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Let's Trade Options

  • #13,701
  • Jun 26, 2016 2:14pm Jun 26, 2016 2:14pm
Quoting The Fool
{quote}I heard that. I remember. I have other ways to trade volatility that are safe and really quite a bit more lucrative. However, if I had the big accounts, I would be always looking to sell it way way out on the curve....something like Aug SPY $219 calls naked short, sell for 22c & let it die to <5c, do that once a month or so to keep the mistress in new shoes, etc
I have frequently got the feeling that I'm picking up nickels and dimes off the sidewalk (I don't bother with pennies) with some of these premium selling setups, particularly after shelling $$$ over to my broker for fees/comms. Moving into SPX and RUT, though, I've moved up to quarters ... . Lol.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,702
  • Jun 26, 2016 2:20pm Jun 26, 2016 2:20pm
Quoting ZebraSquirl
{quote} I also spent quite a bit of time churning through their videos. It takes a bit of watching to mine the nuggets, but after a while, it begins to sink in ... . Once the content gets repetitive (it eventually does), quit watching and start trading. Keep in mind that the TastyTrade approach is largely focused on nondirectionally biased "premium selling" setups -- short strangles, iron condors, short straddles ... . I would start with Ryan and Beef's WDIS...
Hey, good review zeebs, thanks for that. I never look at dough anymore, and I just occasionally spend time on the TT content. I get emails from them everyday and I follow up on something in those maybe 10% of the time.

I'm with you on "start trading": there are so many different strategies, so many things to know in terms of trade management, you just have to dive in. Just like riding a bicycle, the manual and how-to videos are not gonna help you all that much when the rubber meets the road.

If you have a limited time to study, I would recommend looking at the Greeks, all different types of spread trade setups, and any good trade management narratives. You don't actually need to have a trade P/L analyzer to trade options - I've never seen the ToS analyzer page even once in any of the TT vids. But, if you are going to trade time spreads, I don't see how you could do without one.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,703
  • Jun 26, 2016 2:37pm Jun 26, 2016 2:37pm
SPX setups I did since transitioning over from SPY. These all started out as $10 wide-winged "classic" iron condors with a max profit potential of about $280-$320 or so, a BPE of about twice those figures, and contract sizing of about 1 contract/$10k of account value:

Closed 5/10: $230.52 net profit/contract.
Closed 6/15: $150.32 net profit/contract.
Closed 6/24: $158.80 net profit/contract.

Three trades not exactly a "hugely long track record" (to say the least), but beats those $50/contract SPY jobs where the ratio of fees/comms to profit is much higher ... . So if you've got portfolio margin value to throw around, these could add up to a "decent living" based on a relatively small number of trades/month and a minimum exposure to the market (<10% total equity) (check back with me in a couple of years and 100 trades later as to whether I still think that way; you can get bogged down in one broken setup that sucks on buying power for relative "eons" ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,704
  • Jun 26, 2016 2:39pm Jun 26, 2016 2:39pm
Quoting The Fool
{quote}Hey, good review zeebs, thanks for that. I never look at dough anymore, and I just occasionally spend time on the TT content. I get emails from them everyday and I follow up on something in those maybe 10% of the time. I'm with you on "start trading": there are so many different strategies, so many things to know in terms of trade management, you just have to dive in. Just like riding a bicycle, the manual and how-to videos are not gonna help you all that much when the rubber meets the road. If you have a limited time to study, I would recommend...
Plus, you've got incredibly, well educated resources right here ... . Always available to answer most questions ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,705
  • Jun 26, 2016 4:38pm Jun 26, 2016 4:38pm
Quoting ZebraSquirl
Plus, you've got incredibly, well educated resources right here ... . Always available to answer most questions ... .
lol - sure...(I'd trade luck for education any day....)
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,706
  • Jun 26, 2016 5:07pm Jun 26, 2016 5:07pm
I thought this might be of interest...

I realize people have their own special trading techniques for choosing entry and exit points,
but I found a website with a decent discussion about selling covered calls. I took a screenshot,
'cause that's how I kill time. :nerd:

Attached Image (click to enlarge)
Click to Enlarge Name: 2016-06-26 - SELLING COVERED CALLS - Stanberry Research dot com.png Size: 60 KB


Something about "generate an incredible half-million dollars in income in just a single year"
got my attention. The idea of buying a vacation home in Tahoe didn't exactly turn me off, either.

