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Trading Options
Posted on 8/30/16 at 3:30 pm
Posted on 8/30/16 at 3:30 pm
Anyone here trading options on the daily? Is it possible to make it a full time gig?
Posted on 8/30/16 at 3:31 pm to Douboy
I sell puts weekly, its great income but im not gonna lie to you and say everyone can do it. The cliche it takes money to make money exists. I can make .5% thats half a percent not 5% almost weekly trying to buy stocks i want long term for less than their current price. If your goal is $500/week you're gonna need $80-100k
This post was edited on 8/30/16 at 3:32 pm
Posted on 8/30/16 at 4:21 pm to dabigfella
Selling options definitely takes money to make money. That's why I'm always on the buy side
And futures, good luck bro. I've never lost money quicker than having an open contract in Nat Gas during inventory announcements.
And futures, good luck bro. I've never lost money quicker than having an open contract in Nat Gas during inventory announcements.
Posted on 8/30/16 at 4:28 pm to BobRoss
quote:
And futures, good luck bro. I've never lost money quicker than having an open contract in Nat Gas during inventory announcements.
I was trading ETF's and ETN's instead of futures, but events like that made me realize how bad of an idea it can be to trade binary events, especially considering how fast computers can react as soon as the reports are out. So I prefer to either follow the trend or get in front before a reversal.
Posted on 8/30/16 at 4:32 pm to dabigfella
What is your strategy for selling puts? How far out are you willing to sell? How far below current strike price do you go?
I'm not even certain on the margin requirements to sell. Is it just to cover if the option is exercised?
I'm not even certain on the margin requirements to sell. Is it just to cover if the option is exercised?
This post was edited on 8/30/16 at 4:35 pm
Posted on 8/30/16 at 4:35 pm to BobRoss
I just do weeklies on stuff I was gonna buy anyways. Im constantly just selling them on starbucks over and over and over and basically when Im put shares i turn around and sell weekly calls on them till im called away. Its just rinse and repeat with the names i want long term in my portfolio.
the margin requirements go by name, like apple is 10%, starbucks/google are 25%, gilead today i sold some 30%, and tesla is 50%
so not sure how they're calculated but im assuming its by risk, tesla has 2018 $20 puts trading for .50 id love to sell those but im long the stock and dont wanna sell those in size and it goes bust on me lol
Gilead I bought a buncha stock today im gonna wait till the day before ex-div day in 10 days and then sell calls vs it and get a double dividend.
the margin requirements go by name, like apple is 10%, starbucks/google are 25%, gilead today i sold some 30%, and tesla is 50%
so not sure how they're calculated but im assuming its by risk, tesla has 2018 $20 puts trading for .50 id love to sell those but im long the stock and dont wanna sell those in size and it goes bust on me lol
Gilead I bought a buncha stock today im gonna wait till the day before ex-div day in 10 days and then sell calls vs it and get a double dividend.
This post was edited on 8/30/16 at 4:38 pm
Posted on 8/30/16 at 4:47 pm to dabigfella
So are you trading large volumes or close to the money strike prices?
And what platform do you use? If I were to sell 100 puts TD Ameritrade would charge me $160
And what platform do you use? If I were to sell 100 puts TD Ameritrade would charge me $160
Posted on 8/30/16 at 4:49 pm to BobRoss
no I use etrade, im etrade platinum not sure the minimums for that but no my fees arent quite that high but selling that many contracts is not cheap. FYI if you're selling 100 puts you're taking on 10,000 shares lol. Im not executing $570,000 weekly put sales on starbucks lol. I do like 10 contracts on a couple different names i like.
Posted on 8/30/16 at 4:52 pm to dabigfella
So you're doing very close to ATM strike price, right?
For weeklies if you're too far out from the strike price is it even worth selling puts? I'm assuming you're looking at weeklies for the next week or week after.
And I realize that's 10,000 shares, but my man I've traded more oil than small nations !
