In my down time ( I only have one trade on right now ) I was looking at different option prop firms.

VTrader

jc trading group

Simplex

EchoTrade

DRO|WST

cassandratrading

Archelon

I don’t post because things are going well. Strange as that may seem.

My trading system is fairly automated now and I am only taking trades generated from my system. That makes blog posting rather dull.

My system said buy WMT at …. Who wants to read that ?

Until my system can also write comments, I don’t think I will be blogging about my system trades. It takes a lot of emotion out of trading which is a good thing.

I run my system, it spits out trades, and stop losses, and I place the orders. The AAPL vertical was my last non system trade. Now they are all system trades.

I am starting to trade more in the public view. I think I will move more to just blogging about options in general, and leave my stock/option picks to another website that shall remain nameless for now.

I am trading SUNW June 5 Calls right now. Their prices have been over the place more than I expected. On the 26th something funny happened. Volume was up a lot. In the morning , SUNW traded more than 50,000 calls, mainly in a single trade. On the tape was a single print of 37,893 at $.16 from the ISE. It was reported that this may be a closing trade of calls bought on May 19th for $.58. If so, someone took a bath in SUNW calls. And , I am just thinking, what marketmaker is doing that kind of size? Had that market maker been buying calls to balance her position since May? Moving paper is moving paper after all.

The thing that three days later, SUN is at 5.30 and those calls are in the money. A difference of $454,716 at the last price. But since you have already lost $1,591,506, it would not be a good day anyway.

In the true spirit of disclosure, I got whacked on SUNW Calls also, but I will be ok. It actually moved my position to a better point looking at the greeks. Non greeks, not so much.

I was Googling , and I came across this description of a bear call spread.    Bear Call Spread. I quote , bear call spreads are “nice low risk, low reward strategies”. Yes, until IV spikes, then the calls you sold as part of the spread rise.

I don’t disagree with the article. I agree with it except……they leave out any discussion of what happens when IV drops.

Sure, IV may not be a ‘intro’ options trading subject, but understanding IV is essential to understanding spreads. When you leave out even a mention of how the greeks affect a spread, you are doing traders starting out a disservice.

How many of us have gotten caught by guessing right on a stock direction, but getting IV wrong and losing money ?

Ahh the AAPL iPhone release. I , without a dougt think it will be a great product. That being said, on to tradng. I am looking at the chart and I see a top. The news and the date have been in the news sooo much, I can only think that that information has already been priced into the stock.

We look at the IV, and it is spiking. I have been watching the IV for a while, and AAPL usually does not hold and IV over 45% for very long except for earnings.

SO here is my take, after the announcemet a drop in IV and a slight decline in the price. “Buy the rumor, Sell the fact”, has worked well for me with AAPL. I am looking at the 140/145 Call spread. The 135/140 is an option, but with a lower IV. Since we expect a drop, the 140/145 is a better option.

[Update : AAPL went down from the start of the session. I could not make the trade, at my parameters, so I didn’t make the trade. Never rush a trade.]