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OpEx Ramps: Will Next Week Be Different?

For at least the last 6 months, the bias in all but one occasion (August) for heading into options expiration (3rd Friday of each month) has been bullish, serving to roast the put holders. Will November be more of the same or another outlier such as we had in August just before the meltdown? Horizontal lines on this daily chart mark the OpEx days, with next the November standard options expiring at the end of trading next Friday.

QQQ OpEx Market Ramps Nov 13th

QQQ OpEx Market Ramps Nov 13th

 

Personally, I'm going against the grain on this one, betting the Q's will have moved substantially lower from here by the end of next week by sitting tight on my short position although I'm eager to see whether or not the bulls step in to buy this gap backfill, which we probably won't know until the end of trading on Monday. Again, I continue to favor on a minor reaction here at the bottom of the gap with continue selling next week & as such, remain short but won't add any short exposure until I see how the markets trade early next week.

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Nov 13, 2015 2:20pm|Categories: Completed Trades - Short, Equity Market Analysis|Tags: , , |7 Comments

7 Comments

  1. HiddenPivots November 13, 2015 2:28 pm at 2:28 pm

    Very well explained Randy.
    I agree, I continue to hold my Jan QQQ & SPY puts, bought small lot of IWM 115.50 Nov 20 calls as a cheap hedge just in case if they catch traders short in the hole for few days. I would love to lose the calls :-))
    I had a nice move today on LEAF one I mentioned last week based on fundamentals… They shook the tree, took out stops and they halted it today, then released the news…

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    • HiddenPivots November 13, 2015 2:30 pm at 2:30 pm

      I should have mentioned that I got stopped out of my LNKD calls today based on the cross :-)) Will revisit that at some point, I’m still inclined to say LNKD will see 270+ by Dec expiry. We shall see.

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      • HiddenPivots November 13, 2015 2:51 pm at 2:51 pm

        Thanks Randy! I just banked my calls that expire next Friday, don’t want to deal with Theta decay, unless stock shoots up $5-$10 as I’m expecting upgrades any day based on today’s news..
        Will look to reload next week with further out calls, hoping it cools off a bit come Monday 🙂

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      • Shambo November 13, 2015 3:08 pm at 3:08 pm

        I don’t comment on your posts because I know next to nothing about options, but I appreciate reading them. Like, I would never have thought about buying some cheap calls as a weekend hedge. I don’t know if I’ll do it, but its a good idea that just wasn’t on my mind at all.

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    • rsotc November 13, 2015 2:40 pm at 2:40 pm

      Wow… a 20% intraday range on LEAF today. Congrats on the trade!

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