CBA - Commonwealth Bank of Australia

[Captain_Chaza]

My Apologies for Posting in the Wrong Thread
It Would be appreciated if Someone could Move it to The Storm at Sea

 

[qldfrog]

Just a small comment :
CBA had a great day today with the Santa F1 race:

yet, my short (put CBA3V7) purchased at $6.2 on the 18/12 are now at $ 9.78 '
3 sessions later..not sure what it means but a bit unexpected...not that I complain

 

[Sharkman]

yet, my short (put CBA3V7) purchased at $6.2 on the 18/12

Sorry what? Short puts are sold, long puts are purchased... am guessing you did the latter, as your previous posts seem to suggest you're bearish CBA?

are now at $ 9.78 '
3 sessions later..not sure what it means but a bit unexpected...not that I complain

It's not $9.78 now, it *was* $9.78 when the last person traded it. Looks like the underlying was about $153 at the time, giving an IV of about 21 (assuming that they traded at the mid, and that next year's Feb div will be the same as this year's). At the closing price of $154.68, a 21 IV gives a theoretical price of $8.80 or so (although IVs generally tend to drop when the broader market goes up so that might be a bit overpriced). Still a tidy gain for you so far though, if you are in fact long those puts at $6.20.

 

[qldfrog]

Sorry what? Short puts are sold, long puts are purchased... am guessing you did the latter, as your previous posts seem to suggest you're bearish CBA?



It's not $9.78 now, it *was* $9.78 when the last person traded it. Looks like the underlying was about $153 at the time, giving an IV of about 21 (assuming that they traded at the mid, and that next year's Feb div will be the same as this year's). At the closing price of $154.68, a 21 IV gives a theoretical price of $8.80 or so (although IVs generally tend to drop when the broader market goes up so that might be a bit overpriced). Still a tidy gain for you so far though, if you are in fact long those puts at $6.20.

Yes, sorry for the lingua
i am long these puts as i expect cba to fall on the medium to long term from current crazy PE.

 

[TimeISmoney]

Yes, sorry for the lingua
i am long these puts as i expect cba to fall on the medium to long term from current crazy PE.

Your strike price for that option is at $156,

breakeven point is at (156-6.2= 149.8).

Is that correct?

 

[qldfrog]

Your strike price for that option is at $156,

breakeven point is at (156-6.2= 149.8).

Is that correct?

My understanding indeed, plus costs/fees

 

[qldfrog]

My understanding indeed, plus costs/fees

Obviously, there is an insurance premium, so even with SP at $149/$150 the option will still have some extra value , decreasing until expiry

 

[Sharkman]

Took a look at those options for curiosity's sake, seems I wasn't too far off on my estimate, with the stock barely moved from last close the MMs were showing 8.14/9.04 for a 8.59 mid, as expected IV did back off a bit after the mini rally since yest midday.

Also noticed that the open interest is 2524 contracts... all of them yours I take it qldfrog? That is one massive bearish bet!

 

[qldfrog]

Took a look at those options for curiosity's sake, seems I wasn't too far off on my estimate, with the stock barely moved from last close the MMs were showing 8.14/9.04 for a 8.59 mid, as expected IV did back off a bit after the mini rally since yest midday.

Also noticed that the open interest is 2524 contracts... all of them yours I take it qldfrog? That is one massive bearish bet!

Not at all,i just ordered and got 3 last week
I have been banging here that current CBA PE is utter madness and wanted to back this with a bit of coins
Ideally i would have bought more but not in june expiry which is too soon was looking at 2027, and pricing is far too expensive, plus so illiquid it is not funny.
And did i mention the fees/brokerage....
I have given up on options in the asx market .

 

[Value Collector]

Your strike price for that option is at $156,

breakeven point is at (156-6.2= 149.8).

Is that correct?

Yes, for frog to recover the $6.20 he spent, the CBA shares have to have dropped to $149.80 by mid June.

However, up until expiry date they also carry some time value, but that time value decays away as the time left until expiry date disappears.

So right now there is about $1 of intrinsic value (eg the difference between the market price and the $156 strike price) but there is also a few dollars of time value.

If the price stay exactly where it is now till expiry frog would get about $1.20 back.

 

[Sharkman]

And did i mention the fees/brokerage....
I have given up on options in the asx market .

You're not using IB? In IB that trade would've cost $2.50 of brokerage, and that's only because of the minimum, above the minimum it would be 61.6c per contract (including GST) as CBA counts as tier 5.

 

[qldfrog]

You're not using IB? In IB that trade would've cost $2.50 of brokerage, and that's only because of the minimum, above the minimum it would be 61.6c per contract (including GST) as CBA counts as tier 5.

