Friday Update
Friday Update Hello Smart Option Sellers! Oracle (ORCL) We're currently working an order to buy back our put-sell position for the Oracle December $33 puts for $.05 per contract. There have been some trades at $.05 in dribs & drabs, but not to the level where I can call it officially done. I heard from a handful of you who placed the order before we officially did as you had been proactive on it. For the rest of you working this trade, please let us know if/when you have been filled. I'm still a bit surprised that we haven't fully been filled yet, but this is the major reason why I like to wait until I see the $.05 offers show up, instead of us putting in a $.05 bid. I figured that since the market had been $.04 bid/$.06 offer when we entered the trade, we'd be able to easily get filled at $.05 per. Not so in this case. Once we put in that $.05 bid, the market makers will "lean" on our order and make us wait for as long as possible. "Lean" is a pit trader term used to describe resting orders such as ours. The market-makers know we are there with a $.05 bid, so they can use our orders as a safety net to help offset completely different trades they might enter . For instance, they can enter into a different option trade on ORCL that's beneficial to them, but only if they know they can still sell to us at $.05 per contract. They're working on a spread trade using our potential $.05 bid as a crutch, so they will work their other trade and "lean" on our $.05 bid. Once our $.05 bid is gone, they have nothing to "lean" on anymore to help with the other trade they are working. Make sense? Regardless, I hate being leaned on by the market-makers. At this point it's a game of chicken to see who will flinch first. It's not going to be us! They'll come around and eventually will fill us. You'll see. Keep working it GTC. Netflix (NFLX) I appreciate the emails that have come in over the past few days about the NFLX credit spread trade and the description of the strategy itself. It's a solid way to play the options markets, especially with some of the higher-priced stocks. Those of you who entered this unofficial play were able to sell the spread between $.28-$.30 per spread. Well done! I'll have more information over the next few weeks about what the future plans are. Stay tuned. Friday Q&A Q: I was able to close this trade last Thursday at .05. Let me ask a question...When I see contracts trading around .06 to .09, I put in a buy to close order at .05, GTC. Is this alright or does it trigger some unknown action on the price makers end. A: This question is in regards to the ORCL trade we're trying to buy back. As I mentioned above, some of our members place their buy-back GTC orders well before I issue the official alert. This is fine, but it still allows the market-makers to lean on your order too whether you realize it or not. But if there's only a handful of orders, it doesn't totally tip them off. Once we all come in at the same time with the buy-back orders, the market-makers pay attention and decide to play games with us (lean on us). To reiterate, this is why I'd rather wait to see the $.05 offers show up. That way, we can just go in and scoop them up instead of us being the $.05 bid and having the market-makers hold tight to their $.06 & $.07 offers. That's all for now. Continue to hold all other positions as-is. Have a great weekend! Contact me here Regards,
Lee Let's Grab That Cash!
Current Portfolio Continue to work all other trades as instructed and continue to hold all other open positions as-is. See the Current Portfolio below for current prices & instructions. Note on the Current Portfolio - if you are a new subscriber and don't have a position yet on any of our trades, make sure you enter your order at the original recommended sell prices. Do no enter any order unless the current option price is at, or higher, than the official recommendation. If you are unsure or have any questions, please ask us!
