re: Options Trading Thread

I’m in WBR and would def be down for a local meet up!

I am current short put spreads on COST, EOG, SU, XOM, BTU. Appears to be a lot of energy in there. These are all systematic trades based on moving averages.

BAC looks interesting. It is above it's shorter term moving averages but below its 50 and 200 ma. I'd be more willing to play the IV crush there if it was over the 50.

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BAC looks interesting. It is above it's shorter term moving averages but below its 50 and 200 ma. I'd be more willing to play the IV crush there if it was over the 50.

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I went ahead and sold the 29 strike puts at the 20 delta in a retirement account. I agree, BAC isn’t a great tradeable here. But I’m content to be long shares and hold them in the IRA. Including the put premium, that cost basis would put it a little above a 3% div.

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You’re looking to keep wheeling those til they hit your desired strike/exit?

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I’ll wheel if they get called away, yes.

My desired exit is $30/share so I will continue to roll the calls forward and upward as long as people are buying them for .35 or more.

Next I’ll probably go with 4 contracts of May 14s.
But I don’t know. Earnings is coming up and historic moves have been wild.

I have some SCHW shares in an IRA. I’m content to keep those. The short puts I sold in my trading account before earnings are trading for a nickel or so, and I’ll probably take those off tomorrow… or let them die on Friday.

Earnings plays upcoming:

$NFLX: Iron Condor $280/$285P $382.5/387.5C. $0.72cr.
UAL: Call side BWB: 43C/-44.5C/47C. 0.21 db. Playing some upside with minimal downside risk.

In different accounts, I’m selling 4/21 short puts on IBM, TSLA, MS and DFS. I’m not happy with the premiums on any of them, except TSLA. Can you believe the VIX?!

I had some 0DTE SPX ICs loaded, but I wasn’t willing to lay on a lot of risk today, other than these earnings plays. Yesterday’s spike at the end came within about 3 points of catching my short calls. I’ve only had 4 hours of sleep and I couldn’t deal with the stress of watching for something unexpected today.

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Edit: I shouldn’t post or trade when I haven’t had much sleep.

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Yessir.
Friday exp.
And so far so good. NFLX down 10% earlier but settled flat.

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Friday exp. And so far so good. NFLX down 10% earlier but settled flat.

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Looking like a made 3 pointer from the top of the key.

Vol (represented by VIX and/or /VX) is depressed overall. Looks like VIX is struggling to stay above 16. So for something a little different, I just constructed and sold some jade lizards on SLV (needed something not closely correlated with SPX - SLV beta is .587).

Going out to the June monthly expiration, the trade looks like this: naked puts at 20.5 (13.75 delta) and a call spread at 26/28 (short call at 17.60 delta). I wanted a bearish skew, but wasn’t able to capture a net credit that was 1/3 the width of the call spread (so not an ideal setup at all). I’m only getting .33/jade lizard contract. Ideally the net credit would cover the risk inherent in the call spread. Higher IV or higher deltas would have accomplished that.

The IV on SLV is currently at 30% and IV percentile is 23% (a big reason why the credit is lower than I’d like). At roughly 21 days, I’ll look to close this trade around 60% of max profit. If the put gets challenged and breached, I’m willing to take an assignment at 20.5 and wheel my way out with covered calls later on. If the short call side gets challenged, I’ll look to roll the entire position up and out in time. Although you don’t have to watch jade lizards like a hawk, position management *may be* necessary.

Your BPR (buying power reduction) is going to depend on the type of account that you have. But a jade lizard structure (constructed and executed as one multi leg contract - although you can adjust the legs separately) can be traded in a margin or a cash account. In a cash account, you’d just have the $2 call spread minus .33 credit (1.67) plus 20.50, so 22.17/contract BPR (plus commissions/fees).

So this is not a trade recommendation. Just an illustration (although admittedly not a great one) for anyone who might be curious about jade lizards. For me, this is just one of those “fun” trades that won’t make or break me either way.