. It is all a matter of how good one can call the tops or botttoms.
For example, I was ahead by one point on my position but did not take it. Now time is rapidly running out and if we do not sell off soon, I will be out my investment.
I have not modeled this yet, but my gut feelis that it is smart to roll these options with three weeks left to expiration if there is any doubt re: profitabilty of a trade.
More to come...
Hey Bob!
Same is true of the MNX options. More risk, more reward.
Hey guys,
Well we have a difference of opinion here, although this is really a tough call! For the past two days we have had up days on icreasing volume which is usually bullish leading to a double top scenario on the NAZ.
However, we are overbought technically. And let's not forget about those divergences. Bearish divergences are much more accuarate than their bullsih counterparts. However, sometimes they take awhile to play out.
We have a hammer or doji (NDX or NAZ) with falling volatilty as well. I smell a fake out.
My best guess is ~30% retracement within the next few weeks, just enough to scare the nacent bulls, then we should resume the bull run.
If the earnings horizon does not improve and the CEO's choke on the "visibility" word, things could get ugly.
I still don't know why, but gaps get filled it is not if just when.
Happy New Year to all!
Is that BigCharts?
Do they have an annotion feature?
Note the divergences...they are great contrary indicators!
Not foolproof but always leading rather than lagging!
Great exaple and also exhibited on ITWO.
Happy New Year!!
Yep, I am short the MNX.
My projection is 37 on the cubes. Then I go long.
Good luck!
You may very well be right.
Look at the divergences all over your chart.
We may go up Monday as the NAZ has gone up every year since 1971 on 12/31 but I bet that we correct sometime soon.
Time premium is a killer here and I will be forced to take action in the next few days.
Good Luck!
Hey guys,
Bought the MNX when the NDX hit the top of its trendline. It may take until January, but I agree with Bob, the NAz in headed south for a breather.
Options are a lot less forgiving than stocks. But when you are right, there is no feeling like it!
Thanks for your detailed response,
Regards
Bob,
Thanks, I will give it a shot.
Bernards' website is a bit overwhelming to me. Need some guidance there. Left a message for Bernard.
Happy trading!
Bernard,
Could you please point me in the direction of what you are doing with your website. Pardon my ignorance, but it is a bit confusing.
Thanks and see you on the MKTSS thread!
Hey Bernard,
What is the URL of your site?
Anyone know of a way to update an Excel spreadsheet with 30,60 etc. bars?
Not ready to invest big bucks in a canned system. Quite frankly, don't think it is needed.
Notice that even on this low volume day, they couldn't keep the Naz up.
I am hearing alot of bearish talk re: the old stalwarts, namely GE et al. All of the guru's are afraid to talk down the Naz. Amazing.
Personally, I think we can profit from a nice retracement and then be off to the races.
Right now, short the Naz.
Good luck all!
Bob, the test link that you provided craps out when I try and bring up the url. Maybe you could share with us how you post charts?
Later
Had trouble logging on yesterday.
The NDX unfolded as predicted. We are are within 1/100 of the previous resistance and the base of decending triangle.
Tomorrow should be very interesting. Still short.
All those up days on lower volume, amazing! Sometimes the market does talk.
Now I have to hope it does not turn before I actually make some money!
two likely outcomes: Coil within the triangle for another week or blast thru to either side. I am betting down from here.
Good luck all!
It will be interesting...
Let's recap as we head into another trading week:
NDX:
MACD: Negative divergence and climbing
Momentum : Same
Stoch: Same
McClellan: About to turn over from the same point as April
Trin: Negative
Volatility: Turning North
If this thing reverses next week, it will be facinating
Hey Bob!
Well one for our side. This panned out exactly as predicted.
Want to learn more about those index options though.
I think we should not show I bias and discuss both puts and calls.
Take care!
Great Bob, that is my prediction. USPIX is a leverage fund. In this case short. So if NDX moves down 5%, USPIX moves down 10%. Likewise UOPIX is the inverse. Up 5% on the NDX, up 10% on UOPIX.
So in reality we agree!
Don't see it. I see MACD and Stoch and Mom divergences all over the place.
Time is a great educator. We shall see!
Good luck all!
Hey Bob!
This scenario is playing out as expected. It was facinating to watching the market spike and hold after Greenie's comments. Just as I expected they sucked the money in and pulled the plug.
I have been following the markets for years and now it is just beginning to jell in my thick head. Am minor league short on the USPIX now. We'll see.
Still trying to understand these index options. The time premium is phenominal. But hey if you are right the returns are phenominal as well.
I believe that we are in the beginning of a major move up. However, there will be quite a few shakeups along the way.
Those divergences are facinating. People spend too much time optimizing their system and not enough time listening to the market.
I think I will go out and buy a stethoscope if this short yields any profits.
Later
Hello Bob!
Well, to my way of thinking we have reached a short term top. I have found divergences to be very reliable although certainly not infallible!
With a positive wave of news vis-a vis a rate drop we could drive higher in the short term. Right now my predilection is to short this rally if it occurs.
Notice how the spreads have tightened on the index calls. Even those that are out some.
Still learning but my gut says fade the rally and pick up puts on the cheap.
Too bad ASK does not have more MA options, I find the 13 works best for most underlying issues.
Happy trading!
P.S. Where is the help page that explains fonts, pastes, etc?
Took a look and agree.
Friday's action was disappointing. The high volume disturbed me as well as momentum, stochastic and MACD divergences. I am now 100% in cash and waiting.
Probably means the run will continue but I will sit on the sidelines until the market makes up its mind.
Maybe I should write that on a blackboard 500 times, Eh?
Have a great weekend!
