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re: Options Trading Thread
Posted on 3/30/23 at 7:22 pm to bayoubengals88
Posted on 3/30/23 at 7:22 pm to bayoubengals88
quote:
He's been really emphasizing this IWM/QQQ ratio trade for a couple of weeks. I don't quite understand it. Perhaps you know what he's talking about...
Sorry. Can’t say that I’m familiar with that. I sometimes do ratios, but not in a pairing strategy.
2
Posted on 3/30/23 at 8:47 pm to Jag_Warrior
Something like sell 1 /mnq future and buy 2 /m2k futures would be my guess. The ratio would be to balance the trade out since they have different notional sizes. You can adjust the ratio to give more leverage on 1 side or the other to fit your bias. For less leverage you could do a similar thing with qqq and spy shares.
Eta: pairs trades are can be very good but don't work that well with options, IMO.
Eta: pairs trades are can be very good but don't work that well with options, IMO.
This post was edited on 3/30/23 at 8:49 pm
Posted on 4/2/23 at 8:14 pm to slacker00
Anyone else buying McDonald puts tmrw?
Posted on 4/3/23 at 8:03 pm to LSUAngelHere1
quote:
Anyone else buying McDonald puts tmrw?
Why April 3 for going long puts on MCD? Was there some sort of news scheduled for today?
Earnings are slated for April 25 before the open. What expiration and strike are you targeting and why? Seems the play (for me, if I were to put it in play… long or short) would be the Apr 28 weekly series. Just curious.
Posted on 4/3/23 at 8:49 pm to LSUAngelHere1
MCD is not a stock I'd be short right now.
Posted on 4/5/23 at 5:20 pm to LSUtoOmaha
Monday and Tuesday were very good days for the SPX ICs. I couldn’t get a fill late in the session today, and didn’t want to chase a trade. So I went with short SPX ICs 4015p/4135c for 4/6 expiration.
For tomorrow’s expiration, I also have a few short puts on MO and SCHW (would like to add shares in both), and a short put on TSLA at 177.50 as a wheel strategy play (if it hits). Other than that, just waiting on Christmas… I mean, earnings season.
For tomorrow’s expiration, I also have a few short puts on MO and SCHW (would like to add shares in both), and a short put on TSLA at 177.50 as a wheel strategy play (if it hits). Other than that, just waiting on Christmas… I mean, earnings season.
Posted on 4/5/23 at 9:47 pm to Jag_Warrior
I bought QQQ april 315 calls today, added to my AMZN 100 calls today, and added to my spy 405 april calls today. We are still in an uptrend and all came back close to the 8 EMA. Good opportunity to add. Needed a pull back. A couple closes under the 8 EMA i will close out but I am optimistic we rally through end of this month, maybe mid may. Roll out and up if trend continues. Happy trading
Posted on 4/6/23 at 5:52 pm to thatguy777
Do you do anything with SPX (or SPY) options?
Posted on 4/6/23 at 10:46 pm to Jag_Warrior
I trade spy options all the time, usually for swing trades. 20-40 dte usually atm when I think a trend is taking place. I’ll trade around the position throughout the period depending if I think it gets extended. Sometimes sell calls against the buys or just straight close out, or a mixture.
SPX I mainly do butterfly’s if I think we have gone too far in one direction and play the other side. Like 1 dte haha.
A lot of factors go into these decisions. I look at breadth, technicals, and flow among other things. There are key indicators I look for to try to keep things simple. Like right now I feel we are in an uptrend and will buy dips until the trend changes. Seasonality is positive as well
SPX I mainly do butterfly’s if I think we have gone too far in one direction and play the other side. Like 1 dte haha.
A lot of factors go into these decisions. I look at breadth, technicals, and flow among other things. There are key indicators I look for to try to keep things simple. Like right now I feel we are in an uptrend and will buy dips until the trend changes. Seasonality is positive as well
Posted on 4/9/23 at 5:30 pm to thatguy777
quote:
SPX I mainly do butterfly’s if I think we have gone too far in one direction and play the other side. Like 1 dte haha.
Sosnoff’s studies are showing some wild profit potential on the 0-1DTE SPX long option plays. With the recent low vol, I believe he’s also gone long on butterflies over the past few weeks.
If IV stays low, it makes perfect sense to be net long and even do some directional plays.
Posted on 4/9/23 at 5:36 pm to Jag_Warrior
Once I leave my employer this year and only trade full time, my CPA tells me that my tax life will be changing quite dramatically. Not sure where everybody else is with their tax situation regarding options or day trading. But here's a link that may help you now or in the future. 
