Dan Sheridan

Dan Sheridan

Dan Sheridan is a 22-year CBOE veteran who worked with the highly successful specialist firm Mercury trading, which was headed up by Jon and Pete Najarian. While at Mercury Trading, Dan was responsible for training most of the traders including Pete Najarian, one of the current hosts of CNBC's Fast Money. Dan has been teaching individual traders on the techniques and methods he used every day to consistently profit in the options markets since 2004. Dan hosts the weekly CBOE TV show "Options Safari" at CBOE.com and does educational webinars for the CBOE and many brokers. The CBOE has sponsored live seminars with Dan for the last 5-years.

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AAPL Trade Idea

Oh, how I miss the expensive Apple (AAPL, $91.90, up $0.62) stock price before the split, let me name the ways: More premium for credit spreads, less commissions because I didn’t have to do as many contracts with a $500 stock price. Any positive things about the split? Yes, liquidity, which was great before the […]

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What To Do in TSLA?

The stock looks poised for a fall but what if it jacks up again? Seems too risky to play! The dilemma is how to directionally play high priced stocks without getting your face ripped off. My favorite speculative strategy is the directional Butterfly trade. Trade: TSLA is around $246 (we got this from Dan at […]

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VXX Iron Condor Based on 2013 Price Action

As we are entering what can be a volatile time of year I decided to ask Russell Rhoads over at the Options Institute what VXX may do if VIX spikes up in September or October.  Russell, being the market historian he is, pointed out that standard October expiration is 26 trading days out.   In 2013 […]

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Calendars with no Volatility Risk!

Outlandish title? Is it possible? Decreasing Option Volatility, called Implied Volatility, can be a real pain to a Calendar Trader. In 2012 and most of 2013, the market has trended up and Option Volatility was mostly decreasing. This caused Calendar Traders on the upside much discomfort. I am going to show you how to enter […]

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Are Retail Traders too Directional?

When I was in the pit, we had a saying, ‘Trade the trade and not the Market”. What does that mean? Once you have a trade on you like, have a good plan, where you will take profits, how much you will lose, where you might adjust, etc. Using a phrase from Alcoholics Anonymous, “ […]

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VIX Back to 12.50 Area, What To Do??

Two weeks ago on February 25th, VIX closed over 19. The market then recovered from the brief sell off, and the VIX dropped back to the current low level of 12.59. I didn’t think we would be back to the 12.50 area for VIX in less than 2 weeks, after almost hitting 20. Bottom line, […]

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FACEBOOK Trade Idea

Over the last 6 months FB has been a favorite of mine, in which to sell cash secured puts. Why? The stock has been going up and option premiums have been high. Is that a great combination for cash secured puts? You bet your britches!  Recently, the stock has backed off since earnings and premium […]

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Stealth Bomber Trade in GOOG

My idea involves a very clandestine effort, preferably in the dark of the night.  GOOG ($735.50, off $2.60) earnings is Tuesday January 22, four days after January expiration. The option volatility is very high now for options that expire after January expiration?  Why?  Because all option expirations after the January 18 expiration, will experience the […]

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What to do in AAPL??

The last 2 months in AAPL have brought about a 24% decline in the stock from $700 to $530 and a 60% increase in the implied volatility levels from 23 to 36. I forgot to mention the stock is still up about 30% for the year, not bad! One more bit of information, January earnings […]

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Can I Still Play the Upside in AAPL?

  AAPL is up almost 7% today, up $36+, trading near $563. You might say, “Dan I missed this move”!” “Dan, I even told my neighbor at the mailbox we would start going up in AAPL”! The stock was down 25% or $170 in about 2 months! Should a rebound be a shocker? No, but […]

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How to trade a high priced vehicle cheaply

Is there a cheap way to trade a high priced vehicle like SPX, currently trading around $1380? Yes, Butterflies. Suppose I think SPX can have an up day or two after declining 77 points since October 18. Then this would be a good cheap strategy that could allow me to participate in a high priced […]

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Will Facebook ($FB ~$19.80) Get Faced in Earnings?

October 23rd is Facebook’s expected earnings release. Does this start a death march to $10. FB showed some life in September when it broke $23. Today, near $20, it looks like it’s treading water. What is a man to do? Last earnings July 27th, the stock dropped 11% from $27 to $24. Option Volatilities are […]

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What to do in AAPL??

Very confusing and potentially volatile scenario over the next 2 weeks in AAPL ($628.10). IPAD is rumored to be announced next Wednesday October 17. Quarterly earnings are expected to be released the following Tuesday, October 23. As my buddy Leo Andrade says, “Normally AAPL runs up into product announcements then backs off (buy the rumor […]

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Trade Idea in Zillow ( Z)

Zillow (Z) closed Tuesday at $41.45. The stock  has been a darling stock since it went public in 2011. The last week it has been a stock folks are avoiding like the plague. Citron Research issued a critical report questioning its meteoric stock rise and future business prospects. Interestingly, Citron is a short seller’s research […]

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VIX under 14, it won’t last!!

