Moving forward – DBVT

I had opened a Credit Put spread 10/15 on DBVT with a, in retrospect huge risk of 423$ / contract. Sure DBVT is trading above 40$ but someone is willing to pay more than a Dollar / contract to have the right to sell DBVT at 10$.
Talk about something being fishy here. It’s a biostock and it smells.
I have no idea what’s the case, but I know, a regular stock trading at 40$ has no puts at strike 10 paying more than a Dollar.
So, that risk I took, looks no longer fair to me. On the other hand DBVT is trading above 40$, I will not take a loss on that trade, because I feel uncomfortable with the trade.

Let’s try and bring the risk down.

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Here you see my DBVT Credit Put spread…

I feel uncomfortable…
Let’s make an iron condor out of that Credit Put spread.
Sell the 40/50 Credit Call spread for a sweet 6.05 / contract, which brought my risk down 75%.

Let’s tweak it even further, really spoils one
Trying to add an iron condor inside the existing spread, did not work yet.

I got no fill!

Maybe I need to try to add the legs individually. That might work. Will see today.


AXON delivered

No cure for Alzheimer

…and I did good closing that AXON Credit Put Spread prior to the announcement of another failed Phase3 study.


I was in VSAR…stock trading at $21, a credit put spread 7.5/2.5 looked enticing. I took it, loss potential $2695 for a gain of $805. A nice credit!

Little did I know about failed Phase 3 studies!




Moving forward…

I closed my AXON and my ZGNX vertical spreads. Same story, pump and Phase 3 results at the end of September. It may go both ways and looking at the open interest traders seem to think so as well.

The loss is at max, so I keep the trade open, maybe someone starts pumping VSAR before expiration again…Twitter is gearing up already…calling that P3 study not a failure after all.

Doing nothing

Doing nothing…never thought, that this would be so difficult!
I have my portfolio of Credit put spreads


Now I simply have to wait until expiration to let them expire worthless.

I checked, there are no earnings releases until expiration.
Still the implied volatility levels are off the chart. (Only exception BLK)
And the implied volatility is as high as it is, because AXON, ZGNX, VSAR and DBVT have potential studies released in the next weeks, which may move the underlyings strong.

While I can understand an options pricing in ZGNX


or in AXON

as this reflects the markets perception of an imminent drop in volatility after a huge move up or down in the stock I sure can not understand the pricing in DBVT

But it is not my place to understand the market. It is not on me to question why. The only thing I know is, that DBVT is trading at $44, that the 52 week low is at $31 and that over a 5 year period DBVT has not traded below $20. Still someone is paying a dollar five to be allowed to sell DBVT at $15 on or before October 20th.

Maybe an insider knowing something about some really catastrophic study results? Maybe DBVT filing for insolvency? I have no idea, I can find no corresponding information, which means, unkown Put buyer, I’m glad to offer you the opportunity to sell me DVBT at $15 until October 20th (with DVBT trading at $44)

Of course the Credit Put Spread 25/30 or a naked Put at 30 is even more enticing. 5.22 to take on the risk, that DVBT won’t make a 40% move down until October 20th. But I already have 2 positions, where a 40% – 50% down move brings my Credit spreads into the money…keep it safe and add a position, where someone pays 1.05 to have insurance against a 65% down move.

Doing nothing, one of the hardest things to learn as an options seller. But you know what, I can sit on my hands and let time work for me!

The start of a new journey

Google Options trading and you will find a lot of bs, sites trying to hook you with free offers, promising the latest, the one and only options strategy, which will make you rich beyond your dreams in a fortnight.
I watched one presentation with limited audience (500) trying to sell me 10 strategies for just 1995 $, a bargain according to the presenter.

I always ask myself, why would someone sell a system, if said system can make him millions easily?
Maybe it‘s because the system still requires a trader executing that system and it only looks good in hindsight? And if only 1% signs up after a presentation of 40 minutes to 1 hour, it‘s still 10 grand in 1 hour!

But that presentation gave me a gem:
You will hear quite a lot from this site, as the searches this site offers are really fantastic.
And different from that options marketeer, that site offers 1 free month followed by a reasonable monthly fee, if you want to continue using them.

Globetrader goes Options trading

It has been quite a while that I have written a blog. But as I’m now trying a new approach to trading, maybe it is time to resume writing as well.

A few months back, I went through my trading books and held in my hands an Options trading book. I had never traded options and to tell the truth, trading futures and forex held the lure of easier and bigger profits. Was I wrong! Nothing is more intense than daytrading and with the concentration on my job I simply no longer had the time to daytrade, so I stopped, just dabbling in the markets now and then when I saw such a big opportunity, that I could not ignore it. But even then I held to my daytrading beliefs…be out of the market at market close and left most of the profits on the table.

Back to June. I grabed my primer to options trading and after a while I was hooked.

– Investing instead of trading
– Known profits instead of searching for the perfect exit
– Being somewhat right is enough
– Just have an opinion where your underlying won’t go

I started to setup an options trading account and got myself more books.

A new journey has begun.