Let's Trade Options

Got another bull put vert off at about 70% maxP (Mar SPY $182/179 puts) .... big whoop, it's not enough to counter all my directional plays that are bleeding out in the rangebound pa....moral: sell more premium when you get the chance.

Interesting to know about /ES futures options:

Weeklies (EW, EW1, and so on...) are European Exercise Style, while monthlies (ES trading class) are American Exercise Style.
Also, working hours of the monthlies are +15m from regular RTH close.

...starting to look at April SPY calls - $202/205 bear vert.....big March FOMC up ahead, ....bfd or non-event?

Out of the short put side for .09. Not the way I wanted to end the earnings season, with price on the dance floor of both my CRM naked short call and my BIDU short call spread. May work out next week; who knows ... .

Added a layer:

SPY April 15th 178/182/205/209, filled for 1.06.

I don't like this guy's trading ideas much (he usually states the obvious about where the market's been), but sometimes he points out some stuff: http://dragonflycap.tumblr.com/post/...s-year-in-case

Today was VIX's lowest point so far this year ... . Lol.

The only way to steadily make money selling premium, imo, is to do these setups small and often, either queued up in different expirations or layered on in a single expiration (the monthly), naturally toward the peak of general market volatility if you can. When the VIX ebbs to sub-15, your only choice is to settle for less premium (and risk getting caught in a vol expansion), hand sit, or set up up crap farther out in time (where IV "regularizes") (... which is a total drag; Market Measures suggests setting up short strangles/iron condors in sub-15 environments 100 DTE rather than "forcing" a productive setup at 45 DTE, but this is an awfully long time for me to wait for my candy).

Fortunately, we're not in a VIX sub-15 environment yet (and there, I've jinxed it), so I'm going to continue to crank on these even though VIX has dropped a bit here (now at 19.81) or sell short-term, <14 DTE iron condors in either RUT, NDX, or SPX so that my buying power's not all tied up in longer term setups.

Basically, most of these are $50/contract setups if you take them off at 50% max profit. Naturally, with one contract that isn't all that glamorous or sexy, but it gets more glamorous and sexy as you scale up to 10+ (in, for example, SPY), at which point that's "good money." (Of course, it's not all rainbows and lollipops; you'll have broken setups that you need to manage and such, but I'm largely fine with that ... ).

I'm just slapping stuff on left and right without regard to direction. I've been wrong on long-term direction so many times that I'm actually starting to gravitate toward the TastyTrade camp, which basically says "F direction" ... . Hard pill to swallow after all my spot forex trading ... .

Ain't squat for earnings next week that are $50+ for the underlying and "decent" liquidity/IV wise. The last notable is COST, which hasn't been known for its stellar volatility, so I'll probably pass on that, clean up the crap I've got on now (it's basically a fairly full boat), and then get ready for the next season.

Basically, I think of earnings as an engagement side show; the vast majority of the time, I don't make all that much money because I'm playing these announcements small -- I don't want to be working off some humongous cluster for the next six months because the thing imploded/exploded wayyyy outside the 1 standard deviation. (Still working off a YUM trade from the October earnings announcement; of course, I didn't do it in the most mechanical way, so I'm still goofing around with it, but I don't need more of that kind of thing ... ).

your IC p/l, about 2 bits per dollar for the whole shebang

Jury's still out on that IWM poor man's covered call I initiated back in December. I'm basically at break even with all the credits I've received with rolling, but I'm 60 days or so into the thing, it's a BP hog, and I'm just now at scratch. The long option's in the September expiry, so I still have a ways to go to make it productive, but my thinking is it's too long a cycle for the amount of BP required.

I did originally have an oppositional side set up -- a poor man's covered put, but unfortunately took that off virtually immediately for half the credit received for the short put when we experienced this down turn, thinking that I should play a bit more with just one side of the strategy before making a call as to whether it was a "good substitute" for iron condors. 20-20 hindsight: should have ridden it out, as I would have profited on that side while working the call side. Oh well, water under the bridge ... .

Naturally, for the poor man's covered call, we haven't been in ideal market conditions for it work work out perfectly. For the PMCC, you want the market to either go sideways or up. The diagonal started at 97/115 and now is currently at 97/104, so "down" it's been, and I've been rowing against that stream virtually since New Year's.

The other drawback is that, unlike an IC, once you're in the trade, there's not much you can do to bail on it if you haven't yet worked it to scratch (unless you want to just take the hit, something I'm virtually never willing to do unless it's one of those lottery trades that I knew would, in all likelihood, not work out from the git-go); you're in it for the long haul. With a 45 DTE IC, if it gets to expiry and you have to roll, you can keep the roll on a short leash or long, depending on what suits your fancy, how close to the dance floor it is, etc. The only leash you can shorten or lengthen on the PWCC is the DTE on the short call; you're just kind of stuck with where the long option lies for the lengthy duration of the trade.

That being said, I've got one of these on in USO, which I think is basically perfect for that instrument given the directionality of the play (bullish), the amount of DTE for the long call (Jan 2018), and the price to put it on (something like a 1.70 debit). In other words, PWCC's are fine for cheap directional plays where you can afford or don't mind tying up buying power for substantial periods of time.

Yep. Still picking up pennies off the sidewalk ... .

I feel like a "canner" sometimes ... .

Actually, most of the time ... .

well, if you're making money you can't complain too loud, I have a pretty big hole to fill in Q1 so far....if SPY dithers between $186-$197 for the next couple weeks I will be back close to b/e for the quarter....

I'd like to see how you do this - next time you are rolling out a losing condor please show 'n tell.....everyone is different - I tend to flirt with disaster too often (and occasionally get bit) - a mechanical approach is best, I spec - if you adhere to the latter, what are your "rules"....?

https://www.tastytrade.com/tt/learn/iron-condor

IC management by the TT book....

GLD looking toppy & maybe will slide into the Mar FOMC & monthly opex combo.....always like to find cheap put calendars that will benefit from rising iv....the Mar/Mar4 below modeled with a 10% iv rise

Short vol gotta be, been a long wait...

http://www.usatoday.com/story/money/...port/80867316/

....meanwhile, UNG dipped to $6.13 on Friday....