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Let's Trade Options

  • #16,841
  • May 8, 2019 2:45pm May 8, 2019 2:45pm
In the following:

SINA May19 57.5 CALL @ $1.60

Should be quick money by end of the week, probably tomorrow...
  • #16,842
  • May 8, 2019 7:43pm May 8, 2019 7:43pm
Quoting The Fool
{quote} SOLD 5/17 $286 SPY puts for $2.10, gives me a calendar @50c credit...a risk free trade {image}
TF, how many contracts do you typically get in with a credit spread? Since they are risk free, you just need a minimum balance to trade the spreads, right? Since most of the trades are low cost (<$0.25/share), is there a max number of contracts you like to hold at one time?
  • #16,843
  • May 8, 2019 11:51pm May 8, 2019 11:51pm
Quoting moneymaker2
TF, how many contracts do you typically get in with a credit spread? Since they are risk free, you just need a minimum balance to trade the spreads, right? Since most of the trades are low cost (<$0.25/share), is there a max number of contracts you like to hold at one time?
hey money - we have to get our spread names right first:

I trade credit spreads sometimes and often those are short verticals (say like I sell 5/17 SPY $295 calls and buy 5/17 SPY $297 calls - that's a credit spread - that requires $200 margin (or buying power or BP) per contract, so there would be a limit as to how many I might trade based on how much margin I wanted to tie up on that trade. Same for diagonals. Having those short front options hanging out there is risky and I often don't do it unless I have other trades in front of it that will mitigate that risk.

Calendars are margin-neutral. I might be in calendars up to 60-80 lots sometimes.

Sometimes, like in the SPY put calendar described above, I legged into the spread with a directional bias and if that worked out, I get into the spread for credit - but it's not really a credit spread if it's a calendar or bull vert....

Anyway, I trade a lot of the same thing - SPX mostly - and I have short/long positions spread out 1 week to 2-3 months, things start as a leg-in or cheap fly or calendar and get sliced and diced into other spreads, so it's kind of an ongoing process of trading the market where I am just trying to hoover up profits, eliminate risks, and get myself into some positions for big gains around scheduled events.

Only problem now is there are no events really and the market has been dull and only worth trading for the long upgrind or maybe btfd if you get one....,the dips coming off tweets and shit that can't be anticipated.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,844
  • May 9, 2019 12:00am May 9, 2019 12:00am
Quoting moneymaker2
TF, how many contracts do you typically get in with a credit spread? Since they are risk free, you just need a minimum balance to trade the spreads, right? Since most of the trades are low cost (<$0.25/share), is there a max number of contracts you like to hold at one time?
....so, in the example trade you referred to, I legged into the long puts, paying $1.60, so I would maybe put a % at most on that leg and then hope my directional bias was right, get movement in my favor, and sell some options to lock in some profit and eliminate the risk of the original long position.

Anyway, I rarely think about numbers of contracts and am just watching some rules about max % of equity at risk, margin used, etc...number of contracts is an irrelevant detail to me.

Trading for me has become an exercise in how to eliminate risk. I want to make money and I'm always looking to get into some positions that have large return potential, but the #1 priority is to do that with a minimum of risk. I hate drawdowns like the plague...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,845
  • May 9, 2019 11:38am May 9, 2019 11:38am
Quoting moneymaker2
In the following: YY May24 76 CALL @ $2.50 Should be good for some spending money....
Added to the following:

YY May24 CALL @ $1.90, making average cost $2.20

Had the order in last night, but just found out it was hit because we lost power early due to a storm and it just came back, so that was a pleasant surprise.

Still looks really good provide we don't tank more from China talks....
  • #16,846
  • May 9, 2019 12:01pm May 9, 2019 12:01pm
Quoting moneymaker2
{quote} Added to the following: YY May24 CALL @ $1.90, making average cost $2.20 Had the order in last night, but just found out it was hit because we lost power early due to a storm and it just came back, so that was a pleasant surprise. Still looks really good provide we don't tank more from China talks....
right now its trading at 73.40 right above 200 ema but must see how it moves through the day
  • #16,847
  • May 9, 2019 1:26pm May 9, 2019 1:26pm
Quoting moneymaker2
In the following: WLK May19 60 CALL @ $1.75 Should be good for some quick bucks.....
Out of the following:

