re: Options Trading Thread

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I was looking at Barchart as a screener.

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Ah, OK. Sorry I’m not familiar with it. For screening for long option positions, try asking Thatguy777 when he’s back. I know that he bases many/most of his long trades on the technicals and he’s well versed.

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How did you determine your strike price on that SPX trade? Was it a large trade? If you care to answer…

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The entry was based on a delta of about 7 when I entered it. The issue with these 0DTE trades is the gamma or tail risk is tremendous and it’s VERY difficult to adjust because you don’t have much time to react. That’s what makes them so risky… and so profitable. The only thing you can do is stay put and take your medicine or blow out. I stayed put. When I first started trading, I would have been a bundle of nerves and blown it out for a loss when SPX got within 10 points of the strike. As you trade more, you have to train yourself to be as unemotional *as possible*. It’s not always easy though.

Yes, mid 5 figure trade measured by capital at risk - but the loss wouldn’t have been that much. Course, once it goes in the money, it’s a hundred dollars per point. It’s been a great week. But it wasn’t pleasant to realize what happened while I had my back turned.

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Diagonals can also be good. You sell a short dated call option pretty far out of the money, and buy a longer dated option less out of the money, or at the money. It's bullish, but hedges the cost of the long dated call a bit by selling the closer dated call.

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Isn’t this a Poor Man’s Covered Call?
Doesn’t the longer dated option serve as collateral in this example?

If so, I hate this trade in this market right now.
My 4.10 long call on Ford is now at 3.10!
It’s only been a week and the expiry is January. I’m sticking it out.

I keep selling and buying back short date calls in an attempt to break even… it’s slow going.

When I created the original Options Thread, this was what I put in the top post. reposting in here!.

What is an Option
Options Trading for Beginners (The ULTIMATE In-Depth Guide)
TastyLive Youtube
Options Greeks: 4 Factors for Measuring Risk
Tastylive Learning Center: Learn Options & Futures Trading
Best Brokers for Options Trading (I personally use and am partial to Tastyworks)

List of Common Acronyms:
C - Call
P - Put
DTE - Days to Expiration
ITM - In the Money
OTM - Out of the Money
ATM - At the Money
IC - Iron Condor
IV - Implied Volatility
PMCC - Poor Man's Covered Call
SL - Stop Loss
BTO - Buy to Open
STO - Sell to Open
BTC - Buy to Close
STC - Sell to Close

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Mock 1DTE trade here

OXY Mar 17 58.00 calls

Last trade at $0.55

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I guess it was technically 3DTE…

But current price is $1.14. Would have been a nice 2x had it been real.

No worries, you will get up to 25k in no time the way you’re trading and then you won’t have to worry about stupid PDT rules

Make no mistake, I just happened to have nailed the timing this time

Hopefully not all for naught. We’ll see in the morning.

What’s everyone got going for triple witching day?

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There’s absolutely nothing worse than the PTD rule. Timed a 4/21 call perfectly on SCHW this morning. Was up 30% in just a few minutes.

Closed at even!

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Bummer. But like Husss said, you’ll get there. Just keep doing what you’re doing and be methodical.

Simply the first time in a while that I’ve had some discretionary cash. Doing some speculative trades outside of fantasy football offseason gets me through

With that said.. I’m still not comfortable with close to expiry option gambles and probably will never be. It does sound fun to throw $1,000 on a quick trade to take advantage of market emotion. Far different and far less sophisticated than some of the risk-managed, systematic option trades that I’ve seen on this thread.

I had a guy tell me this once.. he’s worth $25M or so..

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“I don’t need to do these things, but they also won’t destroy my wealth. It’s fun for me & often times we forget life is about the journey, not just the end game.”

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QUESTION:
If my entire trading portfolio consisted of 100 shares of SCHW ($5,600) that I used to write a covered call for $64 collecting $175 in premium,

Would that particular trade represent 3.1 percent of my portfolio or 100% of my portfolio given that it all hinges on SCHW?

He can trade CCs without using margin or having a margin account - same with cash covered short puts (why they’re allowed in IRA and HSA accounts). You’re correct: the trade is linked, so he’s at 100% and the short call option just makes it a delta neutral trade. If he’s got a regular margin account, his “buying power” is probably around 50% now (+/- because of the long stock and short call fluctuating in value).