re: Options Trading Thread

I got the May 5 $170 for 3.90 and the $175 for 2.78.

Mostly a lotto play but I expect it to be back over $180 within a week

Just opened VALE $15 calls May 19 for .28

I added to my VALE position when 1 CSP assingned at $15 yesterday. I have been doing CC's and CSP's on this stock and wanted to add so the premiums I have added makes up the difference of what I ended up paying. Also assigned 1 CC at $40 on FCX and I use the same strategy to add to this stock.

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I added to my VALE position when 1 CSP assingned at $15 yesterday. I

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What's the deal with VALE? I saw it pop up on a screener yesterday for high IV.

You’ve got it right, if he really wants to hold onto the stock. Afterall, a “roll” is really just closing out a position and opening a new one at the same time. Vanguard may not offer rolls on their platform (which is kinda weird and would probably make me move to a different platform), but like you said, he can do the exact same thing piecemeal.

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Vanguard may not offer rolls on their platform (which is kinda weird and would probably make me move to a different platform),

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I'm considering moving my Roth to Schwab. Vangaurd sucks for anyone who isn't a target date investor.

Question: Would a brokerage like Tasty Trade provide "chance of profitability" for a trade like this one?

I'm guessing it's north of 80% ??
I like this trade on paper. Giving yourself a lot of room to the downside...a breakeven price that's about 5% below market with just 25 days to go.

Is the premium too low though?
I read where you should collect at least a third of the width of the spread.

In this case, 1.13/5 = 22.6
Would you pass?

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With earnings is an iron condor too risky for the reward? Strangle, straddle could work if you're expecting big moves?

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A credit spread would be directional, but not so much risky… depending on where you set the delta. Because there’s unlimited risk on the call side of a strangle or straddle, I’d lean more toward the iron condor or iron butterfly if you want a neutral strategy. I personally don’t do iron butterflies, just because I don’t care to manage them if the move after earnings is outside the predicted range. But many/most would disagree with my risk aversion there, because they can be very profitable for the amount of risk put on.

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I like this trade on paper. Giving yourself a lot of room to the downside...a breakeven price that's about 5% below market with just 25 days to go.

Is the premium too low though? I read where you should collect at least a third of the width of the spread.

In this case, 1.13/5 = 22.6 Would you pass?

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I’ll likely play AAPL, but I’d pass on the 5/19 contracts right now, mainly because you want remember that AAPL is due to report earnings on May 4 after hours. So there’s a good chance that IV will spike just before that event. And depending on what happens with earnings, there’s typically a severe drop in IV the day after (you’ll see people mention “IV crush”). So the better time to sell that, or any shorter dated setup would be during the IV runup and then look to close the day or so after the earnings event. Remember, we want IV to be relatively high when we sell/go short and relatively low when we buy/go long options or buy to close a position.

BTW, I would watch your short put on that setup though. Because the current expected range on the 5/19 expiration is +/- $10.186, that 160 short put is at roughly 31 delta (33.61% probability of being in the money) - so that’s quite high this soon before earnings.

And yeah, even though I haven’t used the TastyTrade platform, from what I’ve seen, they do as good or maybe an even better job than Think or Swim in calculating Probability of Profit (POP) and other factors related to option trading. After all, Tom Sosnoff created both platforms. If there are any kinks at all as Schwab integrates ToS, I’ll be transferring my account to Tasty.