The tastytrade network

Today on Calling All Millionaires, Tom Preston joins the show and discusses one of his favorite trades. The trade has to do with the relationship between bonds and notes, but it is not the nob spread! TP explains that through his experience, he has come to realize that bonds move twice the amount that notes move. He explains how to compare the two underlying's volatility and net change, to get a number that is around 2. How should the trade be placed if that number is above or below two? Find out here!

The LIZ & JNY Show - October 2, 2014

Yesterday, Katie and Bat saw some large moves in many of her more neutral positions, and for this, she has mechanically rolled the untested side of her strangles. Today is no different. In XOP, there are two options to adjust her Inverted strangle: continue to roll down the call, or roll into the next month. Ideally, the duo wants to roll the entire trade into next month, but they are awaiting a rally in the underlying. There are similar mechanics at play in X, however, rather than rolling for duration, the team looks to simply roll down the Call and stay in OCT. Last but not least, volatility is still high in /CL, and while the team isn’t looking to manage their tested Strangles just yet (they’re waiting until the tested side reaches a 30 delta), Tony urges Katie to take a look at the richness and sell more premium in a similar underlying, such as USO.

Yesterday, Katie and Bat saw some large moves in many of her more neutral positions, and for this, she has mechanically rolled the untested side of her strangles. Today is no different. In XOP, there are two options to adjust her Inverted strangle: continue to roll down the call, or roll into the next month. Ideally, the duo wants to roll the entire trade into next month, but they are awaiting a rally in the underlying. There are similar mechanics at play in X, however, rather than rolling for duration, the team looks to simply roll down the Call and stay in OCT. Last but not least, volatility is still high in /CL, and while the team isn’t looking to manage their tested Strangles just yet (they’re waiting until the tested side reaches a 30 delta), Tony urges Katie to take a look at the richness and sell more premium in a similar underlying, such as USO.

Matt Ingleby, CEO of Ript Apparel, joins Tom and Tony to discuss how he and some friends completely bootstrapped a growing online clothing store. Ript Apparel uses an innovative model to sell shirts, offering 3 new t-shirt designs for sale every day that are removed at 12:00am. By holding off on production until all orders are received, costs are limited, and a growing network of external designers continue to contribute new t-shirt ideas. With fresh content every day and a limited time frame to buy, the company has a loyal customer base and is now looking to expand.

Tom Sosnoff and Tony Battista are joined by Jacob Perlman as they discuss Value at Risk. Value at Risk is a formula that is used to value your total portfolio. Jacob explains how Value at Risk is used and what to be aware of if you see losses that are greater than what the formula is calculating.

Scott Sheridan discusses his pairs trade of 7 SLV (Silver) contracts to 3 GLD (Gold) contract. The highly correlated ETFs have significantly different Implied Volatility Ranks. With the extended duration by going out to November (51 days to expiration), Scott sees this as an opportune options pairs trade because of its high probability of profit.

Here at tastytrade, one of our main trading edges lies in selling premium when Implied Volatility (IV) is high. This allows us to collect more premium for the trades that we are placing and increase our probability of profit (POP). Today. Tom Sosnoff and Tony Battista look to put some numbers around how long it takes for IV to expand. They also look at how quickly IV contracts back to low levels. This helps them put a lot of context around why it is so important to take advantage when IV is high. The guys find out that IV tends to be in its lower range two-thirds of the time and that IV contracts much faster than it expands, taking an average of 231 days to expand and only 111 to contract. Since IV is high only one-third of the time and contracts much faster than it expands, it is very important to take advantage of these limited opportunities and scale into these trades. This allows you to capture a larger return on capital and increase your overall profit!

There as been a lot of high volatility around EWZ recently due to the upcoming elections. This as has provided us a number of trading opportunities. Just like any trade, Tom Sosnoff and Tony Battista like to have some background on why Implied Volatility (IV) is high and when it is might contract. Today, they take a look at some of the major companies that are a part of EWZ and what the upcoming elections are looking like to see why EWZ is behaving the way that it is.

tastytrade LIVE - October 2, 2014