re: Options Trading Thread

For this week, other than running my standard SPX short synthetic strangles, I put on some heavy short put spread positions (252.5/240 - 6/7 expiration) on LULU (a ticker I’ve never traded before). Given the uncertainty with the current economic environment, I wasn’t crazy about a trade in a retailer/clothier. But after the earnings report, the IV crush and the price action turned the options to dust. So it worked out well.

Other smaller stuff was a 6/7 short strangle on AMZN at 167.5p/187.5c, a short call on CZR at 40 and short puts on WFC at 58 (possibly assigned today) and 57.

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short synthetic strangles

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Just short iron condors with extremely wide (not really protective) long wings. The long options are just cheap “junk” options that are in place to lessen the buying power reduction, compared to the outrageous amount of account equity it would take to actually sell a strangle on SPX.

My average lot size is 30, and daily totals overall, as many as 80. Typically, depending on price action and technicals, I’ll choose the put side or the call side to put on first, then when/if the market moves favorably, put on the other side to complete the IC/strangle. These are generally lower delta (5-7 delta on the shorts) and 0-1DTE trades.

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jag_warrior

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Didn’t see that you replied until now. Timeline was:

Buy 1DTE 526 call near open hoping number go up.
Number go down, hold too long, sell to close at substantial loss for reasons unknown (inexperience).
Buy 1DTE 521 call. Number goes up, sell to close before the rocket ship took off.

Love your posts on here

Wednesday looks to be quite the trading day.

May be useful information for those who trade 0-1DTE SPX and SPY options and use volatility indicators as guidance tools.

VIX1D

How Does the Cboe’s VIX1D Work?

Sorry to leave you hanging like that. I didn’t see your post until now. I don’t mind doing that. Once I can get back to my regular trading routine on SPX, I’ll try to offer some (close to) real time trades. The issue that I’ve had of late (with SPX being my bread & butter underlying) is the dismal IV/VIX level.

With the VIX dipping into the 11s and 1Day VIX routinely in the 7s, it’s made premiums incredibly low, and the risk/reward picture unfavorable for premium selling on SPX contracts. So in my business trading account, I’ve had to (finally) devote capital to equity options on underlyings that have some decent IV and premium… while staying away from fly by night speculative junk.

I don’t like having to do that because equity options typically don’t offer 0-1DTE contracts, unless you’re trading on a Thursday or Friday. Plus, the tax treatment on those types of contracts isn’t as favorable as index options. Yes, I could attempt to day trade higher delta short options and close by the end of the day. And that’s probably something that I’ll need to consider with both equity and index options if the IV picture doesn’t change soon.

So this week, I’ve traded larger lots of ARM and smaller lots of AMZN, NVDA, NKE and WHR options - mostly short puts, but also some covered calls and call spreads. Profitable, but compared to what I had been raking in daily on SPX options, this is chump change.

Currently enjoying my PMCC on NVIDA, TSM, RDDT, and a few smaller ones.

Been a great 2 weeks!

I went to celebrate last night with my wife! Reached a milestone by the close on Friday.

Will now turn my attention to some bigger Covered Calls rather than PMCCs (will still do those).

I am looking at NVDA. I will sell puts on it Monday. As of now, I will sell the $125 strike for $245. Should I end up with the shares. I will sell the next call up from the current price. My goal is to do 10 or more of these per week to fund my little one's account for her future.

I've been experimenting with SPX on the OA oracle

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For any posters that go long and buy the occasional leap. At what point do you usually look to roll your position up and out?

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For me with TSM, I rolled out From Jan to March 2025. It was up a lot and I want to capture some of the profit.

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RKLB

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I looked and if you roll it out and up, It's still going to cost you if you stay in the money. You would have to go out of the money to the 7 strike and still pay $15.

Depending on price action through the session, I may add on to this position or I may put on a similar position at a higher (or lower) short call strike.

But mainly I would like to put on a balancing/neutralizing short put spread position to create an iron condor. In essence, that will be a “free trade”, as it will have no affect on my BPR (buying power reduction).