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Let's Trade Options

  • #18,921
  • Oct 4, 2023 1:30am Oct 4, 2023 1:30am
been a long time, but they're back, and they brought the volatility, the Bond Villagantes

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....selling 10delta SPX verts @ 19dte for $2 or better...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,922
  • Edited 12:53pm Oct 4, 2023 12:34pm | Edited 12:53pm
THIS was today's 1dte fly. In for 17c, out for 7c - a 10c loss. I am losing money on these, so far. I note....

1) you need to be good at picking direction in a 1-day window. You can play both sides but it will make it harder to stay above water.
2) you set them up with a max payout of 9-11%, but it will be hard to get that, and can only be done when price cooperates in the last hour or so before expiry
3) theta decay accelerates in the day, so if there is decent profit, it will probably be best to take it by 1:00 PM NYT....you can take off some/most & let the rest run to a perfect finish chance
4) important to manage losers, because there will be a lot of trades that go on for 15-20c, that you can take off for 50% loss. If you let all losers run to full loss, your winners might not be enough to keep you above water.
5) putting the trades on near the end of Day 0, you should be thinking about whether you will get some help overnight. Or also, whether there may be overnight news that could go against you.

I might try Oct5 XSP 427/429/431 today if I can get in @ <$0.20....might get some bull action overnight but also we might just flatline ahead of NFP.

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,923
  • Oct 4, 2023 3:23pm Oct 4, 2023 3:23pm
Quoting The Fool
I might try Oct5 XSP 427/429/431 today if I can get in @ <$0.20....might get some bull action overnight but also we might just flatline ahead of NFP.
....held off and will play it tomorrow for NFP day
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,924
  • Oct 4, 2023 8:49pm Oct 4, 2023 8:49pm
Quoting The Fool
{quote}....held off and will play it tomorrow for NFP day
too good to be true? We shall see. The 30-lots XSP fotm on the outside wings I'll do with 3x SPX. If you get a big enough move to trigger those into good profit, those can come off early. Large potential r:r on these if you get a run well past the daily em on either side...on a volatile day you might realize positive returns on both sides.....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,925
  • Oct 5, 2023 8:31am Oct 5, 2023 8:31am
I don't think the bond vigilantes are done. October is a popular season for capitulation moves - maybe a big miss @ NFP will get the avalanche started.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,926
  • Oct 5, 2023 3:44pm Oct 5, 2023 3:44pm
XSP flys for NFP Friday....there's some SPY long puts/calls out on the outside wings, hedging tails. People on TV said it'll go down unless it's a Goldilocks number.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,927
  • Oct 5, 2023 3:52pm Oct 5, 2023 3:52pm
similarly, doubled up on RUT, not that large, with IWM hedging
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,928
  • Edited 5:51pm Oct 5, 2023 5:22pm | Edited 5:51pm
The Bank Panic of 1907, the Stock Market Crash of 1929, and Black Monday 1987 all happened during the month of October. Historically speaking, however, September has had more down markets than October.

October often called a "bottoming" month, making way for the rebound into a "Santa rally."

No guarantees this time. If bond yields keep rising, stocks will be sliding, and the Fed will not come to save us....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,929
  • Oct 5, 2023 6:12pm Oct 5, 2023 6:12pm
Hey, TF and everyone else, hope everything is going well for everyone. I think I've decided to come back to FF rather than the other boards I've been on. The others have very little interaction and when it is, it just seems to be people hounding you for your system or telling you that you can't make money the way you trade, even though they are following your trades real time. Probably just a bunch of young whippersnappers posing as traders when they are actually investors. Anyway, just not as fun over with those, so I think I'll be spending most of my time back at FF posting some of my trades.
  • #18,930
  • Edited Oct 6, 2023 9:23am Oct 5, 2023 6:30pm | Edited Oct 6, 2023 9:23am
That being said, I'm going to be looking at the following in the morning:

MMM Oct27 93 CALL at $1.00 or better


Should be good for a nice little pop up shortly. I was hoping to check it out before the close today, but didn't make it in time. If stocks move lower in the morning, should be able to pick it up cheaper, or even get the 91/92 PUT at a good price. But most likely, the 93 CALL is going to be the best price.
  • #18,931
  • Oct 5, 2023 8:28pm Oct 5, 2023 8:28pm
hey mm2, welcome back & feel free to post your trades. Above, you are buying the puts? I assume you know MMM has earnings out 10/24? and it's on a hard slide since mid Sept? just curious about your rationale for the trade. Actually, in the next couple weeks anyway, I think there's a good chance you could do well shorting almost any stock...

