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Let's Trade Options

  • #19,501
  • Mar 19, 2024 10:32am Mar 19, 2024 10:32am
Quoting The Fool
the 85/82.5 is 4x more expensive than the 80/77.5, so a 20-lot vs a 82 lot. The cheaper, larger trade outperforms, reaching $2k profit at about $83.10, compared to $80.20 for the 20-lot.
I guess you make money if the PUT you sell never comes into money, but I would think if price is not expected to go below $83, you would make more money on the 85/82.5 spread because of the 85 PUT being deeper in the money and hopefully holding the 82.5 until expiration and hope price never gets that low? Or do you have to close both sides of the spread at the same time?
  • #19,502
  • Mar 19, 2024 10:48am Mar 19, 2024 10:48am
Quoting moneymaker2
I am actually going to watch these in the morning to see about really getting in, though.
Wasn't at my computer for the opening, but I tried to get in on KNX from my phone, but they wouldn't split the Bid/Ask price either, so I missed that one....
  • #19,503
  • Edited 2:34pm Mar 19, 2024 12:15pm | Edited 2:34pm
Quoting moneymaker2
{quote} I guess you make money if the PUT you sell never comes into money, but I would think if price is not expected to go below $83, you would make more money on the 85/82.5 spread because of the 85 PUT being deeper in the money and hopefully holding the 82.5 until expiration and hope price never gets that low? Or do you have to close both sides of the spread at the same time?
The max profit of any $2.50-wide vertical will be the same, i.e., $2.50 less the debit paid for entry - the smaller the debit, the faster you get into profit. You can try to play the trade to expiry, where the short leg could be otm, and the long itm. I do that with diagonals - (front leg short, later back leg long). If I were going to pay a vertical as a directional trade only, I'd be looking at exiting earlier than later, as the b/e gets further away from you as time goes by.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,504
  • Mar 19, 2024 4:04pm Mar 19, 2024 4:04pm
Been doing yard work all day before the rain comes in on Thursday so haven't been at the computer. But just checked it and got an alert. So let me show you how weird options can be sometimes and why it is important to always try to split the Bid/Ask:

AER Apr18 85 PUT was trading at the close yesterday at $1.75 Ask price with the stock price of $86.26.

So I put in a Bid of $1.70 from my phone this morning, but I saw the stock price was moving down, as expected, so I didn't think much about it since it was a day order and not GTC.

Just checked the computer and had an alert my order was filled. Price of the stock at that time was trading roughly $85.88, something like that. Now, logic dictates that when the stock price drops closer to the strike price on a PUT, the PUT option becomes more expensive, right? Yet the price dropped from $86.26 to $85.88 and the price of the option went DOWN when the Bid/Ask was split, but actually traded higher when the stock popped back up to about yesterdays close.

Always best to be at the computer when you trade soot that you have good control over your trades. This one worked out okay, but sometimes you can miss a trade because you aren't there to manipulate your Bid price as needed.
  • #19,505
  • Mar 20, 2024 9:43pm Mar 20, 2024 9:43pm
I will most likely get out of the REAL AER Apr19 85 PUT tomorrow. I didn't like how the spread widened to $0.35 and no one would come off the Bid price during the day. I should have be able to get out at least at $1.95 today, but nothing moved it. I don't like stocks that play games with option spreads like that. When a stock is headed towards or right at in-the-money, you should start seeing some movement in the Bid/Ask prices. None on this one, so I'll get out and find something else with the real money.
  • #19,506
  • Mar 21, 2024 10:20am Mar 21, 2024 10:20am
Quoting moneymaker2
I will most likely get out of the REAL AER Apr19 85 PUT tomorrow. I didn't like how the spread widened to $0.35 and no one would come off the Bid price during the day. I should have be able to get out at least at $1.95 today, but nothing moved it. I don't like stocks that play games with option spreads like that. When a stock is headed towards or right at in-the-money, you should start seeing some movement in the Bid/Ask prices. None on this one, so I'll get out and find something else with the real money.
With the pop up today, that made the weekly chart look good for a move down, and since I have a month left, I'll hold on for a little bit and see what the weekly chart does. But, the spread tightened to $0.10 and then settled at around $0.20....I can live with that.
  • #19,507
  • Mar 21, 2024 11:52am Mar 21, 2024 11:52am
Quoting moneymaker2
{quote} With the pop up today, that made the weekly chart look good for a move down, and since I have a month left, I'll hold on for a little bit and see what the weekly chart does. But, the spread tightened to $0.10 and then settled at around $0.20....I can live with that.
I'll hold what I have for comparison, but I wouldn't have taken a short position in this market. Indicators can scream "overbought" for weeks/months....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,508
  • Mar 21, 2024 1:53pm Mar 21, 2024 1:53pm
Quoting moneymaker2
Trade #2 KNX Apr19 52.5 CALL at $2.10 {image}
I know we didn't do a comparison on this one, but I would have gotten out when KNX hit resistance on the 10EMA (~54.25), which put the Bid price $2.70, so a $0.60 profit, or $600 with 10 contracts.
  • #19,509
  • Mar 21, 2024 2:05pm Mar 21, 2024 2:05pm
I use Omnitrader as a charting platform and have for decades. I lover it! But I changed over to the 2021 version mid-October and somehow my indicator that I tweak a little just doesn't seem to look right. I can't put my finger one it, just just looks off, not moving like is expected with price. I am just not getting as many of the "good" overbought/oversold indications as I normally do;; it seems to be more middle of the band now rather than extremes. Maybe it is just this bull market we've been in for a few months, I don't know....

