Download implied volatility - AlphaShark Trading

3.5.2015 Learning/Understand Implied Volatility:
Yesterday a trader bought 3000 LLTC May 52.5 Calls for $.25
My goal is to take the Speculative Trades, not Trades against Short Stock position.
If a institutional trader buys Calls:
What are their Greeks of LONG Calls:
Delta: Long
Gamma: Long
Theta: Short
Vega: LONG
At the time LLTC May 52.5 Calls were $.15 bid at $.25 offer, 500 up
Trader paid $.25 then the implied volatility goes HIGHER.
The market maker might then be $.20 at $.30, 500 up
If a trader buys May 52.5 Calls, they are BIG order, then the
implied volatility in May will increase, as well possibly in
March, April, June.
Today, a trader bought LLTC March 49 Calls and April 50 Calls:
Implied Volatility will INCREASE in other months such as May:
3.4.2015 The LLTC May 52.5 Calls were bought for $.25, Delta of
15.
Today the stock was up $.70, so the Calls should increase about
$.10 in value.
Today the Calls are $.55, but should only be worth $.35. How is
this possible? IMPLIED VOLATILITY
ADT a trader bought 22,000 ADT April 43 Calls for $.30. The
stock has increase $3 in value, the Delta of these Calls were
$.10. In theory the Calls should increase in value $.30 from
$.30 to $.60.
The power of buying Out of the Money Calls. As the stock
market goes down, implied volatility increases and as the stock
market increases, volatility decreases.
Where is this getting us? There are tips and tricks I can teach
you about trading:
1. Realize when buy Out of the Money Calls, a trader needs
FAR: Fast Aggressive Move in Right Direction
2. Be very careful when buying Calls when the stock market is
lower. Stock market is down 500 points, implied volatility is
higher.
3. So, when the stock is down, this is a GREAT time to Sell Put
Spreads instead of buying Calls. When sell Put Spreads, you are
selling Implied volatility.
ADT April 43 Calls were $.30, Delta was 10, Vega was 5.
Stock went up $1.00, Delta should move option up to $.40, but
they are worth only $.30. How possible? Implied volatility went
lower? The implied volatility went down 2 points.