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,932
  • Oct 5, 2023 8:34pm Oct 5, 2023 8:34pm
some of the youtube channels I check out regularly.....

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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,933
  • Oct 5, 2023 8:37pm Oct 5, 2023 8:37pm
Quoting moneymaker2
so I think I'll be spending most of my time back at FF posting some of my trades.
....mm2, what do you think about the whole 0dte options trading craze?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,934
  • Oct 6, 2023 9:36am Oct 6, 2023 9:36am
Quoting moneymaker2
That being said, I'm going to be looking at the following in the morning: MMM Oct27 93 CALL at $1.00 or better Should be good for a nice little pop up shortly. I was hoping to check it out before the close today, but didn't make it in time. If stocks move lower in the morning, should be able to pick it up cheaper, or even get the 91/92 PUT at a good price. But most likely, the 93 CALL is going to be the best price.

When I got on here to update today, I noticed I had written PUT instead of CALL, my mistake. Correct price (93 PUT is over $6) just PUT instead of CALL, so I corrected the post.

Anyway, I was able to get into a little better pricing because of the dip this morning:

MMM Oct27 91 CALL at $1.12 average

Not much more than I was expecting for the 93 CALL, but a $2 better strike, so I'm happy with that. It should be good for some spending money.
  • #18,935
  • Oct 6, 2023 9:39am Oct 6, 2023 9:39am
Quoting moneymaker2
{quote} When I got on here to update today, I noticed I had written PUT instead of CALL, my mistake. Correct price (93 PUT is over $6) just PUT instead of CALL,
...That's what I thot happened....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,936
  • Edited 10:09am Oct 6, 2023 9:48am | Edited 10:09am
Quoting The Fool
XSP flys for NFP Friday....there's some SPY long puts/calls out on the outside wings, hedging tails. People on TV said it'll go down unless it's a Goldilocks number.
took off the put flys above early....XSP was near 3x, SPY put hedges made a few centavos, RUT was small profit......hanging on to the call side trades for a bounce into better than be. Downside move was not big enough to get really good profit early, so this combo trade will probably lose money, maybe approach small profit if the indices will rally hard early, we'll see......

I guess if we do make a green day the market fears recession more than it fears the Fed, or, good news = good news.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,937
  • Oct 6, 2023 10:13am Oct 6, 2023 10:13am
looks like maybe October bottom will be 4220? Is Goldilocks still alive? I suggest at least a rally week coming & a good bounce off the 200dma.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,938
  • Oct 6, 2023 10:28am Oct 6, 2023 10:28am
Quoting The Fool
{quote}took off the put flys above early....
...after a week of trading these, I am underwater but not by very much. Some takeaways....

1) I remember what I don't like about trading flys - they are commission hogs.
2) it'll be tough to make good money unless you get a solid move into the max profit zone of the fly at least 2-3 trades out of ten. Because there are gonna be some dogs if you trade every day. Trading bi-directionally just puts you deeper in a hole.
3) Given rapid theta decay thru the day, you need to manage out of the trade early if it's not a solid winner. The longer you wait for a fat finish, the more theta eats at the profit you do have. This makes trading these 0dte or 1dte flys pretty dicey. If you have good numbers you can take part off early and wait on the rest...

Given the above & my poor results, I'd say trading these is maybe not my cup of tea, but something to have in the quiver for days when you can easily forecast big moves. Ironically, since 0dte options have taken over the big index options, there has been a dampening effect on volatility - in other words, big moves are constrained by all the 0dte volume.

You would've thought NFP could produce some good movement, especially with a big beat like what printed today, but here we are again, working on a doji. 5-minute chart looking bullish though, so we'll see.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,939
  • Oct 6, 2023 10:37am Oct 6, 2023 10:37am
Quoting The Fool
{quote}took off the put flys above early....XSP was near 3x, SPY put hedges made a few centavos, RUT was small profit......hanging on to the call side trades for a bounce into better than be.
...took off all the call XSP flys @ be +2c....lol, the trade made a profit on both ends. If the RUT call fly could be then it'd be an ok day....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18,940
  • Oct 6, 2023 10:44am Oct 6, 2023 10:44am
this is the dicey part of trading time spreads - it's the same for diagonals, calendars, and flys when you are in expiry day - you run into the profit zone, just barely, & have to decide to salvage the trade or hang on for a really good finish, all the while the theta clock ticking against you. Best is to have enough numbers to take some off early and hold on to the rest.....
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"If The Fool persists in his Folly he will become wise." - William Blake
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