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Let's Trade Options

  • #18,501
  • Feb 21, 2023 12:00am Feb 21, 2023 12:00am
Quoting Wulfgar
lol Laguna Bach is great. My dad and i used to build sets for the Pageant of the Masters there every year. Good times.
...hey I didn't know what that was, so I had to ask the internet - that really does look like good clean fun....

https://www.visitlagunabeach.com/eve...f-the-masters/
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,502
  • Feb 21, 2023 12:52am Feb 21, 2023 12:52am
A 6-lot Mar3 SPX vert bear calls will bring in about a $900 credit, with the P/L on 3/27 as shown.
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Then, a SPY Feb24/27 $420 call calendar, selling for 10c, has the P/L shown. Your $900 covers about 80 of those. (Knowing me I'd risk some $ and do 100.)
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,503
  • Feb 21, 2023 1:01am Feb 21, 2023 1:01am
The SPX bear call spread funds the SPY calendar, which is positioned to mitigate the tail risk of the former. Ideally, you get the SPY long Feb27 $420 calls to run into the following week, in which case they can cover the SPX spread tail even better. If the long SPY calls run well above $420 on Monday, their profit very much exceeds the loss from the SPX spread, and you close them all at the same time for a healthy gain. I don't think any of the above will happen; I think the SnP will drop on the minutes and Fed yakking. But I will put this on, as well as something similar for the puts. I just want the SPX bear calls to cover the SPY calendar, pretty close, because the latter will likely be worthless. Maybe I'm wrong though - we'll see....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,504
  • Feb 21, 2023 1:25am Feb 21, 2023 1:25am
the other end of the SPX IC is Mar3 $3875/3850 puts x6 @ about $1.65 credit and SPY calendar puts, Mar24/27 $388, 70-75 of those. will be 15-20c debit. All the aforementioned subject to tweaks & change and we'll see what Tues brings. I have similar trades in RUT/IWM and some earnings stuff but will live trade only the above SPX/SPY combo thru the week. I need one a these mofos to pan out in spades.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,505
  • Feb 21, 2023 1:40am Feb 21, 2023 1:40am
if you risk more than you fund with the IC, be prepared to lose that in a doji week. The calendars are sitting out at 4 delta so they only will pay well if we get actual healthy movement. If you place the calendars too far from the IC strikes, you run the risk of running past the calendar short strike and having to close the whole thing early. Using bull vert spreads is another way to do this combo that doesn't have the quirks of the time spread, in fact you can add some to the mix on the outside of the calendar also.....many ways to skin a cat.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,506
  • Feb 21, 2023 8:32am Feb 21, 2023 8:32am
risk off on geopoli ill winds (Putin Stalin), roll that in with expected bearish Fed minutes.....I am leaning super-bear. Watch treasurys and I see the 10-yr nudging 4%....watching the 2-yr also, it can push for 5%. I see spoos printing some big red schlongs and crashing thru that 200 sma, trading sub 3,900 next week....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,507
  • Feb 22, 2023 12:18am Feb 22, 2023 12:18am
Quoting The Fool
.....I am leaning super-bear. ....
...just a little less. I didn't get much put on today, was distracted and decided to wait for the Wed show, get some things on for the CPI. I might try a 1-2 day run, time spreads out to Mondays have been kind of blah.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,508
  • Feb 22, 2023 12:22pm Feb 22, 2023 12:22pm
Set for the week & looking for some moves. I don't have any convictions, though. Could be market shot its bear wad yesterday. We'll see if the FOMC minutes will shake things up some, but maybe all the Fed angst is getting baked in. I am saving bp to sell some SPX verts when I see where the strong side of the market is.

The SPX dbl calendar looks like trouble. I won't be surprised to see spoos stay sideways and sit on 4,000 +/- 50....

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,509
  • Feb 22, 2023 1:43pm Feb 22, 2023 1:43pm
Quoting The Fool
I won't be surprised to see spoos stay sideways and sit on 4,000 +/- 50....
spoos has touched 4,000 in 19 of the last 42 weeks. Nothingburger FOMC minutes - these Fed & inflation-related data releases are losing their ability to freak out the markets.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,510
  • Edited 5:35pm Feb 22, 2023 5:24pm | Edited 5:35pm
Quoting The Fool
......market shot its bear wad yesterday. We'll see if the FOMC minutes will shake things up some, but maybe all the Fed angst is getting baked in. I am saving bp to sell some SPX verts when I see where the strong side of the market is. The SPX dbl calendar looks like trouble. I won't be surprised to see spoos stay sideways and sit on 4,000 +/- 50....
we'll see what Thurs brings but I expect sideways pa around 4,000. If there is no movement early, I'll prob roll the front legs of the SPX calendars out and in, make Feb27 credit spreads from them. I might regain 75% of the debit that way. The strangle I expect a near total loss....

Jobs data Thurs and PCE Fri, but I don't think these things are moving the market any more. The Fed has already come up most of the way with their qt, and whether it's another 50 or 75 bp until they stop is not a big deal for the fomo bulls. Not sure any amount of jawboning from them will help, either.

