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re: Options Trading Thread
Posted on 3/2/23 at 4:08 pm to bayoubengals88
Posted on 3/2/23 at 4:08 pm to bayoubengals88
quote:
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.
Yes you can just close it.
You STO(sell to open) @ $0.22 when you sold your puts.
You will now BTC(buy to close) @ $0.12. This will close out your position. You will have captured a $0.10 gain.
This post was edited on 3/2/23 at 4:11 pm
0
Posted on 3/2/23 at 4:33 pm to bayoubengals88
quote:
Bare with me, I'm learnin'!
Glad you’re already in the green on your first short option trade. As you move up the learning curve (it takes time - just have patience), it’ll get easier and easier.
Word of advice: try to be as “mechanical” as possible. Run the most probable scenarios through your mind (or write them down) and have a plan for what you’d do in each scenario. In other words, plan your moves/reactions in advance of the underlying doing this or that.
Very best of luck.
Posted on 3/2/23 at 5:51 pm to bayoubengals88
quote:
Also, shouldn't I aim to get as much premium on the bid as possible? I think I could have done better there.
Question just came to mind. What platform or brokerage are you using?
You may already know, but you should almost never use market orders when selling or buying options… or stocks for that matter. Depending on the platform, you should see the bid, ask and midpoint price. Whatever price point you’re shooting for, base it on that midpoint price. When it hits that, that should be where you get filled.
Posted on 3/2/23 at 6:43 pm to Jag_Warrior
I’m using Robinhood for options.
The platform is very user friendly.
MUCH better than my Vanguard Roth.
The platform is very user friendly.
MUCH better than my Vanguard Roth.
Posted on 3/2/23 at 8:21 pm to bayoubengals88
OK. Sorry, but I’ve never seen the Robinhood interface. So I’m not sure what it shows you as far as midpoint pricing and such.
Posted on 3/3/23 at 7:49 pm to Jag_Warrior
quote:Do you have weekly/monthly goals percentage wise?
Jag_Warrior
Posted on 3/3/23 at 9:57 pm to Jag_Warrior
Oof, today was rough. I had 3 SPX IC's open, and 2 of the 3 got blown through today. 1 I was able to roll to next week, the other got hammered so hard I couldn't reasonably roll it, so I ate that one. Still been a good YTD, but days like today are humbling.
Posted on 3/4/23 at 11:22 am to dragginass
For anyone:
Sell calls on good days,
Sell puts on bad days?
Wouldn’t the buyer have to pay more in this scenario? Then if a reversal happens buy them back for a discount and pocket the difference?
Do I have that right?
Sell calls on good days,
Sell puts on bad days?
Wouldn’t the buyer have to pay more in this scenario? Then if a reversal happens buy them back for a discount and pocket the difference?
Do I have that right?
This post was edited on 3/4/23 at 11:23 am
Posted on 3/4/23 at 12:38 pm to dragginass
quote:
Oof, today was rough.
You can say that twice. Typically I avoid Friday expirations for SPX (usually do equity trades only). So when I don’t follow my own good advice, I accept the price I have to pay.
But in the face of rising interest rates, I DID NOT see two consecutive up days - certainly not face rips. And… I was wrong! quote:
I had 3 SPX IC's open, and 2 of the 3 got blown through today. 1 I was able to roll to next week, the other got hammered so hard I couldn't reasonably roll it, so I ate that one. Still been a good YTD, but days like today are humbling.
I feel for you. I had 6 syn. strangles on SPX. The short call sides (at 4020) got destroyed in short order. I rolled the put sides up. The call sides I wasn’t able to roll for enough to get a net credit without the deltas being insane - Tuesday expiration. But as long as these play out, the pain from Friday will be greatly lessened.
Everything else played out nicely this week. And the ADSK stock finally got called away. Glad to see it go. And got decent credit for some 3/10 TSLA 210 covered calls.
Yeah, I know it happens, but can’t have another repeat of a week like that!
Posted on 3/4/23 at 12:44 pm to bayoubengals88
quote:
For anyone:
Sell calls on good days,
Sell puts on bad days?
Wouldn’t the buyer have to pay more in this scenario? Then if a reversal happens buy them back for a discount and pocket the difference?
Do I have that right?
As long as the good day isn’t followed by an even better day(s). See my post above.
Calling a top or bottom isn’t always so easy if you’re skewed directionally. But yes, your thinking is right.
