Expiration Pinning

[chiu]

This Friday is the option expiration day for the Month of May 2007.

Based on the current feel, my take is the following strike price for the following underlying :
1) GOOG : 450, 460 & 470
2) AAPL : 100, 105 & 110
3) OIH : 160 & 165
4) GS : 220 & 230

Let see.

[optionpundit]

Thanks for sharing that chiu..hope to open something either on Thu afternoon or Friday morning.

Cheers and profitable trading, OptionPundit

[chiu]

Based on the recent price movement, the pinning of the four are as follows :

1) GOOG : 460/470, 17/5 closed at 470.96, so likely to be 470 then
2) AAPL : 100/105/110, 17/5 closed at 109.4, so likely to be 110 then
3) OIH : 160/165/170, 17/5 closed at 167.x, can be 165/170, I pick 165 then
4) GS : 220/230, 17/5 closed at 227.x, I pick 230 then

Let see the action tonight.

This Friday is the option expiration day for the Month of May 2007.

Based on the current feel, my take is the following strike price for the following underlying :
1) GOOG : 450, 460 & 470
2) AAPL : 100, 105 & 110
3) OIH : 160 & 165
4) GS : 220 & 230

Let see.

[optionpundit]

pretty much with you on that Chiu. Profitable trading.

[chiu]

After the market opening looking at the premium, only managed to open two trades.

1) GS
Sell May $230/$220 Bull Put Spread at $1.57 credit when GS at 228.9 at 9:41
Buy May $230/$220 Bull Put Spread at $0.5 debit when GS at 230.0 at 11.30
Profit=($1.57-$0.5)*100=$107

2) SHLD
Sell May $180/$175 Bull Put Spread at $1.25 when SHLD at $179.0 at 10:07

Stay tuned.

Based on the recent price movement, the pinning of the four are as follows :

1) GOOG : 460/470, 17/5 closed at 470.96, so likely to be 470 then
2) AAPL : 100/105/110, 17/5 closed at 109.4, so likely to be 110 then
3) OIH : 160/165/170, 17/5 closed at 167.x, can be 165/170, I pick 165 then
4) GS : 220/230, 17/5 closed at 227.x, I pick 230 then

Let see the action tonight.

This Friday is the option expiration day for the Month of May 2007.

Based on the current feel, my take is the following strike price for the following underlying :
1) GOOG : 450, 460 & 470
2) AAPL : 100, 105 & 110
3) OIH : 160 & 165
4) GS : 220 & 230

Let see.

[chiu]

Buy back SHLD May $180/$175 Bull Put Spread at $0.55 when SHLD at$179.5 t 3:45.
Profit=100*($1.25-0.55)=$70.

The closing price are as follows :
1) GOOG 470.01 -$0.86
2) AAPL 110.0 +0.56
3) GS  230.2 +$2.86
4) OIH 169.62 $2.33
5) SHLD 180.0 +$1.32

From the above it is very clear that the pinning works.

2) SHLD
Sell May $180/$175 Bull Put Spread at $1.25 when SHLD at $179.0 at 10:07
[

[chiu]

Expiration is coming Friday on 15 Jun 2007.

Based on the current Open Interest, my take is the following strike price are likely what the Market Markers will be looking for the following underlying :
1) GOOG : 490, 500, 510 & 520
2) AAPL : 110, 115, 120, 125 & 130
3) OIH : 170, 175 & 180
4) GS : 220, 230 & 240
5) CME : 520, 530, 540, 550, 560
6) SHLD : 175, 180, 185

I will need to revise the list on Friday before the market open.  Let see.

[davidtsc27]

Hi Chiu,

It's a very interesting theory.....Care to explain more in detail.....

Thanks,
David

[Edge]

I think he's just looking at the highest OI per strike.

[chiu]

I relook at the Open Interest base available yestersady.  There is no change to the strike prices for the 6 underlying.  Yes, I am looking the highest Open Interest for various strike price contract.

Nevertheless, based on the closing price of the underlying on Thursday, the following is likely to happen :

1) GS closed at 225.73 on 14 Jun 07, highly likely to pin around 230, next then 220.   I will play this as it will move with the good probability and there is premium to be earned for vertical spread.
2) GOOG closed at 502.84 on 14 Jun 07, likely to be 510, next then 500.   This will be a good test as it is $7.2 to move to 510 instead of $2.8 for $500 strike.   This will be a bit more speculative.
3) OIH closed at 175.35 on 14 Jun 07, likely to pin at $175,  can try to earn on verical spread premium when it moves away if there is no strong broader market sentiment.
4) AAPL closed at 118.75 on 14 Jun 07, likely to pin at 120, next to 115.  There is still $1.25 of price movement.
5) CME closed at $547.49 on 14 Jun 07, no preference on 550 or 540, it will be easier to pin at $550.
6) SHLD closed at $174.94 on 14 Jun 07, pin at $175 likely.  It is very close to the strike already, opportunity comes if  moves away from the strike and there is no strong broader market sentiment.