I'm back to leaning bullish & I'll bet indices will rally thru March.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,511
  • Feb 22, 2023 8:58pm Feb 22, 2023 8:58pm
Quoting The Fool
{quote}we'll see what Thurs brings but I expect sideways pa around 4,000. If there is no movement early, I'll prob roll the front legs of the SPX calendars out and in, make Feb27 credit spreads from them. I might regain 75% of the debit that way. The strangle I expect a near total loss.... Jobs data Thurs and PCE Fri, but I don't think these things are moving the market any more. The Fed has already come up most of the way with their qt, and whether it's another 50 or 75 bp until they stop is not a big deal for the fomo bulls. Not sure any amount...
The market has done nothing to actually show the bears have any semblance of control.... This past impulse wave down without follow through is a pretty clear accumulation signal

Premium sellers are having a field day with vix rising over 23.... What a gift
  • #18,512
  • Feb 23, 2023 2:13pm Feb 23, 2023 2:13pm
Quoting The Fool
{quote}we'll see what Thurs brings but I expect sideways pa around 4,000.
I shoulda knowed better than to set these traps for a move off big round 4,000, with beaucoup puts/calls piled up there ....however, spoos looks like it will try to print a rad bullish hammer for the day. I could see Friday putting in a >1% gainer off a weakening inflation print....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,513
  • Feb 24, 2023 9:47am Feb 24, 2023 9:47am
going flat for weekly trades. SPX 3850 nets $2.25, which is a dime over the cost of the SPX double calendar. I had a set of QQQ double calendars with a net gain. Everything else net loss. RUT double calendars I lost ~40%, etc. If I had traded these the way I usually do, with funding ICs in SPX and RUT, I would have eked out a small net gain ....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,514
  • Feb 24, 2023 9:57am Feb 24, 2023 9:57am
Quoting The Fool
going flat for weekly trades. SPX 3850 nets $2.25, which is a dime over the cost of the SPX double calendar. I had a set of QQQ double calendars with a net gain. Everything else net loss. RUT double calendars I lost ~40%, etc. If I had traded these the way I usually do, with funding ICs in SPX and RUT, I would have eked out a small net gain ....
Spooz got rolled over and spanked this week. Interesting the reaction on the PCE data, considering it should of come as no surprise considering the recent CPI and PPI...

I Dont expect the market to stay down long. Eyes on oil... if it craters, that should be bullish the broad market , and it sure is teetering

Also have eyes on the 10Y .. above 3.93- 3.98% changes the playing field from a tech standpoint, although nothing else has really changed. Its key not to let price change sentiment when macro trading....
  • #18,515
  • Feb 24, 2023 10:12am Feb 24, 2023 10:12am
Quoting Wulfgar
{quote} Spooz got rolled over and spanked this week..
...yep we'll see if it'll bounce off the 200d sma....4 consecutive red daily candles, wow, but ultimately will prob not be $150 total drop for the week ....real capitulation would see single days that large. Also, the day is still young, lol, typical will be we regain >1/2 of whatever is lost by the close.

Anyway, stronger usd and higher Treas yields will keep the bulls in a sideways run imo, still a great environment to sell premium - any big move up will be short-lived and prone to reversal, ditto for the downside....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,516
  • Feb 24, 2023 1:01pm Feb 24, 2023 1:01pm
put-side skew is back for SPX. 10-delta Mar6 puts ask = $6.00, same for calls = $4.30.

I usually sell into the skew.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,517
  • Edited 6:06pm Feb 24, 2023 5:38pm | Edited 6:06pm
Worst week I've had in a while. Shoulda just committed to the vacay, too much distraction. Anyway, near the close I bot some Mar6 SPX 4150 calls for a buck. Looking to leg into a spread on those, so need some upside to start the week. If bear trend continues, I will sell put spreads out a couple weeks into that strength.

Idk, seems like usually if I try legging into spreads I get spanked. But, we had 4 red candles in a row and that seems a bullish invitation, plus next week a light one re: US econ data, and 4,000+ looks doable by Mon-Tues. If I get a nice bull move, I will sell Mar3 4,150 calls for > $1, or something like that.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,518
  • Feb 24, 2023 10:54pm Feb 24, 2023 10:54pm
Zelensky plans to meet with China's Xi on proposed peace plan
https://www.yahoo.com/news/zelensky-...183137842.html

....still the big gorilla in the room. China needs the Eurozone and the USA a lot more than it needs Russia. Well anyway, I hope that's the realization. The Ukraine proxy war could drag on until it spreads like cancer into surrounding States and festers into WWIII, or until Russia implodes, or until there's a settlement. I still think Ukraine will have to give up something, probably Crimea and slices of Donetsk & Luhansk, and Russia gets in the bargain a more unified & expanded and militarized NATO on its doorstep. Some but maybe not all of the sanctions will be let off. Ukraine will join the EU and the >$1 trillion cost of rebuilding it will be the pot of gold at the end of the rainbow. I'm sure China would like a piece of that.

Who knows what will happen?, but I plan on keeping some long otm SPX calls running this year.....if/when the cease-fire is announced, that will be the start of a relief rally for the ages.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,519
  • Feb 25, 2023 2:09pm Feb 25, 2023 2:09pm
Quoting The Fool
...like usually if I try legging into spreads I get spanked. But, we had 4 red candles in a row and that seems a bullish invitation, plus next week a light one re: US econ data, and 4,000+ looks doable by Mon-Tues. If I get a nice bull move, I will sell Mar3 4,150 calls for > $1, or something like that.....
...there's a gap to fill at about 4,080-4,090, looking for a bounce Monday to sell calls into a lotto calendar
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,520
  • Feb 25, 2023 11:28pm Feb 25, 2023 11:28pm
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