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Let's Trade Options

  • #18,201
  • Sep 13, 2022 11:26pm Sep 13, 2022 11:26pm
Great day today and cashed out quite a few $3-4 net gainer put backspreads, left some, still hanging in all put calendars, all are set @ Sep 16/19. Sitting pretty but who know how they will end up? I want to have some bullish setups in play for the latter part of next week, after the FOMC.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,202
  • Sep 14, 2022 8:04pm Sep 14, 2022 8:04pm
all put spreads for the week will start to come off tomorrow in very nice profit, I may hold out for the perfect finish Friday but it's hard to do that when the winners are stacking up towards 10x. No need to be a hero. Call spreads of course are all worthless, but not entirely, as I will roll their parts out as soon as they look lost. Always trying to build wide calendars such as shown below, no problem spending a little bit to get there. Some of these things can have amazing returns if well positioned and well timed.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,203
  • Sep 15, 2022 8:33pm Sep 15, 2022 8:33pm
Quoting The Fool
all put spreads for the week will start to come off tomorrow in very nice profit, I may hold out for the perfect finish Friday but it's hard to do that when the winners are stacking up towards 10x. No need to be a hero. Call spreads of course are all worthless, but not entirely, as I will roll their parts out as soon as they look lost. Always trying to build wide calendars such as shown below, no problem spending a little bit to get there. Some of these things can have amazing returns if well positioned and well timed.
....mostly flat, left some put calendars run for tomorrow's expiry, although almost all came off at about $8.50 net - right about 5 bag. A stellar week, about 9% up, erased last week's stupid loss. Building positions for the week after FOMC, which I think we'll bounce into. Looking for SPX 4,150 or better. 3,750 or lower to balance southbound.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,204
  • Sep 17, 2022 12:30am Sep 17, 2022 12:30am
Late Friday hammer points to Mon-Tues clawback to 3,950 plus a little more maybe. Then we'll see how the markets (stocks and Treasuries) react to the Fed's 75 bps hike. It's not going to be more than that and you could say the hike is already well-baked in. What Treasurys do post-FOMC is what to watch - rates have not been so inverted in decades - why take a chance on stocks if you can get 4.5% on a 6-month T-note? That's a question many will be asking while Treasury rates are elevated and explains a lot of why stocks will be under pressure. Beyond next week will be earnings onslaught and we'll see what that brings. I'd say 4,100 caps the upside for the rest of Sept and southbound we could see more large moves, maybe as low as 3,300.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,205
  • Sep 18, 2022 1:14pm Sep 18, 2022 1:14pm
Slim says he thinks SPY=350 will hold the downside for the rest of the year, but then hints the bear market will extend into 2023.

Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,206
  • Sep 18, 2022 4:36pm Sep 18, 2022 4:36pm
Quoting The Fool
Slim says he thinks SPY=350 will hold the downside for the rest of the year, but then hints the bear market will extend into 2023. https://www.youtube.com/watch?v=NvyY...EwjgHA&index=4
I stand corrected his cycle indicator has been more accurate than myself recently. TINA is compromised at the moment.
  • #18,207
  • Sep 18, 2022 9:01pm Sep 18, 2022 9:01pm
Quoting Steamroller
TINA is compromised at the moment.
For sure. An interesting time to be a trader.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,208
  • Sep 19, 2022 8:27pm Sep 19, 2022 8:27pm
Double calendar set for the week. I spend more on the calendars, but they have a better max payout and I spend less guarding the tail risk, which is much reduced. The week should see good volatility increase, so I don't look for a wider time spread. Just set now & wait til Thursday or Friday, hope for a good harvest.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,209
  • Sep 22, 2022 4:16pm Sep 22, 2022 4:16pm
I cashed out about 1/3 of the RUT and a couple of the SPX Sep23/26 put calendars and that broke me even m/l for the week, will cross fingers for further drop Friday
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,210
  • Sep 23, 2022 8:22am Sep 23, 2022 8:22am
good grip of RUT put calendars - Sep 23/26 1680 and 1685, looking good for a maxP finish, maybe see if I can let some run to Monday.

SPX 23/26 3,650 puts will pay very well if pre-market red stays red for the day....sitting at about net 5x now
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,211
  • Sep 23, 2022 9:08am Sep 23, 2022 9:08am
PERFECT finish on the RUT spreads, taken off as the short strike was touched. In for $1.65, out for $7.30.