Anyway, the link is at the bottom of the image, or you could click here.
HELL IS EMPTY, ALL THE DEVILS ARE HERE. -- Shakespeare
  • #13,707
  • Jun 26, 2016 5:17pm Jun 26, 2016 5:17pm
Quoting blunderbuss
a website with a decent discussion about selling covered calls.
Thanks, not my cup of meat, but anybody who wants to carry a satchel full of equity shares should know how to use that equity as a basis for options trading....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,708
  • Jun 26, 2016 5:18pm Jun 26, 2016 5:18pm
/ES sliding, looking to break 2,000 early.....hoping for an interesting week.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,709
  • Jun 26, 2016 5:23pm Jun 26, 2016 5:23pm
Quoting The Fool
/ES sliding, looking to break 2,000 early.....hoping for an interesting week.....
yeah, staying up for a bit to see if there is any action early. also watching some gold..
  • #13,710
  • Jun 26, 2016 5:28pm Jun 26, 2016 5:28pm
Quoting ZebraSquirl
{quote} I also spent quite a bit of time churning through their videos. It takes a bit of watching to mine the nuggets, but after a while, it begins to sink in ... . Once the content gets repetitive (it eventually does), quit watching and start trading. Keep in mind that the TastyTrade approach is largely focused on nondirectionally biased "premium selling" setups -- short strangles, iron condors, short straddles ... . I would start with Ryan and Beef's WDIS series; they have a pretty systematic approach. The other series to plow through that are...
Thanks for the info ZB. I watched some tutorials and they were pretty good. Such a variety of availability. Quite interesting and will take time to adsorb.
  • #13,711
  • Jun 26, 2016 7:14pm Jun 26, 2016 7:14pm
Quoting blunderbuss
I thought this might be of interest... I realize people have their own special trading techniques for choosing entry and exit points, but I found a website with a decent discussion about selling covered calls. I took a screenshot, 'cause that's how I kill time. :nerd: {image} Something about "generate an incredible half-million dollars in income in just a single year" got my attention. The idea of buying a vacation home in Tahoe didn't exactly turn me off, either. Anyway, the link is at the bottom of the image, or you could...
I do "a little bit" of that, but do it primarily in accounts that I can't or practically don't want to mess with much (i.e., the all-SPY covered call retirement IRA). It's a good way to insulate yourself from some market down turn, while at the same time reducing cost basis in your shares. However, it is fairly buying power intensive, holding shares in an underlying, which is why I don't necessarily like the strategy for the short-term trading account. After all, holding 100 shares in SPY that you bought at 180 (that's $18k worth of SPY) isn't exactly chump change (which points out the drawback of the strat for most; to do one covered call, you have to buy or have 100 shares of the underlying per short call ... . A $10 underlying is one thing; a $100 one quite another ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,712
  • Jun 26, 2016 7:16pm Jun 26, 2016 7:16pm
Quoting The Fool
{quote}lol - sure...(I'd trade luck for education any day....)
The thing about luck -- it's totally equal opportunity ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,713
  • Jun 26, 2016 7:35pm Jun 26, 2016 7:35pm
VIX junkies -- a little time saver if you like to watch the VIX futures for backwardation (as I'm doing here). http://www.vixcentral.com/

In a nutshell, things like VXX, UVXY, and SVXY are in contango (or, in the case of SVXY, inverse contango) about 80% of the time. The other 20% of the time, they are in backwardation. If you're looking for an "assist" from contango in your setup, well, backwardation can get in the way of that when it occurs, particularly if it's right around the expiry of your setup, since all of sudden your mean reverting play is going the other way by operation of backwardation right about when you were planning on taking it off in hefty profit ... .

Looks like a touch of backwardation is occurring here; as usual, it is likely to be "brief" in duration ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,714
  • Jun 26, 2016 9:42pm Jun 26, 2016 9:42pm
Okay, screw it. I just can't find a satisfactory setup to play the mean reversion in VIX via options, so I'm just going to buy XIV or SVXY shares outright at some point here and go with the inverse contango flow ... . Ain't sexy, but it's not on a clock ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,715
  • Jun 26, 2016 9:44pm Jun 26, 2016 9:44pm
Yikes. Euro breaking 1.10, down nearly 100 pips ... . Finally, parity within striking distance ... .

Cable, down major, breaking 1.34.

So, even though /ES isn't breaking horribly down here right now, when London opens, it could be further blood and gore ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,716
  • Jun 26, 2016 10:20pm Jun 26, 2016 10:20pm
Quoting ZebraSquirl
Okay, screw it. I just can't find a satisfactory setup to play the mean reversion in VIX via options, so I'm just going to buy XIV or SVXY shares outright at some point here and go with the inverse contango flow ... . Ain't sexy, but it's not on a clock ... .
...yeah, a real uphill battle trying to use VXX and UVXY to short the vix. I am watching XIV for something near $15...we might see something towards $10, who knows...?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,717
  • Jun 26, 2016 10:27pm Jun 26, 2016 10:27pm
Quoting The Fool
{quote}...yeah, a real uphill battle trying to use VXX and UVXY to short the vix. I am watching XIV for something near $15...we might see something towards $10, who knows...?
Fireworks are fun ... as long as you don't blow your fingers off.
  • #13,718
  • Jun 27, 2016 1:08am Jun 27, 2016 1:08am
HERE WE go for the day after the day after....to btfd or not to btfd....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #13,719
  • Jun 27, 2016 3:40am Jun 27, 2016 3:40am
Quoting The Fool
{quote}...yeah, a real uphill battle trying to use VXX and UVXY to short the vix. I am watching XIV for something near $15...we might see something towards $10, who knows...?
XIV heading your way at the moment. You may succeed. VIX holding its ground; then sum.
  • #13,720
  • Jun 27, 2016 3:49am Jun 27, 2016 3:49am
Quoting peterdrill
XIV heading your way at the moment. You may succeed. VIX holding its ground; then sum.
I am really a cheapskate....that's why I trade options....I will need to see XIV take a deep dive before I commit to tying up some money in those notes, certainly $15 if not lower...
"If The Fool persists in his Folly he will become wise." - William Blake
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