For weeklies if you're too far out from the strike price is it even worth selling puts? I'm assuming you're looking at weeklies for the next week or week after.
And I realize that's 10,000 shares, but my man I've traded more oil than small nations !
This post was edited on 8/30/16 at 4:55 pm
Posted on 8/30/16 at 4:55 pm to BobRoss
in certain names it is, like tesla. It just depends on how jakked up the IV is. Starbucks doesnt really move much much so the IV is timid thus the premiums are meh, but for me Im just trying to make income and add to existing positions. Like if I wake up monday morning and starbucks is 56.11 and the 56 weekly put is .30 why would i buy it for 56.11 when i can sell that and buy it for 55.70 if it gets there. If it doesnt cool I just made $30/contract before fees and i move on.
Posted on 8/30/16 at 5:00 pm to dabigfella
That's certainly more conservative than me trading index futures during Yellen's speech!
I should probably just bite the bullet and become a responsible adult, put more money into my account, and be an investor and not a trader.
I should probably just bite the bullet and become a responsible adult, put more money into my account, and be an investor and not a trader.
Posted on 8/30/16 at 7:49 pm to Douboy
quote:
Anyone here trading options on the daily? Is it possible to make it a full time gig?
If you work for a major institution, sure. But their transaction costs are basically nothing and can play tax games you can't.
Here's an example - I know someone who hit it big and wound up with several hundred thousand in profit one year. His capital gains tax bill was outrageous.
The next year he lost nearly all of it. Thing is, you can't claim a capital gains tax loss and get it all back, you can only claw back $3,000 each year.
Posted on 8/30/16 at 7:58 pm to BobRoss
quote:
Selling options definitely takes money to make money. That's why I'm always on the buy side
Statistically, most puts expire worthless.
That being said, I only sell cash secured puts and covered calls.
I've been put shares and have had shares called away. In general, if you sell a out of the money put of a company that has a sustainable business, you probably will do ok most of the time.
Options expire. Most expire worthless. In general, selling options is the better option.
This post was edited on 8/30/16 at 8:03 pm
Posted on 8/30/16 at 9:22 pm to Douboy
I do decently selling puts also. Mostly on stocks that are under $15.. I usually make around $40-80 a week selling puts.
Posted on 8/30/16 at 9:33 pm to BobRoss
selling 100 puts would be very expensive you were assigned the shares. I Mostly sell JCP puts. I buy sell about $0.50 - 0.70 below the monday price.
Posted on 8/30/16 at 9:38 pm to b-rab2
Give us a scenario please. Also, who's your broker?
Posted on 8/30/16 at 9:50 pm to bayoubengals88
ok... Actually this week I did not sell any.. I was on vacation. butttt looking at JCP right now its at $9.67. The Friday puts are going for $0.06 @ the strike of $9.50. I could sell 10 contracts (1000 shares), collect $60. If it stays above 9.50 on friday at the close, I don't get any of the shares and I keep my $60. If it closes below $9.50 I'm assigned the shares at $9.50 x 1000 = $9,500 - $60 I collected.
If that happened I would probably sell the $10 calls for the next week and collect again for a few bucks.
But I like JCP long term, so if I picked up the shares I would have been bummed, but happy.
Edit: TD Ameritrade
2nd edit: You can close out of the option a few minutes before the close of trade on friday and collect as much Theta as you can, or just take the shares.
If that happened I would probably sell the $10 calls for the next week and collect again for a few bucks.
But I like JCP long term, so if I picked up the shares I would have been bummed, but happy.
Edit: TD Ameritrade
2nd edit: You can close out of the option a few minutes before the close of trade on friday and collect as much Theta as you can, or just take the shares.
This post was edited on 8/30/16 at 9:52 pm
Posted on 8/30/16 at 10:10 pm to Douboy
This is great, thank you guys for all the input. Keep it coming.
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