CCU 30 puts feb

[MrSer]

The volume on puts are huge! Just look at them! Their earnings are a day before options expire and i think this is a good call. I like to go where volume goes its almost always a sure shot. Even if you don't decide to purchase puts just keep an eye out for CCU.


Size Symbol Month Strike Type Time
30000 CCU FEB 30.0 P 12:46

Someone obviously knows something we don't. I think if someone brought 30,000 puts this is almost a sure shot.


Also Mu july 9 calls are looking attractive.

Size Symbol Month Strike Type Time
12520 MU JUL 9.0 C 14:36

[MrSer]

And also

NIHD march 45 and 50 calls look very tempting and also have high volume.

[wallstreetsedge]

if youre thinking about playing these just becausebig trades went off, thats not avery good reason to go. normally when options out the money like that are being BOUGHT, it's simply because theyre cheap and the buyer is most likely gambling on the implied volatility going to statistical volatility

imo i dont think thats a smart way to play options, others might like it but i dont

as for the open interest and big orders, if you calculate, the orders arent that big... again the implied volatility on those are very low which is why they most likely chose to go with them. normally people expect big moves if you see ig orders going in - deep in the money 2-3 months out. most likely those out the money orders coudl also be naked sells. you see a lot of those within a couple of weeks before expiration as pure premium plays

going spot month or 1 month isnt too big of an indicator . what will normally give it away if someone knows something is if you see big orders goig in that are 3+ monts out and in the money by 3-6 strikes

[netwrangler]

Originally Posted by wallstreetsedge

if youre thinking about playing these just becausebig trades went off, thats not avery good reason to go. normally when options out the money like that are being BOUGHT, it's simply because theyre cheap and the buyer is most likely gambling on the implied volatility going to statistical volatility

imo i dont think thats a smart way to play options, others might like it but i dont

as for the open interest and big orders, if you calculate, the orders arent that big... again the implied volatility on those are very low which is why they most likely chose to go with them. normally people expect big moves if you see ig orders going in - deep in the money 2-3 months out. most likely those out the money orders coudl also be naked sells. you see a lot of those within a couple of weeks before expiration as pure premium plays

going spot month or 1 month isnt too big of an indicator . what will normally give it away if someone knows something is if you see big orders goig in that are 3+ monts out and in the money by 3-6 strikes

WSE, you're on a roll!

Nice explanation of how the interaction between implied volatility and statistical volatility can impact option volume.

[MrSer]

ccu down mu and nihd up making some money already

[Florida]

I don't get as excited about big volume in puts preceeding a scheduled catalyst such as earnings as I do if it big volume in calls.

Puts can be used to hedge someones position in the stock itself, insuring that if it drops big at earnings, they can get back some of their losses on the stock with the profits from the put options.

NIHD is a little more interesting, and was discussed on Fast Money yesterday. It appears as though someone put on a spread, buying the $45's and selling the $50's, looking for a move that would put the stock close to $50 giving them a $4 profit on their $1 investment.

IMHO

[wallstreetsedge]

haha thanks net

Originally Posted by MrSer

ccu down mu and nihd up making some money already

oh really? how much? at break even?

its really not worth it to be buying options on cheap stock unless youre going to trade it back and forth for nickels and dimes which is extremely exhausting and time consuming.

i'm a big options trader and think about this... on stocks as cheap as the ones your mentioning... there's obviously a spread between the bid and ask.. normally 5¢ (if you're lucky) up to 15¢... 15¢ on a $7 stock is 2%... JUST TO BREAK EVEN!

then you have to look at a few other aspects.. the momentum, volatility, volume, trends, and more... if you're buying options on a stock like MU for example, youre just throwing money away - especially if youre buying at the money or out the money.

stick to buying options on stocks that move in $'s not ¢'s, you'll make money faster, easier, and with less stress... take AAPL for example, most options will have a spread of 10¢... that means you need AAPL to move only .08% to be at break even

[wallstreetsedge]

by the way.. mrser, i just thought about it and dont mean to attack you if thats how it sounded..

its just that its so much easier to make money on options when the underlying security costs more or the beta is insane...

i have a friend who plays with cheap options but he even admits its excruciating.. he buys options that are normally around 25¢ and sells them as soon as he sees a nickel profit but like i mentioned, on stocks like that... you struggle waiting for a 5-10% move on the underlying stock to see 20% profit while with higher cost securities, you can see a 1% move easily showing you 10-15% easily on your option

[MrSer]

Thanks i know its a real gamble, but I'd thought I'd go for it. I usually buy options on more popular stocks that have a lot of volatility and trade them during the day. I get nice profits off bidu, fslr and other high volatile stocks. Thanks for your time to respond though.

[wallstreetsedge]

Originally Posted by MrSer

Thanks i know its a real gamble, but I'd thought I'd go for it. I usually buy options on more popular stocks that have a lot of volatility and trade them during the day. I get nice profits off bidu, fslr and other high volatile stocks. Thanks for your time to respond though.

when you first came here, i thought you had like $500-1000 in the mkt? also i've never seen you mention options on companies like bidu or fslr, maybe 1 on a single fslr contract (where even if you had tight stop losses, youre probably geting hammered on)... i know ive seen you mention msft, ebay, etfc, solf, and a few others but nothing thats really winning except for etfc but i know you said you sold that long ago