{"id":15234,"date":"2011-11-17T19:00:00","date_gmt":"2011-11-17T19:00:00","guid":{"rendered":"https:\/\/www2.thestockmarketwatch.com\/stock-market-news\/boring-trades-for-a-crazy-market\/15233\/"},"modified":"2011-11-17T19:00:00","modified_gmt":"2011-11-17T19:00:00","slug":"boring-trades-for-a-crazy-market","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/boring-trades-for-a-crazy-market\/15234\/","title":{"rendered":"Boring Trades for a Crazy Market"},"content":{"rendered":"<p><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-1408583772585547\";\n\/* SMW - News Links *\/\ngoogle_ad_slot = \"3490797620\";\ngoogle_ad_width = 468;\ngoogle_ad_height = 15;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<p><!--Ad Injection mfunc mode ad include code--><br \/>\n<!--mfunc include_once('\/mnt\/Target01\/327806\/www.thestockmarketwatch.com\/web\/content\/stock-market-news\/wp-content\/plugins\/ad-injection\/adshow.php') --><br \/>\n<!--\/mfunc--><\/p>\n<p>The following is a post by <span style=\"color: #3366ff;\"><a href=\"http:\/\/www.zentrader.ca\/blog\/?p=136\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #3366ff;\">Christopher Ebert<\/span><\/a><\/span>, who uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. He studies options daily, trade options almost exclusively, and enjoys sharing his experiences with anyone who is interested.<\/p>\n<p>I haven\u2019t had much faith in my technical indicators lately. It seems like triple digit swings in the Dow have become the norm, not just daily, but often intraday. So rather than give myself an ulcer, over the next several weeks I will be tracking a set of boring option trades.<\/p>\n<p>I\u2019m not making any predictions here, just taking my best shot and then reacting. This is not advice or a solicitation to trade any of the products mentioned; they are only examples to show possible ways to trade options and manage those trades. Each week, I will react to the market\u2019s behavior by adjusting the trades accordingly.<\/p>\n<p><!--mfunc adshow_display_ad_file_v2(array('ad_random_1.txt'), array(100), array('align' => 'float right', 'clear' => '', 'margin_top' => '', 'margin_bottom' => '', 'padding_top' => '', 'padding_bottom' => ''), array(), array()) --><\/p>\n<div style=\"float:right;margin-left:5px;\"><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-1408583772585547\";\n\/* SMW - in News 300 *\/\ngoogle_ad_slot = \"5684630733\";\ngoogle_ad_width = 300;\ngoogle_ad_height = 250;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/div>\n<p><!--\/mfunc--><\/p>\n<p>Volatility has been high for months now, but it is still fluctuating wildly. The first trade on my option\u2019s list involves a short straddle on the iPath <a href=\"https:\/\/stockmarketwatch.com\/markets\/sp500\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> VIX Short Term <a href=\"https:\/\/thestockmarketwatch.com\/markets\/commodities\/today.aspx\">Futures<\/a> ETN (<a href=\"https:\/\/thestockmarketwatch.com\/stock.aspx?stock=VXX\" target=\"_blank\" rel=\"noopener\">VXX<\/a>). I\u2019ll be attempting to capture the swings in volatility by opening new positions on VXX as it moves.<\/p>\n<p>Here\u2019s the trade:<\/p>\n<ul>\n<li>SHORT 1 VXX $47 Dec. 17 \u201911 CALL @$5.00<\/li>\n<li>SHORT 1 VXX $47 Dec. 17 \u201911 PUT @$6.25<\/li>\n<\/ul>\n<p>I\u2019d still like to get back into the market when things settle down. With the S&amp;P still having support near the recent low at the 1110 level, I\u2019ll be selling naked puts on the SPDR S&amp;P 500 ETF (<span style=\"color: #3366ff;\"><a href=\"https:\/\/thestockmarketwatch.com\/stock.aspx?stock=SPY\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #3366ff;\">SPY<\/span><\/a><\/span>).