Everybody is John Wayne when VIX is under 14, including me. It’s a no-brainer to bet on the VIX rising some when it’s at these paltry levels. Not to mention 5 year lows. It takes a brave, brave man to forcast the VIX will rise when it’s under 14 ( just joking). I will take […]

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Weekly’s Trade Idea in PCLN

Priceline dropped $117 on earnings August 8. Since then, it has been behaving and more range bound between 560 and 600. I am looking at a weekly strategy with a great risk reward to play this more range bound market in PCLN. Here is a trade idea one of my students, Fletcher, has been doing […]

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ISRG Earnings Trade Idea

(editors note: Dan sent this to us last night) Background and Homework: ISRG reports earnings after the close of trading tomorrow Thursday July 19. Average move on earnings last 4 quarters is about 6% . Last earnings April 17 ( after market close) , stock went up 7% from $545 to $584. January 19, 2012 […]

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Pre-Earnings Calendar Idea in AAPL

A Calendar strategy can be employed in many vehicles, we will use AAPL as an example today. AAPL is at $604 as I write this, and although it may move a little higher or lower in the next few weeks, I think it will not move far from $604. Here is my idea. Buy 1 […]

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Holiday Approaching, Free Time Decay Next Week?

Question: Holiday or weekend is coming, should I sell options before the weekend or holiday to get the decay? Quick answer is to sell options when it’s part of your plan or strategy . Could any international events happen over the weekend that could derail your ingenious plan?   Question: Why are Market Makers so […]

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Why is AAPL Becoming Dangerous, and What To Do?

(Editors note: Dan sent this to us Monday afternoon, Presidents Day) The American past time used to be baseball. But the last couple years that has changed. The new American past time has become get long AAPL any way you can and wait for the profits to accumulate. Over the last 2 years, AAPL has […]

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Three Trade Ideas for the Complete Options Portfolio

I like to separate the Option Trading Business into three buckets. Bucket #1  Long Term Monthly Income: These are moderately bullish trades like covered writes that you put on in good stocks that you like for the next year or two. Bucket  #2 Monthly Income Non-Directional – These are trades like calendar, butterflies, and Iron […]

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Do you know your Greeks?

(One of the nice things about having several blog contributors is you don’t know what the next entry will be. Dan wants you to take a self-quiz, with the answers explained next week. You may find a few of these questions difficult, but Dan isn’t a tough grader! Enjoy)! Do you know your Greeks?  Today […]

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NETFLIX: A Few (bullish) Trade Ideas

Netflix has surely paid for their price increases and especially how they communicated those price increases to the public. The public and investors responded by trashing the stock price. From around the middle of July to today, the stock has fallen from around $300 to the current level of $129. Buyers haven’t jumped in much […]

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Story from the Pits ( Cool Hand Luke)

I miss the Pits! It was a world unto itself. In many ways, it was an extension of High School, maybe that’s what I liked about it. My time spent there (I promise it wasn’t prison) was from 1982-2004. I forget the exact years, but for a 2-3 year period in the 90’s, I was […]

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Lessons from GOOG Earnings

GOOG was up an amazing $68.68 to $597.62 last Friday! 13% in 1 day. Call buyers, straddle buyers, call vertical buyers , and put vertical sellers were richly rewarded. Put buyers, straddle sellers, call vertical sellers, and calendar traders were destroyed. There was no time to adjust or get out of the way. Like the […]

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The Lure of Weeklies (1 strategy and 4 tips)

What’s the fascination of Weeklies? Why is this the hottest thing in the options market? Buyers of weeklies use it as a hedge against their portfolios or individual strategies. They also like the fact that they can hit a home run if the price moves quickly in their favor. Sellers of options like the fast […]

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Profit Expectations as a Retail Trader ( part 1)

How much money can I expect to make? What monthly yield is reasonable? These are questions I’m asked weekly by prospects and retail option traders alike. Before I address this, allow me to have a brief Kung Fu moment. In the TV series Kung Fu, before David Carradine would start a fight in a small […]

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Most Important Option Relationship: Delta/Gamma

In the late 80’s, my morning train ritual was pretty much the same. First half of the ride, sports section and coffee. The second half of the ride involved a crucial phone call that would be a big determinant of my happiness for the day. It was the call to my clerk on the trading floor […]

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Trade Idea for Today: Ratio Calendar

VIX is around 16.5 today, plummeting down from the 30 level 2 ½ weeks ago! At these VIX levels today, I am more comfortable with the risk reward? Could the VIX go a little lower? Of course! Do I think there is more risk to the upside? You betcha! I’m looking at a conventional calendar […]

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How I Find Good Monthly Income Vehicles

Many people spend lots of time researching for vehicles to trade. I like my students spending most of their time practicing and perfecting the various income strategies. Here is a simple 3 step process I sometimes use to find good candidates for monthly income trades like calendar spreads, credit spreads, butterflies, condors and covered writes. […]