- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Options Trading Thread
Posted on 3/7/23 at 11:22 am to LSUtoOmaha
Posted on 3/7/23 at 11:22 am to LSUtoOmaha
Short March 31 MSFT put spreads. 250/245 for 1.5 premium. This is a CML Trade Machine trade.
2
Posted on 3/7/23 at 7:14 pm to LSUtoOmaha
Opened a PMCC in F and SWN this morning. 30 and 45 DTE respectively.
I’ll BTC and sell cheaper if the overall market downtrend continues.
I’ll BTC and sell cheaper if the overall market downtrend continues.
Posted on 3/7/23 at 7:20 pm to LSUtoOmaha
quote:
Short March 31 MSFT put spreads. 250/245 for 1.5 premium. This is a CML Trade Machine trade.
I get the structure (credit is roughly a 1/3 the width of the strike spread). But do they explain why they chose such a high delta for the short put strike (almost 41 - expected move +/-15.08)? Does the CML system base the short strikes on technicals instead of deltas? Just curious.
Posted on 3/7/23 at 9:16 pm to Jag_Warrior
For this trade it's always shorting the 40 delta put. CML option plays trigger based off technicals; this setup in particular I believe is a cross above the 200 MA (I'd have to look when I'm at my computer). The reason for the high delta is because when you backtest, it provides the best average return. Shorting a 20 delta or whatever will work too, but history says you'd be leaving money on the table (for this specific setup.)
This post was edited on 3/7/23 at 9:17 pm
Posted on 3/7/23 at 10:02 pm to LSUtoOmaha
Ah, gotcha. 
Posted on 3/7/23 at 10:45 pm to Jag_Warrior
Doesn’t look like Powell & Co. are as close to being done as many suspected/hoped (if heavy in equities):
But I have to say, his speech today saved the short call side of my 3/7 SPX syn. strangle. I already had another roll loaded up… for a trade that was a roll from last week’s beat down. Thank you, Mr. P.
quote:
By the end of the session, the yield on the two-year Treasury note had settled at 5.011%. That was up from 4.892% Monday and marked its first close above 5% since June 2007.
But I have to say, his speech today saved the short call side of my 3/7 SPX syn. strangle. I already had another roll loaded up… for a trade that was a roll from last week’s beat down. Thank you, Mr. P.
Posted on 3/8/23 at 8:51 am to Jag_Warrior
Jag I just looked, the MSFT trade triggered because:
1. Cross over the 200 sma
2. Is above the 10 day ma
3. RSI is below 70
So basically it's established a longer term uptrend and is in a short term uptrend, but not grossly overbought.
Over the last 5 years, this trade has triggered for MSFT 7 times. The first 6 were all profitable for an average return on risked capital of 21.6%. This is the 7th (it's currently down btw, but we have 23 more days to go). There's no rolling or anything for these so it's very simple to pick up.
1. Cross over the 200 sma
2. Is above the 10 day ma
3. RSI is below 70
So basically it's established a longer term uptrend and is in a short term uptrend, but not grossly overbought.
Over the last 5 years, this trade has triggered for MSFT 7 times. The first 6 were all profitable for an average return on risked capital of 21.6%. This is the 7th (it's currently down btw, but we have 23 more days to go). There's no rolling or anything for these so it's very simple to pick up.
Posted on 3/8/23 at 4:01 pm to LSUtoOmaha
OK. That’s a different approach than trading by the deltas. Thanks for sharing the mechanics of the strategy. 
I was pleased that CRWD stayed within the projected range after earnings. Those short puts should expire worthless on Friday. And if I can survive through the close tomorrow, all my 1DTE SPX short syn. strangles will have printed this week. Hopefully the jobless claims number doesn’t cause an “event” in the morning.
I was pleased that CRWD stayed within the projected range after earnings. Those short puts should expire worthless on Friday. And if I can survive through the close tomorrow, all my 1DTE SPX short syn. strangles will have printed this week. Hopefully the jobless claims number doesn’t cause an “event” in the morning.
Posted on 3/8/23 at 6:55 pm to bayoubengals88
Sorry, I missed this question.
Not really time based percentage goals. It’s really more of a per trade percentage target. I do have certain minimum requirements, because a good part of my income is derived from trading options. So that might prompt me to trade more often than I otherwise would. But to your question, with these SPX short synthetic strangles, I try to stay within my max delta range on the short options (10-15), and shoot for about 3% max profit on the Buying Power Reduction/capital at risk when I “sell to open” the trade. For a 1-2 day trade, if I attain that, I’m more than satisfied - especially in low volatility environments.
With earnings trades (I typically do strangles or naked puts on the weekly series), the percentage is usually higher because of the volatility spike. With those, 10% +/- max profit on Buying Power Reduction is about what I expect.
Hope that helps.
quote:
Do you have weekly/monthly goals percentage wise?
Not really time based percentage goals. It’s really more of a per trade percentage target. I do have certain minimum requirements, because a good part of my income is derived from trading options. So that might prompt me to trade more often than I otherwise would. But to your question, with these SPX short synthetic strangles, I try to stay within my max delta range on the short options (10-15), and shoot for about 3% max profit on the Buying Power Reduction/capital at risk when I “sell to open” the trade. For a 1-2 day trade, if I attain that, I’m more than satisfied - especially in low volatility environments.
With earnings trades (I typically do strangles or naked puts on the weekly series), the percentage is usually higher because of the volatility spike. With those, 10% +/- max profit on Buying Power Reduction is about what I expect.
Hope that helps.
Posted on 3/8/23 at 7:17 pm to Jag_Warrior
Wow, looking at CRWD's range today, shorting premium for earnings definitely worked no matter what you did!
