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re: Options Trading Thread
Posted on 2/28/23 at 9:03 am to Jag_Warrior
Posted on 2/28/23 at 9:03 am to Jag_Warrior
Jag when you got assigned ADSK, what covered calls did you go with? I'm curious if you try to structure it to break even overall on the trade.
Side note: Looking at AXON, which has earnings tonight. The spreads are a bit wide but you could probably collect $2 for next month's strikes at low double digit deltas.
Side note: Looking at AXON, which has earnings tonight. The spreads are a bit wide but you could probably collect $2 for next month's strikes at low double digit deltas.
3
Posted on 2/28/23 at 10:58 am to LSUtoOmaha
For anyone:
If I bought QQQ puts and hedged with TQQQ calls, is there a name for that?
If I bought QQQ puts and hedged with TQQQ calls, is there a name for that?
Posted on 2/28/23 at 3:30 pm to LSUcam7
quote:
MSFT/ATVI deal
Long Aug 18 $80 calls.
Current ask is $6.45.
Added here. Average cost on my calls $6.03.
If MSFT can appease the regulators.. these calls will 2.5x
Posted on 2/28/23 at 8:27 pm to LSUcam7
Ask down to 5.70
When would the deal go through?
When would the deal go through?
Posted on 2/28/23 at 8:55 pm to LSUtoOmaha
quote:
Jag when you got assigned ADSK, what covered calls did you go with? I'm curious if you try to structure it to break even overall on the trade.
Typically that’s what I do, since it was never in the plan to take shares. The profit comes from the covered calls.
ETA: Actually the potential profit (if called away at the strike where it was assigned to me) comes from both the covered call premium and the original short put premium.
This post was edited on 3/1/23 at 12:39 pm
Posted on 2/28/23 at 9:04 pm to LSUcam7
quote:
Added here. Average cost on my calls $6.03.
If MSFT can appease the regulators.. these calls will 2.5x
Just throwing this out there. Use it or don't.
ATVI Aug 80/90/95 butterfly.
Run it on the profit calculator.
Options Calculator
This post was edited on 2/28/23 at 9:09 pm
Posted on 2/28/23 at 9:13 pm to bayoubengals88
quote:
If I bought QQQ puts and hedged with TQQQ calls, is there a name for that?
Just so I understand, you want to buy puts on QQQ and buy calls on the leveraged TQQQ? If I got that right, depending on where you set your strikes and expiration dates, you’d be buying a sort of strangle or straddle… but because one underlying is leveraged and the other isn’t, although correlated, those are two different underlyings. And they have VERY different implied volatilities and IV ranks. So in reality, you’d really just be buying separate calls and puts on different underlyings.
It’s certainly an interesting concept, but I’ve never really thought about it before. So… take my answer with a grain of salt.
Sorry I couldn’t help. Someone else may have a better answer. Posted on 2/28/23 at 9:25 pm to Jag_Warrior
No worries! Thanks for taking a stab at it.
By the end of the day everything worked itself out just fine.
What’s THE book on options again?
By the end of the day everything worked itself out just fine.
What’s THE book on options again?
Posted on 2/28/23 at 10:50 pm to bayoubengals88
There are so many books about options trading. Depending on the styles or strategies that you’re focusing on, some will be more helpful (if not entertaining) than others.
For premium sellers like myself, Julia Spina’s The Unlucky Investor's Guide to Options Trading is good and interesting. A more serious read, if you’re focusing on trading as a career or business, is Dennis Chen’s The Option Trader's Hedge Fund: A Business Framework for Trading Equity and Index Options.
Those are just a couple that I lean toward. I’m sure others here will have some suggestions or preferences too.
For premium sellers like myself, Julia Spina’s The Unlucky Investor's Guide to Options Trading is good and interesting. A more serious read, if you’re focusing on trading as a career or business, is Dennis Chen’s The Option Trader's Hedge Fund: A Business Framework for Trading Equity and Index Options.
Those are just a couple that I lean toward. I’m sure others here will have some suggestions or preferences too.
Posted on 3/1/23 at 12:51 pm to Jag_Warrior
Went heavy on 1DTE SPX short syn. strangles a few minutes ago. While I’ve mostly avoided the 0DTE trades for time management reasons, the low delta 1-2DTE short syn. strangles have been extremely lucrative thus far.
TastyTrade (Sosnoff and Battista) are now doing studies on this short dated index options trading phenomenon - both long and short sides. The first videos are available on the site and YouTube now, if anyone is interested.
BTW, just learned that it was Sosnoff’s Think or Swim/TastyTrade team that first coined the terms “1DTE” and “0DTE” way back before they became a thing.
TastyTrade (Sosnoff and Battista) are now doing studies on this short dated index options trading phenomenon - both long and short sides. The first videos are available on the site and YouTube now, if anyone is interested.
BTW, just learned that it was Sosnoff’s Think or Swim/TastyTrade team that first coined the terms “1DTE” and “0DTE” way back before they became a thing.
