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Monday, November 26, 2012

Mini-Options Anyone?

Wow, this is exciting.  On some equities, we'll be able to trade options on 10 shares of a stock/ETF
instead of 100.   This will mean less margin, less fees and likely less premium, but for the small,
beginning trader, this is WONDERFUL.   Unrolling on March 18, 2013 according to  Futures Mag.

NEW YORK, November 26, 2012 - The International Securities Exchange (ISE) today became the first exchange to confirm a launch date of March 18, 2013 to commence trading in Mini Options. Since receiving Securities and Exchange Commission (SEC) approval for this innovative new product offering, ISE has been coordinating with its member firms to determine an appropriate date for launch readiness. Mini Options will represent a deliverable of 10 shares of an underlying security, whereas standard contracts represent a deliverable of 100 shares. ISE will initially list Mini Options on the following securities: APPL, AMZN, GLD, GOOG, and SPY.
"We are very pleased to announce a launch date of March 18, 2013, to begin trading Mini Options," said Gary Katz, President and CEO of ISE. "This exciting new product will make trading options on popular, high-priced names like Google and Apple more affordable and more flexible for the retail segment of the market. We look forward to coordinating with our member firms to achieve a smooth rollout of Mini Options in March and to broadening the reach and appeal of the options product to retail investors with this new offering."
Mini Options will have the same expiration dates as their standard counterparts, including Weeklies and Quarterlies. Strike prices will also align to those of the standard contracts, as will the quoted bids and offers. The fees associated with Mini Options will be filed with the SEC and announced at a later date.

Sunday, November 11, 2012

Options on Futures

My last post had to do with Karen, the Super Trader, and it seems to be no accident that Sosnoff introduced me to naked OTM short strangles, and then Karen comes along and validates the strategy with her incredible story. (if you haven't watched her videos, you really should.)

If you don't know what a short strangle is, watch out. You'll hear alllll kinds of scary warnings (like NEVER do a naked option, EVER, EVER). You need to open your mind to learning it ALL and THEN make up your own mind. Just remember we are talking about very, very far out of the money options.

One of my Trading Divas last year was a professional futures trader, and she came to our group to learn options. I just assumed (silly me) that she was going to trade equities, like the rest of us. But no, she planned on trading options ON FUTURES. My eyes crossed and then she went north for the summer, but "futures" stuck in my head. Something I knew nothing about. But didn't I have enough on my plate??

So this just set me up for the next step. Fascinating.

Well, it seems that every day brings new information, new depths to options trading. I no sooner learn one system of trading than a whole new view pops up. I met a local trader here in Naples who only trades Oil Futures, naked strangles...and trading with options. He was kind enough to give me some basic information and turned me onto a book called "The Complete Guide to Option Selling" (second edition) by James Cordier & Michael Gross.

That was a revelation.  I got a "crash course" on Futures.  Stay tuned.  I expect to fill these pages with new education.  I find it so invigorating to know this education just goes on and on and on.