<\/p>\n<p>Here\u2019s the trade:<\/p>\n<p>SHORT 1 SPY $110 Jan. 21 \u201912 PUT @$2.44<\/p>\n<p>Anyone who follows <span style=\"color: #3366ff;\"><a href=\"https:\/\/thestockmarketwatch.com\/stock.aspx?stock=SLW\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #3366ff;\">SLW<\/span><\/a><\/span>) and one on the United States Oil Fund LP ETF (<span style=\"color: #3366ff;\"><a href=\"https:\/\/thestockmarketwatch.com\/stock.aspx?stock=USO\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #3366ff;\">USO<\/span><\/a><\/span>). Not wanting to risk too much, the first trade is a vertical bear put spread on SLW. Loss on the trade is limited to the net debit, and I hope to minimize that loss should it become necessary. Vertical spreads are also nice because they often close themselves out without resulting in a position in the underlying stock.<\/p>\n<p>Here\u2019s the trade:<span id=\"more-9937\"><\/span><\/p>\n<ul>\n<li>LONG 10 SLW $35 Dec. 17 \u201911 PUT @$2.22<\/li>\n<li>SHORT 10 SLW $32 Dec. 17 \u201911 PUT @$1.04<\/li>\n<\/ul>\n<div style=\"text-align: center;\"><a href=\"http:\/\/www.zentrader.ca\/blog\/wp-content\/uploads\/2011\/11\/Silver-Technical-Analysis.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-9940\" title=\"Silver - Technical Analysis\" src=\"https:\/\/web.archive.org\/web\/20111119124228im_\/http:\/\/www.zentrader.ca\/blog\/wp-content\/uploads\/2011\/11\/Silver-Technical-Analysis.png\" alt=\"\" width=\"525\" height=\"375\"><\/a><em>Weakness in SLV will keep pressure on all miners.<\/em><\/div>\n<p>Hoping to capitalize on a drop in oil in the near term and a possible bounce back early next year, the last trade is a calendar call spread on USO. Again, it is a low risk trade due to the protection provided by the long call in case some unforeseen event causes oil prices to spike. If prices do drop in December, the short call would expire worthless and the premium retained could cover most or all of the loss on the long call, which could either be sold at that point, or held to benefit from a January rebound.<\/p>\n<p>Here\u2019s the trade:<\/p>\n<ul>\n<li>SHORT 10 USO $38 Dec. 17 \u201911 CALL @$2.38<\/li>\n<li>LONG 10 USO $38 Jan. 21 \u201912 CALL @ $3.20<\/li>\n<\/ul>\n<div><a href=\"http:\/\/www.zentrader.ca\/blog\/wp-content\/uploads\/2011\/11\/Oil.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-9941\" title=\"Oil\" src=\"https:\/\/web.archive.org\/web\/20111119124228im_\/http:\/\/www.zentrader.ca\/blog\/wp-content\/uploads\/2011\/11\/Oil.png\" alt=\"\" width=\"525\" height=\"375\"><\/a><\/div>\n<p>I\u2019ll be posting weekly updates on the progress of these trades, and any adjustments I have made, or think might be necessary in the near future.<\/p>\n<p style=\"text-align: center;\">Related Posts:<\/p>\n<p style=\"text-align: center;\"><span style=\"color: #3366ff;\"><a title=\"Permanent Link to Volatile Times Call For Unique Option Strategies\" href=\"http:\/\/www.zentrader.ca\/blog\/?p=9252\" rel=\"bookmark noopener\" target=\"_blank\"><span style=\"color: #3366ff;\">Volatile Times Call For Unique Option Strategies<\/span><\/a><\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"color: #3366ff;\"><a title=\"Permanent Link to Are Naked Puts Risky Business? (Part 2)\" href=\"http:\/\/www.zentrader.ca\/blog\/?p=9071\" rel=\"bookmark noopener\" target=\"_blank\"><span style=\"color: #3366ff;\">Are Naked Puts Risky Business? (Part 2)<\/span><\/a><\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"color: #3366ff;\"><a title=\"Permanent Link to Seeing Options From Both Sides\" href=\"http:\/\/www.zentrader.ca\/blog\/?p=7798\" rel=\"bookmark noopener\" target=\"_blank\"><span style=\"color: #3366ff;\">Seeing Options From Both Sides<\/span><\/a><\/span><\/p>\n<p><a href=\"http:\/\/www.zentrader.ca\/blog\/?p=9937\" target=\"_blank\" rel=\"noopener\">Read more here<\/a><\/p>\n<hr>\n<table style=\"border:none;margin:0;\">\n<tr>\n<td style=\"padding:5px;vertical-align:top;\" valign=\"top\">\n.<\/td>\n<td style=\"padding:5px;vertical-align:top;\" valign=\"top\">\n<div style=\"font-size:11pt;\"><b>Post Written By: Zen Trader <\/b><\/div>\n<div style=\"font-size:10pt;\">\n<\/div>\n<\/td>\n<\/tr>\n<\/table>\n<p><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"pub-1408583772585547\";\n\/* 336x280, created 7\/9\/11 *\/\ngoogle_ad_slot = \"3552319058\";\ngoogle_ad_width = 336;\ngoogle_ad_height = 280;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<div style=\"margin:5px;margin-bottom:20px;font-size:11pt;\">&laquo; 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