Let's Trade Options

sell a put spread to fund a call calendar....this is likely my choice.

or go 2 weeks out, on the other side of the July FOMC. July rate hike fantasies are all about.

I had SPX calendar puts, July23/24 5485, set up to catch index impact from TSLA & GOOGL earnings yesterday. (Also had same calls at 5640.) Both went on for $2.30. Both spreads gave up the long strikes to run today. Happy close this AM at $15 for the puts...just a handful, but enough to sweeten the week.

With SPX down 85 at 1040, I turned around and bot Jul24 5520 calls for a dollar. Need to see that lunch bounce....

well, that didn't work.

I bot a bunch of $226 IWM Aug 29 calls, for 50c, will look for a bounce tomorrow to maybe verticalize them

IWM calls worth about $1....will sell 1/2 and hold the rest for a big move north off PCE.

TLT Aug30/Sep20 calendar calls for 13c. The Sep FOMC is 9/18....

PCE was not a big mover, although all indices are well up. Will close the rest of IWM calls for 80c, or hold for a nice move early Monday

looking for tech stocks to spur a hefty rally next week

An outsized weekly range for IWM is $15....could see that this week, maybe a run to $240+....need some good earnings and the predictably dovish Fed. Doable. Much less likely but arguably needed is a rate hike Wednesday. In which case we could see an historic bull reaction. Or might markets see this as a negative omen? Idk, but worth having some ratios or long calls ready on all indices for Thurs-Friday.

in for $1 out for $8 or better if the Russell will bust a move to close the week.

Hi there, I've been a bit more on the sidelines over the last week or so, a few trades here and there, as I mostly stay away from earnings. This has given me opportunity to take a good look at calendar and diagonal spreads. Put a small Meta trade on yesterday that really showed me the process of how these can play out well, of course could have gone either way. It seems these really shine during earnings and news events, I don't see much of an advantage when volatility is low, probably obvious to most option traders, but something worth me doing the work on myself. Anyways, here's the Meta setup I took. I also have a DIS setup that I am studying that I will post, have a question for you on, would love to get your input.

Here are the DIS charts in question, it's a double calendar spread. One chart is ITM spread, the other OTM. They are practically identical, I'm wondering if you have any thoughts on one versus the other. The most obvious to me would be risk of assignment for the ITM.

thought about taking off a bunch yesterday for about $2.50, now it's looking rough, >5% swing today, off what, a weak ISM? Sheesh.... Shame on me though, I should took that healthy profit, at least partially, but I succumbed to greed....

IS BTFD DEAD? Betting $90 on a Monday bounce...I don't really like flys, but in elevated iv's, and for scalping m/l, they my go-to.

a few observations re: calendars and diagonals:

- both benefit from rising iv's. Be sure to watch iv's through the life of the trade. This is important if you use the analyser. Especially on call spreads, the profit profile will decrease (usually) if price moves up into the profit zone, because the iv's of the options have decreased correspondingly.
- If you can put on these time spreads in situations, where you know iv's will rise to the short strike date, that'll generally be the best approach. So, generally, put spreads will do better than call spreads. You can look for iv rises around scheduled events - like earnings. Also, big news releases, election days, etc.
- the temptation with calendars and diagonals is to hold them til near or at expiry, because that's when you can get the best profit. However, I'd say you will have better outcome over time if you avoid this, because things get really dicey nearing expiry, and a profitable trade can be greatly diminished or wiped out in a day. If you put on good numbers, take off some for good profit when it's there, and leave some to try for the expiry windfall.
- double calendars, double diagonals - yes, these can increase odds of profit, but they may decrease overall profit also, since it's more expensive to double up. You can even add fotm options to protect the tail risk of the spreads. All of the above can work, but, sometimes it'll be hard to make a profit after spending so much money from the outset.

lots more pleasant to trade options when there is some vol - looking at selling some RUT premium to fund long RUT deltas

Friday's drop in the Nikkei the largest since 10/19/1987 - Black Friday. Will it continue to Black Monday tomorrow, will the panic spread to US indices? or will we get a bounce?

LOOKING out to next week, CPI Wed could be a mover....well, every day is a move now but I expect that to settle down a bit.