Options

• "Greek Speak" with Al Brinkman-

  WTV's "Greek Speak" options expert, Jared Levy, talks with Al Brinkman of the Philadelphia Stock Exchange. To see this episode in full and for free, please go to www.wizetradetv.com

• Oil Price Rise Has Big Implications
• Commodities Bubble?
• Do you believe Oil prices are being manipulated by energy traders
• Goldman Earnings Volatility Crush Strategy- A fellow options trader from Texas came up with this very interesting volatility based earnings play for Goldman Sachs (GS) - who report earnings on Tuesday, March 18th.
  
  The nice thing about this play is that price direction after the earnings announcement is irrelevant and the options won't get crushed on a volatility drop the way a straddle or a strangle will.
  
  The Play: Reverse Calendar Spread
  
  STO July 150 Puts (will suck some margin - depending on how your broker calculates position or portfolio risk)
  BTO April 150 Puts
  
  Rationale
  
• Playing Chess with the S&P500 Part II: Market Pushes Lower- In part two of our series, we’re going to look at how we can adjust our original strategy (the Put Diagonal) to take advantage of a fairly large push lower by the SPY’s.
  
  We started our strategy on Friday, March 14 with a Put Diagonal (see original article) and by Monday morning, things were looking pretty ugly for the markets as emergency moves had to be taken over the weekend by the Federal Reserve to deal with Bear Sterns. As a result, the Asian markets had sold off quite hard on Sunday and by Monday morning the index futures in the U.S. were pointing to a big down day initially.
  
• Stock Replacement Theory, The Cycle- We’ve started with an introduction to the stock replacement strategy and we’ve gone over the plan. Here’s a recap of the plan: 1. Purchase deep in the money calls for a high momentum stock as its delta is close to 1, resulting in an almost 1:1 movement in call value to stock price 2. Short common stock against the long calls as a protective put and for income 3. Sell near or at the money calls (especially close to some sort of event) for income. Near or at the money calls lose a bit of energy as the stock price rises since its delta begins to approach 1
• New Weapon to Arsenal-

  I don’t know about you, but this is becoming one wild ride. After dropping 200 points, rising 200 points, rising another 300 points, I can’t take much more of it! So I asked myself, “Self, what can I do in order to take advantage of these wild swings?” I came across a strategy that’s pretty risky but might just pay off in a market like this.

  Options Strategy: The Straddle

  The straddle consists of purchasing a call and a put at the same strike price in the same month. Here’s a graphical interpretation from Investopedia:

• Stock Replacement Strategy, The Plan- From the introduction, here’s the current status of the example stock replacement strategy: Long 10 x GOOG Mar 610 Call @ 95.4 = $95,400 The second phase of this strategy involves shorting common stock against the long calls. The calls act as protection against your shorted common. This effectively creates a put against your calls. So how would this work in the money making cycle? I sat around for a bit thinking about how it worked. Using Google again, let’s go ahead and short 50 shares at the current price of $673. Now our example strategy shows the following:
• Stock Replacement Strategy, An Introduction- Over on TheStreet.com, Jim Cramer and his partner James Altucher have created a couple of video segments regarding options and a strategy Cramer calls stock replacement. I’ve searched the internet for what stock replacement is and how the theory is applied but sadly came up very little. Here’s the excerpt from Investopedia regarding stock replacement:
• Shorting The Nasdaq 100- By John Manley DMS
  
  Several readers have asked me to post an example of shorting the Nasdaq 100 with a spread. The example below was created with real market prices on the morning of October 15th.
  
  Hedged Short Spread - NDX (Nasdaq 100 index)
  
  The Play: Put Diagonal - NDX (November / December)
  
  STO (sell to open) 2 Nov 2100 Puts
  BTO (buy to open) 2 Dec 2050 Puts
  
  Hold time: 16 to 24 days (see model)