In conclusion, it will be interesting to see the action today.  Let see.

Expiration is coming Friday on 15 Jun 2007.

Based on the current Open Interest, my take is the following strike price are likely what the Market Markers will be looking for the following underlying :
1) GOOG : 490, 500, 510 & 520
2) AAPL : 110, 115, 120, 125 & 130
3) OIH : 170, 175 & 180
4) GS : 220, 230 & 240
5) CME : 520, 530, 540, 550, 560
6) SHLD : 175, 180, 185

I will need to revise the list on Friday before the market open.  Let see.

[chiu]

Opening was already very bullish, some of them already moved in price.

Put in the following positions:
1) Sell 2 GS Bull Put Spread 220/230 at $2.05 credit at 21:34 when GS at 228.5, looking at GS to pin at $230.
2) Sell 1 CME Bear Call Spread 550/560 at $2.30 credit at 21:44 when CME at 551.6, looking at CME to pin at $550
3) Sell 1 GOOG Bull Put Spread 510/500 at $3.6 credit at 21:45 when GOOG at 506.7, looking at GOOG to pin at $510.
4) Sell 1 OIH Bear Call Spread 175/180 at $2.3 credit at 21:58 when OIH at 177.2, looking at OIH to pin at $177.5.

Target order to buy back at $0.5 debit for all the above.

Let see the pinning action toward the close.

[slimetar2]

Trading Bull spreads or bear call spreads into the money is directional strategy and it can hurt.
Better way is to sell at the money call and at the money put with protection on each side, if you wish.

AAPL does have 0.75 premium but some you have to give back if the call or put is in the money, not much there.
SHLD has 0.20 cents and 0.25 cents premiums, not worth touching.
OIH is stuck between 175 and 180 strikes
GOOG is getting closer to 500 than 510

[chiu]

slietar2,
You are right.

This month the expiration pinning did not happen for half of the underlying that I am watching and playing.
I made on CME and lost on the other three.

Let see the closing price of the six :
1) AAPL closed at 120.50, it was pinned around 120.0 from the opening bell.
2) SHLD closed at 174.98, same from the opening bell. So only two out of 6, obvious from the opening bell.
3) CME had a wild ride from openning bell up to 558 before moving down to 550.  But last 1 minue shot up to 552.70 for unknown reason.
4) OIH closed at 177.65, 3/4 of the whole number ?
5) GOOG closed at 505.89, 1/2 of the whole number ?
6) GS closed at 226.19 on a strong opening bell till 228, which led me to feel that it might pin at 230.

Half or more of the six did not quite pin at the whole number.   Instead, a quarter and half way might be a likely case.  One reason for not pinning at the whole number if the opening interest does not warrant them to move it.

I was over confident !     It will be better if I were to make a decision after watching the price movement till 11:00/12:00 especially if it is more than $2.5 away from the whole number strike price.

Trading Bull spreads or bear call spreads into the money is directional strategy and it can hurt.
Better way is to sell at the money call and at the money put with protection on each side, if you wish.

AAPL does have 0.75 premium but some you have to give back if the call or put is in the money, not much there.
SHLD has 0.20 cents and 0.25 cents premiums, not worth touching.
OIH is stuck between 175 and 180 strikes
GOOG is getting closer to 500 than 510

[slimetar2]

The pin action was a bust. In one sense I knew what was coming down. I was wrong on OIH it fell down to 176 and than rallied back up to 177.86. Google though went down to 503 and to 501.5 last hour of trading, and I sold some calls and I was barely able to get a $1.00 out of them when it started rally back to 505. I had to balance my delta so I sold some july 510, 520 puts which I still own and if Google rallies, they are like calls, and will be profitable. Overall a discouraging time this Friday. I didn't do too well either.

One thing I learned however, if the strikes are not clearly visible, don't initiate positions early on. Wait for the strikes to appear, and than initiate your positions, that way you can't go wrong and one will be profitable in most instances.

[chiu]

Expiration is coming Friday on 20 Jul 2007.

Based on the current Open Interest, my take is the following strike price are likely what the Market Markers will be looking for the following underlying based on 13 Jul closing price and 12 Jul Open Interest :
1) GOOG at 552.16: 530, 540,550 (=>favour a lower strike price)
2) AAPL at 137.73 : 115, 120, 125, 130, 135 (=>favour a lower strike price)
3) OIH at 179.89 : 175, 180, 185, 190 (=>favour a higher strike price)
4) GS at 222.18 : 220, 230
5) CME at 584.5 :  540, 550, 560, 570 (=>favour a lower strike price)
6) SHLD at 157.4: 155, 160, 165, 170 (=>favour a higher strike price)

Based on the last expiration experience, I will revise the strategy to be deployed.
1) Wait for the intraday underlying price movement to be clearer before putting in a spread order
2) It might be good to look at the intraday play as the price movement tends to be trendy for a few dollars movement but need to watch out for the reversal.    So we will see the price push up(or down) in one direction, we could ride on it.  But watch for reversal if it fails, then ride on the opposite direction.