- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Theta gang/ the wheel trades week of 3/15
Posted on 3/14/21 at 12:28 pm
Posted on 3/14/21 at 12:28 pm
Hey guys I'm relatively new to this strategy but have been using it the last month or so on a couple stocks. Wanted to being some attention though and have done discussion for those using this strategy as well.
Apha- seems like the merger goes through around apha- $20 based on tlry price action. So I've been selling puts under 20 to pick up shares then selling calls around 20.
Auph- been purchasing more shares here with puts. Will start to sell calls although premiums here are tiny compared to apha.
Anyone else out there got any good stocks to run the wheel on?
Apha- seems like the merger goes through around apha- $20 based on tlry price action. So I've been selling puts under 20 to pick up shares then selling calls around 20.
Auph- been purchasing more shares here with puts. Will start to sell calls although premiums here are tiny compared to apha.
Anyone else out there got any good stocks to run the wheel on?
2
Posted on 3/14/21 at 1:31 pm to oklahogjr
quote:
Apha- seems like the merger goes through around apha- $20 based on tlry price action. So I've been selling puts under 20 to pick up shares then selling calls around 20.
could you give us an example trade and closing strategy here?
Posted on 3/14/21 at 2:35 pm to cgrand
quote:
could you give us an example trade and closing strategy here?
Sure. So this one is a little more complex since there's also arbitrage going on overall with tlry right now. Whenever merger goes through you'll get 83 shares of tlry for each 100 block of apha shares. Tlry is trading pretty consistently mid to high twenties since deal was announced. Apha should get exhanged for value in lows 20s per share.
So what I'm doing is selling weekly puts, looking for a profitability estimate of about 70-75% in my robinhood app. So for example this morning I placed an order to sell 2 $18.50p that expire 3/19. Now I wait for Friday. I make $120 cash here. Now either I'll just collect that money rinse and repeat next week.
Or I'll get assigned shares which means I'll buy 100 shares at $18.50 and keep that premium so my cost basis is more like $17.30.
Then next week I begin selling my calls at that same 70-75% profitability range. Will target usually around 20-21 a share if the juice on em is there to make money, sometimes weeklys are shitty.
If the return is weak I may go out further than weeklies on the call side but no further than 45 days if it means making a little cash and gets closer to my expected low 20s merger price on the strike.
But then either my shares sell and I start the cycle a new or eventually this quarter the merger goes through and I'll either get shares sold at my call strike price or transitioned into tlry then sold off there.
Posted on 3/14/21 at 3:13 pm to oklahogjr
I’ll try this on paper on TOS next week and see what happens.
I’m sure I’ll understand it better once I see the price action and closing decision
I’m sure I’ll understand it better once I see the price action and closing decision
Posted on 3/14/21 at 3:29 pm to cgrand
quote:
I’ll try this on paper on TOS next week and see what happens.
I’m sure I’ll understand it better once I see the price action and closing decision
To be honest I feel like I've missed some chances to sell for a big profit. My account swings have been wild but when I got settled out of a trade last week for setting too low of a call strike i was up like 10%.
Something I've also been reading more of is to sell options 45 days out but close your position on the strikes at 50% return on premium. Then you're in less danger of accidently closing or entering a position you don't want since the decay curve accelerates at 45 days to close.
Posted on 3/14/21 at 9:43 pm to cgrand
Apha merger date set for 4/20 apparently based on 4/12 vote
Posted on 3/15/21 at 8:53 am to oklahogjr
It’s a strategy that I’ve used for several years. And it can be very profitable. But I tend to avoid special situations (other than earnings announcements), as their price movements are rather unpredictable. I generally use the deltas to decide my strikes, and when unexpected news could hit at any time, that screws up the predictable range.
With this strategy I use the deltas, as well as some basic charting to see where I’d be content to own the stock if the naked put does go ITM. And then I set a profit target for the short call strike (irrespective of delta) as my desired exit point.
I used the strategy on PLUG and got shares at 16 way back when. I made a good return when it got called away at 18. But look at it now.
So you have to be prepared for a stock to run after it gets called away, and also for a stock to collapse (FSLY) once it gets put to you. Just have to remember that you’re playing a long game with this particular trading (NOT an investment) strategy.
With this strategy I use the deltas, as well as some basic charting to see where I’d be content to own the stock if the naked put does go ITM. And then I set a profit target for the short call strike (irrespective of delta) as my desired exit point.
I used the strategy on PLUG and got shares at 16 way back when. I made a good return when it got called away at 18. But look at it now.
So you have to be prepared for a stock to run after it gets called away, and also for a stock to collapse (FSLY) once it gets put to you. Just have to remember that you’re playing a long game with this particular trading (NOT an investment) strategy.Posted on 3/15/21 at 6:39 pm to Jag_Warrior
Are you looking for high or low deltas when you enter the position? Selecting positions beyond high iv or high but decling iv hasn't really done exactly what I want for myself so far.
Posted on 3/15/21 at 7:29 pm to oklahogjr
You see KMPH this afternoon? Wow.
Posted on 3/15/21 at 8:10 pm to bayoubengals88
quote:I missed it. What happened with them? Looks like it took off for something dang it
You see KMPH this afternoon? Wow.
Posted on 3/15/21 at 8:23 pm to oklahogjr
Severely oversold after FDA approval is all I can think of?
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News