Have also taken some of the SPX spreads off at about $10 net (in @$2, out @ $12)......this week is sitting at a net 16% gain over all accounts. The max at risk I think was no more than 3%.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,212
  • Sep 23, 2022 10:20am Sep 23, 2022 10:20am
Quoting The Fool
Late Friday hammer points to Mon-Tues clawback to 3,950 plus a little more maybe. Then we'll see how the markets (stocks and Treasuries) react to the Fed's 75 bps hike. It's not going to be more than that and you could say the hike is already well-baked in. What Treasurys do post-FOMC is what to watch - rates have not been so inverted in decades - why take a chance on stocks if you can get 4.5% on a 6-month T-note? That's a question many will be asking while Treasury rates are elevated and explains a lot of why stocks will be under pressure. Beyond...
...a break of 3,650 opens the door to 3,500 in earnings week. The US 2's are @ 4.17% today. Crazy moves in USD strength (against the euro & especially the pound) are not good for equities. Crazier moves in Brit credit.....nevertheless, VIX move is kind of subdued, which commonly means we ain't seen the worst of the down moves yet.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,213
  • Sep 23, 2022 11:23am Sep 23, 2022 11:23am
Quoting The Fool
Have also taken some of the SPX spreads off at about $10 net (in @$2, out @ $12)......this week is sitting at a net 16% gain over all accounts. The max at risk I think was no more than 3%.
....last of the SPX put calendars off at $13.50. All the call calendars worthless. I had IWM Sep23 $165 puts, guarding the RUT put spread tail risk, and those came of @ 5x. Pretty much flat and thinking about next week.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,214
  • Sep 24, 2022 9:35am Sep 24, 2022 9:35am
Quoting The Fool
{quote} ...a break of 3,650 opens the door to 3,500 in earnings week. The US 2's are @ 4.17% today. Crazy moves in USD strength (against the euro & especially the pound) are not good for equities. Crazier moves in Brit credit.....nevertheless, VIX move is kind of subdued, which commonly means we ain't seen the worst of the down moves yet.
The moves in currencies and yields are extremely unsettling. Also the fact that the fed seems to not understand leads and lags. This blind Volckeresque tightening is extremely destructive and creating a huge global dollar shortage. The irony is that all its really doing is just offloading inflation to other countries. I wouldnt be surprised to see some massive intervention by the CBs of the world to combat their currency destruction vs the dollar. The BOJ actually has already started.

Nice sniper shots on those calenders btw…. Those things are insane when they close on the short strikes
  • #18,215
  • Sep 24, 2022 11:33am Sep 24, 2022 11:33am
Quoting Wulfgar
…. Those things are insane when they close on the short strikes
Thanks, mate. If I keep scoring >10% weeks, maybe I'll be able to bag the day job. Anyway I have a week of vacay coming, heading down to PS/Joshua Tree. Need to catch the last of the crazy heat for the season.

...my take on JPow vs the stock market - I bet Jerome will flinch first, maybe with just a little help from the 10/13 CPI. The next FOMC (just 2 days b4 the midterm elections lol) is a long way out, so Oct could be really volatile, too. If/when the spoos breaks 3,300, then 3,000, the howls from all the talking heads will reach max volume. It'd be nice to get that V-bottom in well b4 the elections. Still the big gorilla in the room is Putin and the Ukraine war. The latter could get better really fast or (more likely) slowly worse and worse, maybe nightmarishly worse....

Happy trades amigo, always nice to hear from you.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,216
  • Sep 24, 2022 12:38pm Sep 24, 2022 12:38pm
Late Friday, I took a shot at setting up SPY & IWM positions - these are hedge positions I use to guard tail risk on SPX and RUT time spreads. SPY Sep 28/30 $381 calendar calls for 55c; same IWM $173 for 42c. I want the calls to hold for Sep30 and be set to wait inside the Sep30/Oct3 SPX and RUT diagonals. I did this surmising a bit of a bounce Monday, so, I could be wrong, but we'll see....If that happens and the move is decent, I will (for instance) get in a RUT diagonal for credit with the short strike out about 1,780 or so. IWM/RUT is an easy pair to trade this way, IWM is always exactly 10% the value of RUT.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,217
  • Sep 24, 2022 1:01pm Sep 24, 2022 1:01pm
the SPY calendar already about 20c in profit. If the market bounces well on Monday/Tues, I might just take the calendars off and use the proceeds to buy something else. If the market drops early, I will roll down the calendars' long legs to mitigate the loss, and go back to the drawing board. Trading is always a gamble, but the goal is to set up trades where a small, well-managed gamble (aka risk) pays off really well....

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,218
  • Sep 24, 2022 4:00pm Sep 24, 2022 4:00pm
Something like the diagonal below to go with the SPY calls. Ideally, I'll set these up so a small credit so the SPX diagonal erases most of the debit from the SPY hedge set. With good entries and sizing, the pair setup becomes a risk-free trade with large upside return potential.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,219
  • Sep 24, 2022 4:46pm Sep 24, 2022 4:46pm
similarly, wit da RUT...

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,220
  • Edited 8:18am Sep 26, 2022 8:05am | Edited 8:18am
will prolly scrap the diagonals and sell SPX verticals @ Sep30 or Oct3. Looking at 3875 calls and 3450 puts (10 delts), would like to get $2.50-$3.00 either end,

Same idea RUT, ~1800+ / 1550-
"If The Fool persists in his Folly he will become wise." - William Blake
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