Posted on 3/1/23 at 7:54 pm to Jag_Warrior
Do you roll the 1 DTEs if one of the legs goes itm?
Posted on 3/1/23 at 8:13 pm to Jag_Warrior
quote:
TastyTrade (Sosnoff and Battista)
Never heard of these guys. Thanks!
Posted on 3/1/23 at 8:14 pm to LSUtoOmaha
Yep. First I roll the untested side down for more credit and then I have to either close or roll the tested side down (strike) and out (expiration). With cash settlement on index options, letting them get away from you can be painful.
Posted on 3/1/23 at 8:18 pm to bayoubengals88
No problem. 
Sosnoff is the man behind the original Think or Swim and a former floor trader on the CBOE. Battista, also a former floor trader, is his partner in crime at TastyTrade. Really sharp, experienced and entertaining duo.
Sosnoff is the man behind the original Think or Swim and a former floor trader on the CBOE. Battista, also a former floor trader, is his partner in crime at TastyTrade. Really sharp, experienced and entertaining duo.
This post was edited on 3/1/23 at 8:18 pm
Posted on 3/1/23 at 9:41 pm to Jag_Warrior
Oh wow. He’s wealthy then…
I’m beginning to realize now that real options traders go with probabilities, almost guarantees. It seems that selling premium is most of what makes consistent money.
Do you ever trade long puts/calls?
They make it seem like it’s too risky.
I’m beginning to realize now that real options traders go with probabilities, almost guarantees. It seems that selling premium is most of what makes consistent money.
Do you ever trade long puts/calls?
They make it seem like it’s too risky.
Posted on 3/1/23 at 10:24 pm to bayoubengals88
Yep, quite wealthy. Purely guessing, but I’d say he’s worth a few hundred million at least. I don’t *think* that he’s a billionaire yet, but I’m not sure. He and his partners sold Think or Swim to TD Ameritrade for $600 million several years ago, and they sold his new creation, TastyTrade, to IG Group for a billion dollars about two years ago.
Posted on 3/1/23 at 10:39 pm to bayoubengals88
quote:
I’m beginning to realize now that real options traders go with probabilities, almost guarantees. It seems that selling premium is most of what makes consistent money.
thatguy777 has had some real success buying calls, puts and spreads. Even if he loses on many trades, if he manages to hit a few home runs, he can be profitable overall. He seems quite good at using technical analysis to place his directional bets. One 400% winner can overshadow 2 or 3 100% losers.
But yes, the most consistent money (I trade for income) comes from selling premium on higher probability trades in high IV environments. I generally try to stay fairly delta neutral and rely on theta (time) decay and having many occurrences at a high probability of profit.
quote:
Do you ever trade long puts/calls? They make it seem like it’s too risky.
Not really. In low IV environments, buying premium, or being net long options, can put the probabilities more in my favor. There are situations where I could sell premium (be short) and use that to pay for a long options position. I’d be more likely to look at something where my “probability of profit” (POP) would be quite high. But it’s still something I probably wouldn’t do with more that 3-5% of my trading account or devote much time to. It’s just not in my wheelhouse of knowledge.
Posted on 3/2/23 at 11:02 am to Jag_Warrior
quote:
There are situations where I could sell premium (be short) and use that to pay for a long options position.
Ok, If you can, be brutally honest about my trade.
First time selling a put...
I sold three $8 puts on AUPH because I don't mind buying that stock at $8.
I received $66 of premium so my breakeven is actually 7.78
So is this the name of the game? Hope it actually doesn't go to $8 while collecting $66 on $2,400 collateral?
Is that what you would call a 2.75% gain?
$66 made in 2 weeks time isn't great.
Is the idea that you would keep doing this for better income?
Also, shouldn't I aim to get as much premium on the bid as possible? I think I could have done better there.
Posted on 3/2/23 at 2:02 pm to bayoubengals88
quote:
selling premium is most of what makes consistent money.
75% of options expire worthless.
However, you can get bent over IF you are wrong.
I sell puts married to cash of stocks I want to buy at that strike.
I sell calls at a price I would put a limit order into the system for that position.
It’s not very sexy, but it’s made me some money over the years .
Posted on 3/2/23 at 2:47 pm to bayoubengals88
For anyone willing to help:
AUPH has gone up since I sold the puts so the price of the option is now hovering around .12 rather than the .22 x 3 that I collected earlier.
Could I simply close my position, thus getting back my collateral and still keeping some premium?
Or, would it be wiser to roll out to 21 April to collect a greater premium?
Bare with me, I'm learnin'!
AUPH has gone up since I sold the puts so the price of the option is now hovering around .12 rather than the .22 x 3 that I collected earlier.
Could I simply close my position, thus getting back my collateral and still keeping some premium?
Or, would it be wiser to roll out to 21 April to collect a greater premium?
Bare with me, I'm learnin'!
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