14 replies to this topic

[eminimee]

Tea,

Any daytrader who claim that they sucessfully daytrade the Post-fed volatility raises serious questions about their credibility. Last Fed meeting was one exception, where the market went staight up, without much whipsaw. Most other fed meetings are not playable. Like Skunk said, before you can click the mouse, the market races away 3-4 points and by the time you realize you are on the wrong side and click the mouse again, you lose another 3-4 points. There are 200+ trading days in a year. Why waste your money in this silliness when the big progams are fighting it out. Only way to play it is position a day or two ahead of time and have wide stops. I had a long going from yesterday from SPX 1530 with a stop at 1522. So i survived.

Got that so right....

[maineman]

No one in thier right mind should be trading futures around key FOMC announcements. The emotions, volatility and potential manipuations are huge. Remember, "they have more money than you". The only way I "play" is to put in foolish bids and offers on OEX calls (or puts) on what I expect to be insane price swings, in an effort to capitalize on the panic. Someone in this thread, I believe, mentioned "market" orders.. this is truly nuts. The price of an SP future can change by 10 points or more in a matter of seconds. You should never use market orders on ANYTHING, imho, let alone in "fast" market conditions. In my style of option play, say an option has a bid of 5.50 and and ask of 6. I may put in an offer to buy 100 contracts at 3, 100 at 3.50, 100 at 4.00 etc. in anticipation of a panic decline. If these low bids are hit, great. I'm in and I have to "manage" the position. If the panic doesn't pan out, I'm not better or worse off than I was a few minutes ago. . This is simlar to how I "unload" them when I carry them overnight. If I see the futures up, I'll offer them at sky high prices going into the open, hoping to capture the "exuberance" that often accompanies the opening bell.... But to anyone who "plays" FOMC without strict rules and a clear trading plan, god help them... mm

[kaiser soze]

I think it is hubris to believe that nobody can trade Fed days just because some people cant. I regularly trade Fed days and am successful 70% of the time. Because of the large swings in both directions, position sizing is critical and is a function of conviction level. Typically the reaction is easier to trade than trying to position for the final outcome. Yesterday my indicators gave me a strong buy signal when the Qs dropped to 54.05 during the initial post-fed swoon. Because of my strong conviction level, I put on a FULL SIZE long position, which I subsequently unloaded close to the highs of the day. Of course, I was lucky to make a near perfect trade but I have always noticed that when the Qs surmount a new strike, they cross it and then pull back. In this case Qs crossed 55 and I had a target of 55.12 but the reversal began at 55.07. I unloaded at the second reaction high around 55.01-55.03. Except for a small position of 10 Nov 22.5 Vix Calls that I picked up with profits at the end of yesterday, I am flat.

Edited by kaiser soze, 01 November 2007 - 07:35 AM.

[eminimee]

I was specifically talking futures...buying the Q's would be a little easier...good trade KS. I sold the close...q 55 puts and oex weekly 720 puts....Q's at .95 cents and OEX puts at 2.50 Teaparty Yesterday, 04:10 PM Post #6 Member Group: TT Member+ Posts: 10004 Joined: 20-September 03 Member No.: 99 Now I'm short ...via Q nov 55 puts at .95 cents... edit....and now OEX via weekly options...720 puts at 2.50. No futures until the morning. This post has been edited by Teaparty: Yesterday, 04:12 PM

[kaiser soze]

That was prescient of you to pickup those OEX puts. Like Maineman, I also noticed the bizarre pricing on the OEX weekly options post-fed where the calls kept going down in value as the market recovered. I too went hmmm.. but wasnt quite sure if it was the Fed premium coming off the options or the market makers positioning for downside on Thursday. Looks like it was the latter. Lets see where they open the VIX today.