Leap
Hey Bob,
As I see it, there are two ways to digest the recent runs up:
1) The most obvious, a retracement
2) An extended trading range
As long as the amplitude of the range is high enough, I do not care.
Don't think that this run is done though. Still have not reached the oversold levels of the previous NDX highs. Time will tell.
Good luck!
And another thing...Stockcharts.com is the only site that has adjusted for Profunds splits. Even ones that occurred over a year ago. Amazing!
Hey Bob,
I guess that volatility has its price!
Anyhow, I have been at this game for awhile. Studied everything from point and figure to Maximum Entropy Spectral Analysis. Bottom line: Moving averages are the simplest and most reliable technical indicator.
Regards
P.S. Any idea why some of your charts post and others appear as a URL?
Hey Bob,
Nice rally, but can sure sympathize with your predicament!
Anyhow, I think that the other contributing factor to the spread is the amount of underlying controlled. For example, the qqq's control 1/40 of the NDX. On average, for equivalent expirations and strikes, the B/A is 1/40 of the NDX.
Just some food for thought.
I have been in the UOPIX fund since the commencement of the April rally, but did not sell. Have been trading my way out ever since. Today should mark the first green day for me.
FWIW, I have started the Automatic Investors thread here. Trying to come with some new twists on an old theme. Not much interest though. I have a gut feel that options can play well into this hand, time will tell.
Good luck!
Bob,
Thaks for your response. However, I was in error. I was actually looking at the NDX options which if you can make any sense of the gibberish below is at ~a 9 point spread. I understand the concept of premium...time + intrinsic value.
I guess the spreads are somehow proportional to the underlying index value.
QQQ's vs. MDX vs NDX.
Really enjoy this thread!
.NDX (Nasdaq) 1600.81 +1.51
Nov 30,2001 @ 15:40 ET (Data at least 15 Minutes Delayed)
Calls Last Sale Net Bid Ask Vol Open Int Puts Last Sale Net Bid Ask Vol Open Int
01 Dec 1575. (NDV LB-E) 68.40 pc 73.10 83.10 0 2076 01 Dec 1575. (NDV XB-E) 63.00 pc 44.70 54.70 0 2007
01 Dec 1575. (NDV LB-A) 0 pc 72.60 82.60 0 2076 01 Dec 1575. (NDV XB-A) 58.00 pc 45.50 53.50 0 2007
01 Dec 1600. (NDV LL-E) 60.50 -7.50 58.80 67.00 69 1321 01 Dec 1600. (NDV XL-E) 67.00 +2.00 55.30 65.30 771 1683
01 Dec 1600. (NDV LL-A) 53.00 +1.00 58.40 66.50 1 1321 01 Dec 1600. (NDV XL-A) 75.00 pc 55.20 65.20 0 1683
01 Dec 1625. (NDV LC-E) 45.00 +5.00 46.30 56.30 2 1223 01 Dec 1625. (NDV XC-E) 85.00 pc 68.40 78.40 0 47
01 Dec 1625. (NDV LC-A) 0 pc 46.80 54.80 0 1223 01 Dec 1625. (NDV XC-A) 0 pc 67.50 77.50 0 47
01 Dec 1650. (NDV LM-E) 39.00 -3.00 38.00 43.00 110 274 01 Dec 1650. (NDV XM-E) 85.00 -30.00 82.50 92.50 2 13
01 Dec 1650. (NDV LM-A) 34.50 pc 37.40 42.40 0 274 01 Dec 1650. (NDV XM-A) 137.00 pc 81.60 91.60 0 13
02 Jan 1575. (NDV AB-E) 0 pc 110.90 120.90 0 0 02 Jan 1575. (NDV MB-E) 103.00 pc 80.50 90.50 0 5
02 Jan 1575. (NDV AB-A) 0 pc 110.60 120.60 0 0 02 Jan 1575. (NDV MB-A) 0 pc 82.70 90.70 0 5
02 Jan 1600. (NDV AL-E) 124.00 pc 97.10 107.10 0 67 02 Jan 1600. (NDV ML-E) 86.00 pc 91.60 101.60 0 296
02 Jan 1600. (NDV AL-A) 128.00 pc 97.70 105.70 0 67 02 Jan 1600. (NDV ML-A) 0 pc 93.80 101.80 0 296
02 Jan 1625. (NDV AC-E) 84.00 -16.00 84.70 92.00 10 8 02 Jan 1625. (NDV MC-E) 108.00 pc 104.10 114.10 0 5
02 Jan 1625. (NDV AC-A) 0 pc 85.30 93.30 0 8 02 Jan 1625. (NDV MC-A) 0 pc 105.30 115.30 0 5
02 Jan 1650. (NDV AM-E) 101.00 pc 73.20 83.20 0 3 02 Jan 1650. (NDV MM-E) 0 pc 117.50 127.50 0 0
02 Jan 1650. (NDV AM-A) 0 pc 73.70 81.70 0 3 02 Jan 1650. (NDV MM-A) 0 pc 118.60 128.60 0 0
I have only dabbled myself but I am apprehensive about trading futures. My trading style requires me to take multiple positions, and I do not like to overleverage my "bets".
Thanks for the reply.
Speaking of the Naz...
Has anyone every traded listed options on the NDX or MDX(MQX series)?
It appears that the premium and spread is so large that it would be impossible to realize a consistant profit.
Any help or explanation would be greatly appreciated. This one has a bunch of us baffled!
Thanks!
Does anyone trade the NDX and MDX options; ie, the MQX series?
I do not understand how one can make money givne the huge spreads. I think that I am missing something!
HELP
As I expected, there does not seem to be much interest in this thread.
I was hoping for a healthy discussion of different ways to cure AIM's ills.
However, talking to the wall gets lonely.