Topic No. 429, Traders in Securities (Information for Form 1040 or 1040-SR Filers)
Topic No. 429, Traders in Securities (Information for Form 1040 or 1040-SR Filers)
Posted on 4/10/23 at 9:34 pm to Jag_Warrior
Thanks for the link. I will check it out. I added to my AMZN april 100 calls today and added to my QQQ 315 april calls today. Feel like a huge ripper is coming soon. All of these positions I have been accumulating over the last week or two have bounced right on the 8 day EMA and breadth still showing strong signs. We shall see. My bags are packed, ready for the ride
Posted on 4/11/23 at 4:35 pm to Jag_Warrior
I've eased out of the 0-1 DTE SPX trades over the last week. IV even lower and the juice isn't worth the squeeze for my nerves. Back to doing more generic 15-30 DTE iron condors across multiple ETF's. I sleep better.
Twice this year I had my account up 20%, and both times I lost (most) of the gains on SPX 0-1 DTE plays. Maybe it was greed, maybe it was just some bad sequencing.
Twice this year I had my account up 20%, and both times I lost (most) of the gains on SPX 0-1 DTE plays. Maybe it was greed, maybe it was just some bad sequencing.
Posted on 4/11/23 at 6:05 pm to thatguy777
quote:
Feel like a huge ripper is coming soon.
I agree. The battle line seems to be drawn right around S&P 4100. With the VIX so low now, a major move one way or the other seems on the horizon.
Posted on 4/11/23 at 6:22 pm to dragginass
quote:
I've eased out of the 0-1 DTE SPX trades over the last week. IV even lower and the juice isn't worth the squeeze for my nerves. Back to doing more generic 15-30 DTE iron condors across multiple ETF's. I sleep better.
In addition to my normal 45+/- DTE SPX trades and earnings plays, I’ve been selling larger lots of “junk” 0-1DTE syn. strangles on SPX. Only because my buying power gets recycled quickly is this a worthwhile strategy. I usually get in between 12:30-1ET and leg into each side as I follow the momentum. Usually target 5-6 delta on the short options and whatever long options I can pick up for a nickel or so… and still content with the 1-2% daily returns. I’ve come very close to getting slapped a couple of times (and I know my day of reckoning has to come), but so far haven’t had a losing SPX trade since the first week of March.
But yeah, I understand where you’re coming from. Sequence of returns catches us all at some point, and these 0-1DTE options really are hand grenades. Picking a safe place to stand is definitely not easy and it’s definitely stressful. Better luck on the longer dated trades.
Posted on 4/11/23 at 6:40 pm to Jag_Warrior
One of the things that my accountant and I have been and will discuss more in our next planning session, per the IRS site for designated “traders in securities”:
OK. That’s nice.
I also need for us to get a better handle on the mark to market rules:
We know that I’ll be considered a “trader in securities” (certainly not a dealer), but whew!
quote:
Gains and losses from selling securities from being a trader aren't subject to self-employment tax.
OK. That’s nice.
I also need for us to get a better handle on the mark to market rules:
quote:
Traders can choose to use the mark-to-market rules, investors can't. If the nature of your trading activities doesn't qualify as a business, you're considered an investor and not a trader. It doesn't matter whether you call yourself a trader or a day trader, you're an investor.
We know that I’ll be considered a “trader in securities” (certainly not a dealer), but whew!
Posted on 4/11/23 at 8:33 pm to Jag_Warrior
Jag, one thing I've noticed anecdotally from looking through hundreds of Trade Machine backtests, is that even when long call/put trades are triggered based on moving averages for the 40 delta strikes, the 20 and 10 delta strikes on the same setup often end up having a negative return. In other words, even with the BEST long setups, the lower double digit deltas still fail more often that not. Lends credence to your short strategies
This post was edited on 4/11/23 at 8:35 pm
Posted on 4/11/23 at 10:04 pm to LSUtoOmaha
Props to you for paying attention to backtesting results. I need to run one specifically on this 0-1DTE strategy.
This low IV environment is unattractive to me, and anyone primarily focused on short premium strategies. Kind of like an old cat who knows there’s a big Doberman somewhere in the yard, it forces me to take more steps… but stay real close to that hole in the fence. I’m sure that Sosnoff & Co. will never put me on Rising Stars for what I’m doing. But the “safe” 1-2% per day returns on “buying power reduction” are OK with me until the vol picks up again, and I can sell higher deltas without worrying so much about an unexpected “event” crushing me.
I need to run one specifically on this 0-1DTE strategy. This low IV environment is unattractive to me, and anyone primarily focused on short premium strategies. Kind of like an old cat who knows there’s a big Doberman somewhere in the yard, it forces me to take more steps… but stay real close to that hole in the fence.
I’m sure that Sosnoff & Co. will never put me on Rising Stars for what I’m doing. But the “safe” 1-2% per day returns on “buying power reduction” are OK with me until the vol picks up again, and I can sell higher deltas without worrying so much about an unexpected “event” crushing me.Posted on 4/12/23 at 8:26 am to Jag_Warrior
If you find a backtest for the 0-1 DTEs, let me know!
Posted on 4/12/23 at 1:01 pm to LSUtoOmaha
I have backt3sting capability through OA, but I can't test 0-1 DTE unfortunately.
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