re: Options Trading Thread

S/O BourbonDad on the 1/24 TGT 120 and 130 calls.

Did not see PYPL post, ugh. Keep em coming though please and thank you.

Well, there is some premium to be had, though not great, but you don't really want to short one of the long volatility derivatives with VIX this low. If the VIX were to go from 13 to 18 in a short timespan for example, your short call options would get obliterated in UVXY. The higher VIX is when you put on a UVXY short call trade, the better, because it gets harder and harder for volatility to accelerate as you approach a higher and higher level. That's why you hear terms like "heavy" to describe VIX when it's in the 30s. At the end of the day, VIX is just measuring IV of SPX options. So when those swell up too much, the balloon eventually leaks out air.

One trade I do put on every 60 days continuously though is short the 40/20 delta SVXY put spread. This is a longer term short volatility trade. You can backtest this in Tasty Trade or CML and you will find it averages a 9% return per trade over the last 5 years. Pretty darn good for a 2 month trade you can put on in perpetuity. It also has an 81% win rate.

I could see a naked call or a naked call spread. At this level of froth I couldn't sell a put.

I’m taking put leaps. Supply chain issues will rear its head. The whole OpenAI/Sam Altman thing plus an NVDA miss will bookend the “AI is our savior” narrative. Very coincidental timing if you ask me.

Thinking about selling the 555/565 call spread. Looks like it's going for 2.45 ish

Just bought an ATM $SPY straddle 1/31/24 EXP because.. why not?

If we rip to ATH, or drop and have big Vol expansion, I’m happy.

If we remain where we are by EOY, I’m down $500.

For earnings plays I sold the DE 360 put and the ADSK 197.5 put. The ADSK looks like it will expire worthless. The 360 may have to be rolled, but it's turning back up now so who knows.

There are some solid earnings this week too. Workday, Intuit, Splunk

I went with 12/1 short puts on CRWD and USO. All good so far. WDAY would have also worked out fine with short puts - might have challenged on short calls or a SCV/iron condor though. I just wasn’t as familiar with the name and its tendencies around earnings. Did you get into a strategy on it?

Watching the action this week has been rather blah. VIX still with a 12 handle, so premiums are at minimum wage levels. I’ve done smaller 1DTE SPV and SCV SPX trades this week. All winners so far… just not the money I typically make with these trades. But also, no real stress, what with the market remaining flat. Seems to want to hang onto 4550. We’ll see how long that lasts until it breaks one way or the other.

Good enough post turkey week for you guys so far?