Posted on 3/4/23 at 1:59 pm to bayoubengals88
quote:
bayoubengals88
Your best learning will come from the experience of making decisions that result in trades, then the profit and losses that come from them.
Everything else is theory. You can get some good ideas and strategies but “everything works and nothing works.”
Posted on 3/4/23 at 2:46 pm to LSUcam7
Thanks. I think I’ll start with Ford and continue reading r/thetagang for now (and this thread of course).
I like Ford because I can afford it
I like Ford because I can afford it
This post was edited on 3/4/23 at 3:08 pm
Posted on 3/5/23 at 8:06 am to bayoubengals88
quote:
r/thetagang for now
I’ll check that out thx for sharing. I’m no options expert either. My trades are generally small in size & only on the long side as I don’t feel comfortable getting assigned yet.
Generally small in size… but I’m long a fair amount of calls playing the MSFT/ATVI buyout combined with the common shares I own.
This post was edited on 3/5/23 at 8:17 am
Posted on 3/5/23 at 4:40 pm to LSUcam7
quote:It's a fun little group
I’ll check that out thx for sharing.
Would anyone mind telling me what to look for on this hypothetical Poor Man's Covered Call?
SAVE (Spirit Airlines) Share price $17.93
Go long on a $10 July 2024 Call for ~9 bucks ($900).
Sell call on 17 March $20 strike for .25 premium ($25)
What's the best way to profit from such a trade?
Posted on 3/5/23 at 5:59 pm to bayoubengals88
quote:
Go long on a $10 July 2024 Call for ~9 bucks ($900).
Sell call on 17 March $20 strike for .25 premium ($25)
What's the best way to profit from such a trade?
Your long call should have a delta of 70 to 80. A $9.00 call is a lot of money. It will tie up a lot of your funds.
I usually go 6 months to a year on expiration, but lately due to the market I have been going more than a year. This depends on where you think the market is going.
To give an example your trade with a long call delta of around 75.
Buy to open SAVE Sept 15 call @ $4.25 then
Sell to open SAVE April 20 call @ $0.60
If SAVE is still in the $18 to $19 range at April expiry your short call will expire worthless. Then you just repeat with the May 20 call. Then the June 20 call. etc.
What you are doing.
You are "chipping away" at the cost of your $4.25 long call by selling short calls monthly.
While at the same time you are waiting for SAVE to go north of $20. Once that happens you either cash out or roll.
This post was edited on 3/5/23 at 6:02 pm
Posted on 3/5/23 at 6:47 pm to frogtown
Thanks for your expertise.
With the $9 leap I was just thinking I’d err on the side of caution. Perhaps I’ll meet in the middle and go with Jan 2024.
I guess I would need a plan for if SAVE crashed to $15 or lower thus severely reducing the value of my long call.
Same strategy? Chip away by selling covered calls at lower strikes?
With the $9 leap I was just thinking I’d err on the side of caution. Perhaps I’ll meet in the middle and go with Jan 2024.
I guess I would need a plan for if SAVE crashed to $15 or lower thus severely reducing the value of my long call.
Same strategy? Chip away by selling covered calls at lower strikes?
This post was edited on 3/5/23 at 7:17 pm
Posted on 3/5/23 at 7:41 pm to bayoubengals88
quote:
I guess I would need a plan for if SAVE crashed to $15 or lower thus severely reducing the value of my long call.
Same strategy? Chip away by selling covered calls at lower strikes?
Yes. If SAVE dropped to $15 you would start selling your short calls at $17.50 instead of $20. Continue to chip away.
Posted on 3/5/23 at 7:51 pm to bayoubengals88
Another point. I do not do these trades on high IV tech stocks or biotech. Those type stocks can get cut in half in a month or two. You can lose your shirt.
Look for value plays. I have these long diagonal/PMCC on CLF, VALE, UAA, SWN right now.
SAVE looks pretty good.
Look for value plays. I have these long diagonal/PMCC on CLF, VALE, UAA, SWN right now.
SAVE looks pretty good.
Posted on 3/5/23 at 8:00 pm to frogtown
quote:
Look for value plays. I have these long diagonal/PMCC on CLF, VALE, UAA, SWN right now.
Posted on 3/6/23 at 10:57 pm to dragginass
quote:
1 I was able to roll to next week
How does your SPX IC roll look? I’m prepared for my short call side to get tested again (4090) by tomorrow’s expiration.
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