re: Options Trading Thread

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My goal is to do 10 or more of these per week to fund my little one's account for her future.

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I meant to ask, what type of account(s) are you trading in, tax advantaged or a regular brokerage? Just curious about how you’re dealing with taxes.

With the VIX just shy of 30 intraday on 8/2, and closing above 20, are the optioneers here taking advantage of short premium plays? Remember, volatility tends to be overstated. So when it’s inflated, the probabilities tilt even more in the favor of short premium strategies.

Although one has to be very strategic (timing wise) when doing 0-1DTE SPX option plays in this environment, a VIX reading in the 20-30 range is where you can make serious money. I was pleased to be able to deploy more capital/higher % of “buying power reduction” and capture bigger (weekly) gains. I hope some of the rest of you were able to do the same.

The VIX expansion also provided an opportunity for standard 45DTE short premium operators. Just be mindful with your chosen deltas, as a further VIX expansion could challenge your positions, especially on the downside if doing delta neutral strategies.

In the business trading account, almost exclusively SPX short premium strategies: primarily 0DTE trades. For tax reasons, I stick with index options over equity options. And I prefer delta neutral trades (synthetic strangles mostly). I don’t/haven’t traded the NDX index options because I’m not able to accurately gauge the price action. NDX tends to move too fast for the indicators that I use. But the IV is typically higher than SPX, so premiums are more attractive. Maybe in time I can feel confident or comfortable enough to wade into that shark pool.

In my tax advantaged investment accounts, I trade equity options too. I use the free cash I have to generate returns with short cash covered puts, call spreads, jade lizards, etc. If I get assigned, if it’s something I like at a (perceived) good price, I’ll have a long position that I’m content to hold. If not, I’ll sell covered calls (or run the “wheel strategy”) until I can rotate out.

Are you still pretty active?

I can understand your caution. But I started wading in with smallish lots a little after 10AM ET. I sold more premium on SPX today than I have probably all year. I formed the legs on a series of synthetic strangles separately and moved strikes up and down as the market was tanking and rebounding.

When the VIX hit the 60s, I was like a fat kid staring at a cake sale. As IV started to decrease sharply, that took the air out of the short options and I let them all turn to dust by 4PM. Not bragging at all. But extreme market movements, that spike the VIX, are what we live for. Hope everybody else had a good trading day too.

^^^Sweet!

I only sold large lots of SPX 0DTE call spreads today. Support/resistance at the 5300 level made it “safe” to launch large quantities of 5350 and 5360 short calls. There was the temptation to match those up with corresponding short puts, but the way the market has lost traction near the end of the day didn’t make that play as attractive to me.

For those that wanted to see something close to a real time trade, here we go:

With this middling IV environment, when dealing with 0DTE options, I’m always waiting for pops or more extreme moves in one direction or another - or I don’t trade at all (never force a trade). With 5350 having represented resistance yesterday, at best (with volume and money flow as they are), that level should represent a line in the sand through the end of this session.

So with that sudden pop to the upside around 1:30PM ET, I sold a large lot of 0DTE SPX wide wing call spreads (5410/5440) about 45 minutes ago, when SPX topped 5350 and headed to 5358 (current session high). The delta on the short calls was around 5. The market fell back off 5358.67 pretty quickly and now stands at roughly 5335. The short calls are now at .76 delta with less than 2 hours to the close. Pure luck that I pretty much hit the top and then saw almost instant premium decay… hardly ever happens.

Short of some incredibly good macro news, it’s typically the case that SPX would lose steam on a Friday afternoon - especially with weekend global news events posing a risk in suddenly going long and sparking a major updraft rally. So I’m content to let these turn to dust by 4PM.

Sorry, I’m not familiar with LUMN.

As for F, have you considered selling cash secured puts to establish a long stock position and then selling covered calls (the “wheel strategy”)? If you definitely want stock, you could go long on a certain amount and use cash secured puts to build your full position. Just a thought.

Bumping this thread from the ashes!


I've had a great month and hope you all have too!

Glad your trading is going well. My only trade on right now is MSFT short puts

I like hitting a quick $2250 give or take on some weeklies