I'll have to look at my adjustments on the newer one to make sure I didn't mess something up. I think I have an older version on one of my laptops, so I have to update it and check it out. I guess I'm just used to having more options to trade (no pun intended) than I have lately.

Although, it wouldn't be the first time something was "improved" and would up not being as good as the older version...(New coke, Microsoft Vista, Beta Max, etc.)
  • #19,510
  • Mar 22, 2024 12:07am Mar 22, 2024 12:07am
Quoting moneymaker2
I use Omnitrader as a charting platform ..... I think I have an older version on one of my laptops, so I have to update it and check it out.
Geez, it's been 6 months since I've used this particular laptop...it's gonna take me a week just to install all the Microsoft updates!
  • #19,511
  • Mar 22, 2024 3:38pm Mar 22, 2024 3:38pm
I have a collection of laptops and desktops going back almost 30 yrs. I have kept some of them because I still have engineering software that I might run occasionally - stuff that is on a floppy disk that needs to run on a Windows 95 machine. Back in olden times, you bought software like that and you owned it. Upgrade when desired. Now, everything is on a subscription. Newest versions probably won't run on an old pc with an obsolete OS. Not for long, though. I took a truckload of that stuff to the dump last year. The rest to follow soon. I wonder if any of the old software stuff is worth anything on ebay....?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,512
  • Edited 9:37pm Mar 22, 2024 5:30pm | Edited 9:37pm
RUT down 1% today. I have a feeling will drop in the coming week. In fact, all the indices are looking toppy to me. Notwithstanding super-Dove JPow. It's time to blow a bit.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,513
  • Mar 22, 2024 10:49pm Mar 22, 2024 10:49pm
Quoting The Fool
I have a collection of laptops and desktops going back almost 30 yrs. I took a truckload of that stuff to the dump last year. The rest to follow soon. I wonder if any of the old software stuff is worth anything on ebay....?
I would think some of the old floppy drives and things might be worth something. Or old games. Heck, most people less than 30 years old don't even know what a modem connecting sounds like!

You should look on youtube about reclaiming the gold from old computer internals. I know a guy that did that when everyone was swapping desktops and laptops around the Windows XP-Vista-7 time frame and people would go on Computer Shopper and buy the components and build their own desktop. He made close to $10K...but that was when there were a lot of plug-in connections on one board and he had a butt load of internals, too, so there's that....
  • #19,514
  • Edited Mar 26, 2024 1:25pm Mar 25, 2024 4:37pm | Edited Mar 26, 2024 1:25pm
Not much out there from my perspective, but I'll be looking at the following at the open:

COP Put
CTSH Call
LULU Call

I may even try an at-the-money on LULU, but it will be pricey....
  • #19,515
  • Mar 25, 2024 11:25pm Mar 25, 2024 11:25pm
Quoting moneymaker2
Not much out there prom my perspective, ....
NVDA up >10% in the last 5 days...>twice the volume of SPY and almost 2x as large. MSTR up 35% since last week, up 22% today. SMCI up 20% since last week, up almost 9% today alone. Some of these megacaps are doing all the heavy lifting to keep the market bullish to sideways. This is a market to btfd, it will keep going up until something gets in the way. Probably next chance of that is Q1 earnings, a month out.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,516
  • Mar 26, 2024 1:30pm Mar 26, 2024 1:30pm
Well, it was a busy morning today, I had to chase a couple but got in the following:

COP Apr19 125 PUT at $1.92

CTSH Apr19 72.5 CALL at $1.40

LULU Apr12 390 CALL at $6.75

I was hesitant of the LULU trade, because $6.75 is a lot to pay for an option, but the charts are saying it loos set to move up by then, and to get in as close to in the money as I wanted to pay, I had to go Apr12 and 390. It should make good money if it goes up to around $410, but I still hate paying over about $3 for an option.
  • #19,517
  • Edited 2:50pm Mar 26, 2024 2:19pm | Edited 2:50pm
Never short a dull tape....SPX stuck in a 20pt range for 2 days. But, no trade Friday, but PCE out that day, and quarter end effectively, Thursday. Could see a big gap after the long weekend?
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,518
  • Mar 26, 2024 4:26pm Mar 26, 2024 4:26pm
Okay, back at my computer and I had a couple of alerts waiting for me:

Out of the following:

MMM Mar28 103 PUT at $0.95 down from $1.21
My chart has this pretty much played out, so I'll take a small loss rather than risk a bigger loss on a small profit.

In the following:

FDX Apr12 280 PUT at $1.25
That was a little Hail Mary bid that got hit, so I'm okay with that.
  • #19,519
  • Mar 27, 2024 6:06am Mar 27, 2024 6:06am
Chris Vecchio is the best trader they have, imo.
Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19,520
  • Edited 1:00pm Mar 27, 2024 12:03pm | Edited 1:00pm
Okay, back at my computer and a nice surprise:

Out of LULU Apr12 390 CALL at $10.10 up from $6.75

Didn't expect it to get hit this morning before I got back, but it jumped up for some reason right at the open.

But it still looks really good, so I'm in the following:

LULU Apr12 387.5 CALL at $8.35

I think that is the most I have ever paid per share for an option.....lets see if it's gonna be worth it.
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