I use bell direct, nearly $50 fees for $1.5k purchase...
I had trouble with IB setup when i tried to open the account and in the total absence of support at the time, i cross them out.
Not an option i will ever trust..i know, plenty of happy users here.
I also use Saxo $3.3 brokerage, etc , good interface but had a scary platform glitch still unexplained or acknowledge, and deactivated options trading there as a result.
Tasty trade for US options but they do not do asx.

 

[qldfrog]

Apologies for the distraction, let's go back to CBA : closing

A PE above 27 and a div yield of 3%

 

[Value Collector]

Obviously, there is an insurance premium, so even with SP at $149/$150 the option will still have some extra value , decreasing until expiry

I think you are right in your belief that CBA is over valued, they only part in your strategy that worries me a bit, is that you are paying out money while you wait for that price to correct. Prices can stay out of wack for long periods sometimes. So I prefer positions where I get paid to wait for corrections, rather than me paying to wait.

This Leads me to focus more on selling options on under valued shares, rather than buying options on over valued ones.

 

[Dona Ferentes]

buy in the NY what didn't make it in time for the Xmas stocking ? Less than 2 bucks off ATH.

.
there was an article today trying to dig into why Conundrum Bank of ASXia is doing so well. I'll search it out, though it was as clear as mud.
.
"The big four banks’ loyal army of retail investors has long been blamed for the disconnect, clinging onto juicy dividends and reluctant to take profits, but a report from JPMorgan’s equity strategists has found Australia’s $2.6 trillion superannuation industry shoulders some of the responsibility too.

"Jason Steed and Dylan Adrian concur the sector’s outperformance on a global scale is puzzling against modest earnings revisions and a flat earnings outlook. As Australian equity managers dumped the big four banks because they were too expensive to own, super fund investment teams worked against them by stepping in as buyers.

"This is backed up by data, which the broker is at pains to note is only a rough guide. On a total ownership view, the super sector deepened its underweight position in banks over the six months to June 30. However, when positions held indirectly via managed funds are excluded, super funds were shown to be overweight financials.

"Put simply, long-only domestic fund managers think banks are expensive and sold their bank shares. But the banks kept outperforming as passive and retail money flowed in. To keep up with the broader sharemarket, against which super fund returns are judged, the money managers working inside super funds bought bank shares and dialled up their exposures.

 

[peter2]

Another indicator that the Aussie Super funds are becoming too big for the ASX market.

 

[qldfrog]

Btw following various discussions about shorting CBA
i managed to get a put on cba for July at $156 paid 6.30 after fees etc
That was earlier this week when cba was at ath.
Currently around 151 so not far from being in the money.
Time will tell.
Just bought 3 of these so not gambling the house there: going against @peter2 is a near sure way to lose

Put a sell order at $9.75 today as i was on the broker site, which got executed..

3 CBA3V7 sold for $2893.98 after all costs, i wa buying these 3 on the 18/12 for a total cost of $1891.02 so $1k profit, 53% gain in less than a month, yet CBA is still at $153 a pop so not exactly smashed
I am surprised

Should probably reinvest this $1k on a similar trade with same vision.
The power..and risks... of options...
Now how big are my ... As we know, the power of passive investing is monstrous on CBA.

 

[farmerge]

Put a sell order at $9.75 today as i was on the broker site, which got executed..

3 CBA3V7 sold for $2893.98 after all costs, i wa buying these 3 on the 18/12 for a total cost of $1891.02 so $1k profit, 53% gain in less than a month, yet CBA is still at $153 a pop so not exactly smashed
I am surprised

Should probably reinvest this $1k on a similar trade with same vision.
The power..and risks... of options...
Now how big are my ... As we know, the power of passive investing is monstrous on CBA.

@qldfrog If b*lls are the size of coconuts then .......................

 

[TimeISmoney]

Put a sell order at $9.75 today as i was on the broker site, which got executed..

3 CBA3V7 sold for $2893.98 after all costs, i wa buying these 3 on the 18/12 for a total cost of $1891.02 so $1k profit, 53% gain in less than a month, yet CBA is still at $153 a pop so not exactly smashed
I am surprised

Should probably reinvest this $1k on a similar trade with same vision.
The power..and risks... of options...
Now how big are my ... As we know, the power of passive investing is monstrous on CBA.

Are they already up for sale again at $10.20 x200 or is that another lot?

 

[qldfrog]

Are they already up for sale again at $10.20 x200 or is that another lot?

Not sure, can not see easily unless i am on the PC. Will try to keep an eye