re: Options Trading Thread

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Jag_Warrior

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I have so many questions for a guy that's about to break out full-time in trading!

I see you trade SPX? Do you trade stangles, ICs, what?

Mind sharing what acct size you felt like you needed in order to breakout full time?

I appreciate you sharing in the thread!

[url=https://postimg.cc/Cnn4CQXS] [/url]

[url=https://postimg.cc/PNvbR0Vk] [/url]

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I see you trade SPX? Do you trade strangles, ICs, what?

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I began focusing more on SPX last year. Now index option trades are probably 90% of what I do. You still have event risk, but not the sort of event risk that single stock options present. I mainly do ICs and these “synthetic strangles” (look like ICs, but with extremely wide wings - really only there to lessen the buying power reduction that a strangle on SPX would have). I was doing maybe 10-20 contracts a week last year. Now I probably average 60-70 contracts a week - did 25 today. When earnings season hits, I also trade some of those events (but only on “real” companies) with directional short naked options or strangles (depending on the stock’s price - I have to use credit spreads for the high priced stocks). On single stocks, I’m also fond of jade lizards and ratio spreads.

When IV rank/percentile on a stock is above 50 and the IV is also relatively high (like during earnings season), I’ll usually leg into strangles or directional positions with some size (although never more than 5-10% of my buying power on a single equity).

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Mind sharing what acct size you felt like you needed in order to breakout full time?

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I got portfolio margin several years ago when my trading account was around $100K. Once I saw that my strategies were working and proven, I increased my funding and got my “buying power” up to $500K or so. Sosnoff recommends not using more than 35% of buying power when the VIX is 20-30. No more than 30% when it’s 15-20 and no more than 25% when it’s 10-15. But when the world gets crazy, and the VIX is 30-40, you can go in with 40% max… and at 40+, 50%. But those are times when everyone around you will be loosing their minds… and you can make amazing profits vs. calculated risk. This low vol/low premium environment that we’re in now makes me nervous.

Last year my goal was to roughly equal my salary at work by trading “part time”. That worked out. This year, the goal was to double what I make at work. Thus far I’m about triple (but waiting on that elusive mean Doberman to one day bite my tail… I know he’s somewhere in the yard! ). But losses are part of the game. But like Kirk du Plessis, I treat this as a business and withdraw a “salary” each month… whether I need it or not, whether I’ve had a down month or not.

Every day, I learn something new. I consider myself still a student of this endeavor, and want to keep learning. And you guys have helped me a great deal too. And I appreciate you fellows and this thread. Not many serious options traders out here on the internet.

Yes, once I saw that Kirk du Plessis was mainly following TastyTrade (and after he began pushing the trading bots too hard), I began following Sosnoff pretty much exclusively. I still communicate with Kirk and like him, but Sosnoff is the master.

I haven’t been on Discord or Facebook (might create a page once I’m retired).

I’d very much like to attend a Bad Trader event. I met most of the Tasty team (minus Sosnoff and Battista) at a Money Show event in Vegas last year. Also had a nice chat there with Jon Najarian (completely different methodology than what we do, but a very interesting guy).

I’d love to meet up with some of you guys at an event. I put out a call before the Vegas event, but I don’t think anyone from MT made it. My next scheduled event will be the Money Show event in Orlando in early October.

This is probably far beneath the expertise level of everyone on this thread, but I've had pretty good success running a wheel-like strategy on UNG weeklies every time natural gas gets within spitting distance of $2. The premiums are surprisingly high for what I think is a pretty safe trade as long as you wait for NG to get within a few percent of $2 and avoid the last week of each month when the NG futures contract rolls over. I've only been assigned shares twice and both times they were called away the following Friday. Obviously, UNG isn't a great long-term hold so the idea is to get rid of it asap if assigned. But the IV is so high that selling calls $.50-$1 under your cost basis can still yield a healthy gain.

Any of y’all live in br? Maybe one day we could all meet up to talk about markets, options etc. Hard to find ppl interested and knowledgeable about these things here. That might be a cool thing

I'm close enough to BR, and always up for talking shop...

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personally think those Najarian twins are full of shite… haha.

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Can’t really argue with that. But I guess I’ve just always found “characters” to be interesting. I’m not into his game, but we had a good chat. The picture of me with Jon Najarian will go in the cabinet with the picture of me with the infamous Dave del Dotto back in the 80s, and a few others I’ve met over the years. I would have taken a pic with Dog the Bounty Hunter while in Vegas too… but I couldn’t look at that little fellow without laughing (where/when I grew up, a man wearing high heeled cowboy boots, makeup and hair extensions just didn’t fly).

If/when we can meet up, I’ll give $100 bucks to anyone who can produce El Gaucho - that’s another character I’d like to see in real life.

Were those short or covered calls you had?