Posted on 3/8/23 at 7:51 pm to LSUtoOmaha
It broke out of its expected range last earnings announcement. So the market adjusted for that this time. That trade should yield almost 10% on the “buying power reduction” risk to put the trade on.
Posted on 3/8/23 at 7:54 pm to Jag_Warrior
Would be cool if someone did a study/backtest for options after it broke out the expected range in the previous quarter. I'm sure you're on to something there.
Posted on 3/8/23 at 8:11 pm to LSUtoOmaha
Kirk Du Plessis (Option Alpha founder) did some studies along those lines several years ago. I didn’t realize that either, until I read through his work some time ago. Hard to fool options market makers twice.
Kirk’s premium selling philosophy is very similar to TastyTrade/Tom Sosnoff’s - except Kirk tends to focus mainly on ETFs. He’s focusing on some sort of auto-trading bot system now. But you can catch his older podcasts and I think you’ll find them to be pretty interesting.
Kirk’s premium selling philosophy is very similar to TastyTrade/Tom Sosnoff’s - except Kirk tends to focus mainly on ETFs. He’s focusing on some sort of auto-trading bot system now. But you can catch his older podcasts and I think you’ll find them to be pretty interesting.
Posted on 3/8/23 at 9:18 pm to Jag_Warrior
Nice, I'll have to look at the early ones. I'm familiar with Kirk and his ETF strategy. Seems to work but ETFs are so boring with options selling that I can't bring myself to do it
This post was edited on 3/8/23 at 9:18 pm
Posted on 3/9/23 at 12:42 pm to LSUtoOmaha
I’ve come to know him just by trading some emails back & forth. He also went to UVA (years after I was there ), but that’s how we struck up a relationship. I’m not being critical of him, but you’ll notice that his focus (at least early on) was on IV rank or percentile - didn’t really have the same focus on pure IV. ETFs tend to have rather low IV, even when their IV percentile reaches a relatively high level. Sosnoff and Battista focus on IV rank/percentile too, but if the IV isn’t there, you’re really not going to make much premium on the option sale.
But with all that said, I learned a TREMENDOUS amount listening to Kirk’s early podcasts. We both use TDA/ToS and with his assistance, I was able to negotiate my commissions down to almost nothing (back when there was still a charge) and also get my portfolio margin set up. And he’s a good guy (Wahoo wah!).
), but that’s how we struck up a relationship. I’m not being critical of him, but you’ll notice that his focus (at least early on) was on IV rank or percentile - didn’t really have the same focus on pure IV. ETFs tend to have rather low IV, even when their IV percentile reaches a relatively high level. Sosnoff and Battista focus on IV rank/percentile too, but if the IV isn’t there, you’re really not going to make much premium on the option sale. But with all that said, I learned a TREMENDOUS amount listening to Kirk’s early podcasts. We both use TDA/ToS and with his assistance, I was able to negotiate my commissions down to almost nothing (back when there was still a charge) and also get my portfolio margin set up. And he’s a good guy (Wahoo wah!
).Posted on 3/9/23 at 3:05 pm to Jag_Warrior
quote:
How does your SPX IC roll look? I’m prepared for my short call side to get tested again (4090) by tomorrow’s expiration.
Getting hammered again on the 1 I rolled, and another IC I entered Monday. I rolled them again mid week when they were close to being ITM. I'm hindsight I should have closed for breakeven. As you've seen today with SPX, I'm getting off into the weeds on the put side.
I rolled the call sides down for additional credit this afternoon, but they expire tomorrow so I'm hoping for some good (bad) jobs news in the morning. I'm short the 3920 and 3950 on put side.
This post was edited on 3/9/23 at 3:35 pm
Posted on 3/9/23 at 4:52 pm to dragginass
I know the feeling. Went from safe to scary pretty quickly, didn’t it?!
I had 10 ICs with 3910 short puts expiring today. I was driving when SPX hit 3908.
I knew I’d be at my destination well before 4:00, but I was almost tempted to pull over. It worked out, but that was not fun.
Other than some earnings trades and CCs, I only have some short SPX put spreads on for tomorrow at 3795. That 18.3% pop in the VIX should help us with short sales going into next week… hopefully on your rolls too.
I had 10 ICs with 3910 short puts expiring today. I was driving when SPX hit 3908.
I knew I’d be at my destination well before 4:00, but I was almost tempted to pull over. It worked out, but that was not fun. Other than some earnings trades and CCs, I only have some short SPX put spreads on for tomorrow at 3795. That 18.3% pop in the VIX should help us with short sales going into next week… hopefully on your rolls too.
Posted on 3/9/23 at 6:49 pm to Jag_Warrior
How wide have you been buying your IC SPX wings? I've been leaving them tight at $5, with a few $10 for trial. So far I'm glad I've only gotten plowed on the $5 wide variety. I have been targeting .10 delta on the short sides, which has meant max profit of about $100 per IC as of late.
This post was edited on 3/9/23 at 6:52 pm
Posted on 3/9/23 at 8:32 pm to dragginass
My 1-2DTE trades are synthetic strangles, with very wide wings: typically 60-80 points. They offer no real protection, simply there to lessen the buying power reduction. I also do sell longer dated SPX IC contracts with tighter spreads (true ICs) - usually 10-15 wide spreads and open at 10-15 delta.
Last week was fairly ugly (well, just Friday). I could hear the song Wipe Out playing in my head.
Last week was fairly ugly (well, just Friday). I could hear the song Wipe Out playing in my head.
Posted on 3/10/23 at 6:32 am to Jag_Warrior
May look at some VXX puts near open. It's very profitable to buy 50 deltas a month out after a 7% + day (over the long run, of course).
Page 20 of 77
Popular
Back to top
Follow TigerDroppings for LSU Football News