WLK May19 60 CALL @ $2.30 up from $1.75

Trading ~$61.60, and the 5EMA is only ~$61.90, so close enough to bumping it for me, especially the way the market is bobbing around....
  • #16,848
  • May 9, 2019 1:48pm May 9, 2019 1:48pm
Quoting The Fool
{quote}Anyway, I rarely think about numbers of contracts and am just watching some rules about max % of equity at risk, margin used, etc...number of contracts is an irrelevant detail to me.
I think it is pretty neat how there are different ways to skin a cat. For me, being short term small moves, trading different stocks and never holding until expiration, the number of contracts is pretty much my main focus after I determine the stock to trade. So, if the option price is too high for me to get a decent number of contracts or I have to go too far out of the money, I just pass on the trade and look for something else. Now, if I had the money, I'd sure go with deep in the money options and not need as many contracts, but as it stands now, I look for those trades that can give me the most contracts to allow me to capitalize on those short term moves that to a lot of traders, may be too small to even bother with....
  • #16,849
  • May 9, 2019 11:59pm May 9, 2019 11:59pm
Quoting Cecil Gee
{quote} still not in,but my eyes are on SPY 285/6 puts for under 40c if it ever gets there. That potential trade will be a insurance.
update. I did get in of the above 285 put Spy for 38c ON Tuesday and closed yesterday at $2.62, this was to compensate for the NFLX call position I had on which after TRUMPS comments on tariffs was looking likely. NFLX i got out at $1.41 with a net loss of 89c. with the 2 positions it ended of +positive. Will wait now until this tariff issue is resolved
  • #16,850
  • May 10, 2019 2:45pm May 10, 2019 2:45pm
Quoting moneymaker2
In the following: AMG May19 95 CALL @ $2.00 Three days ago it was at almost $111, and now it is around $94....okay news from the China stuff will be decent money....
Added to the following this morning:

AMG May19 95 CALL @ $0.85, making the average just under $1.43

Should help make money on this one, but will need a couple of up days beginning of next week...
  • #16,851
  • May 10, 2019 2:51pm May 10, 2019 2:51pm
Quoting moneymaker2
{quote} Added to the following: YY May24 CALL @ $1.90, making average cost $2.20 Had the order in last night, but just found out it was hit because we lost power early due to a storm and it just came back, so that was a pleasant surprise. Still looks really good provide we don't tank more from China talks....
Big drop of over $4 this morning from high to low for no real apparent reason. Might recover from this one unless huge days Monday/Tuesday.

Funny how some stocks will follow the DJIA down nearly candle for candle, but not the recovery. I see that over and over....
  • #16,852
  • May 13, 2019 11:53am May 13, 2019 11:53am
indices down 2.5 - 3+ %, to btfd or not to btfd?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,853
  • Edited 9:09am May 15, 2019 2:05am | Edited 9:09am
btfd of course....my SPY calendar puts May 17/20 @ $286, in for 50c credit, I need SPY to float up above $286 Wed or Thurs, risking assgnmnt itm, but no worries....with luck I catch the grind back up above $286 by the end of the week, keep the $0.50, then hold the long options into next week and score >4$ as SPY gets back above $290 by 5/22....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,854
  • May 16, 2019 7:53am May 16, 2019 7:53am
Quoting The Fool
btfd of course....my SPY calendar puts May 17/20 @ $286, in for 50c credit, I need SPY to float up above $286 Wed or Thurs, risking assgnmnt itm, but no worries....with luck I catch the grind back up above $286 by the end of the week, keep the $0.50, then hold the long options into next week and score >4$ as SPY gets back above $290 by 5/22....
....lol, I have position mixup, put spread would need pullback Monday...this calendar prolly comes off today or Friday if it is in the fat zone around $286
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,855
  • May 17, 2019 9:31am May 17, 2019 9:31am
Quoting The Fool
....lol, I have position mixup, put spread would need pullback Monday...this calendar prolly comes off today or Friday if it is in the fat zone around $286
....watching $286, looks safe, will hold the long puts for a Monday drop....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,856
  • May 17, 2019 10:07am May 17, 2019 10:07am
Markets making back good ground. Took a SPY call trade for next week exp $290 call at $1.00. Charts looking good in clawing back most of the pullback resulting from Trumps tariff talks last week. SPY Trading around 288.20 as of writing

SPDR S&P 500 ETF (SPY)
NYSEArca - Nasdaq Real-time price. Currency in USD
Add to watchlist
288.21+0.51 (+0.18%)
As of 11:05AM EDT. Market open.



SPY May 2019 290.000 call
OPR - OPR Delayed price. Currency in USD
Add to watchlist
1.00-0.25 (-20.00%)
As of 10:47AM EDT. Market open.
  • #16,857
  • May 17, 2019 2:38pm May 17, 2019 2:38pm
Quoting The Fool
....watching $286, looks safe, will hold the long puts for a Monday drop....
...got skirred and took it off for a net $1

....I kind of smell some "sell in may, go away".....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,858
  • May 20, 2019 11:35am May 20, 2019 11:35am
Quoting The Fool
....watching $286, looks safe, will hold the long puts for a Monday drop....
...too bad I couldn't swing it
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,859
  • May 20, 2019 1:22pm May 20, 2019 1:22pm
Quoting The Fool
....I kind of smell some "sell in may, go away".....
...nobody wants to be caught holding the bag if WWIII breaks out....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #16,860
  • May 21, 2019 6:55am May 21, 2019 6:55am
Got a dumb question

When you trade fx option, lets say you buy a call eurusd, do you have to pay the daily swap ? or you just trade the option as it is?
COT: The precious data ignored
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