The Options Thread

In spite of the pop in VIX today, we're still in contango, so it could naturally go lower ... . That being said, I'm a "money, taker, runner" with that stuff. The market likes to strip the ball out of your hands right on the goal line ... .

Opening: X Feb 17th 23.5/32/32/40 iron fly for a 3.81 credit. Will shoot for 25% max on vol contraction, although I'm naturally willing to shoot for more if it doesn't move much.

Opening: VIX May 17th 16/19 short call vert for a .77 cr. Farther out in time than I like to go and will may regret it in short order ... . Lol.

Went as high as $34 post-announcement, but settled back to low bid 32.01, high ask 32.4 in after hours. Going nowhere will be bueno for my fly if price hangs around in this neighborhood rolling into NY open ... .

I axed them at TW if they had any weird maint margin requirements for index options trades & they said no, sent me the link to their margin requirements for various trades. Sold some cans & sent them a big fat check....

https://tastyworks.desk.com/customer...ments/articles

Fantastico ... . I pushed off dicking with it until at least Feb opex, which is the earliest I can see being totally flat at this point, although I probably am really looking at March or later ... .

Added benefit to me: you get to "guineau pig" it. Thought I was going to be the one doing that ... . ("You go first." "No, you go." "No, you, by all means ... ").

Sure, no problem. Now I just need to learn how to trade....

I'd lend you my Magic Eight Ball and "Lucky Monkey," but they're in use ... .

Money, take, run:

Covering: X Feb 17th 23.5/32/32/40 iron fly for a 3.14 db; in for 3.81 yesterday; out for 3.14 today; $67 gross profit/contract.

Was hoping that FB IV would ramp up into earnings ... . No such luck. Currently at 30.8% -- not high enough for me to play.

they won't let me open the platform until my check clears, could be a while. No play money accounts?

Mmmm. Sounds "exclusive" ... . The old "I'll show you mine if you show me yours" routine.

Bad advice in part; good advice in part; hiding the ball in part. http://finance.yahoo.com/news/volati...213649448.html

The good part: cover your stock/equity positions with short calls. This will smooth out your P&L somewhat and protect you -- albeit not completely -- from down side risk while reducing cost basis in your shares. Unfortunately, they don't want to "share their secrets" right up front about "where" to sell those short calls (strike, expiry), so do some research as to where you should sell those (I generally sell the 20 delta short call to cover in the monthlies; others are slightly more aggressive and sell the 30; to a certain extent, it depends on what you're doing with an individual position (i.e., are you looking to reduce cost basis over the long-term or looking to get called away)).

The bad part, depending on what they're saying: buy calls here because they're "cheap." One of their recommendations is to liquidate a portion of your shares and buy long calls instead. As I've repeatedly said here and in my Trading View posts as NaughtyPines, buying and holding shares is extremely capital intensive as compared to an options position that "synthetically" represents long stock. When I do a play like this article appears to be recommending (but doesn't come out and say directly), I buy deep in-the-money calls somewhat far out in time (>180 DTE). I buy deep and long-dated because I'm looking for calls with as little extrinsic value/premium in them as possible, because I just don't want to pay for premium in an option that will just decay over time. Even when I do this, I "cover" this "synthetic" long stock position with short calls nearer in time (the options lingo for this setup is a "Poor Man's Covered Call."). If that's what you're recommending that people do here in your article, then come right out and say it, for goodness sake. Merely saying: "buy calls" is stupid, uninformative, and potentially destructive.

If the article is suggesting that readers buy out-of-the-money calls here just because they're "cheaper" (i.e., made up of less extrinsic value) than usual, well, that's just plain ass stupid advice. The vast majority of OTM calls expire worthless, so you would be throwing your money away on these if you do not get the required movement you need to "make them pay." Those may be comparatively cheap here in this low volatility environment; it doesn't mean they're "smart."

Trade Idea: XOP March 17th 36/40/40/44 iron fly for a 2.42 credit ($242/contract); max loss/buying power effect 1.58; break evens at 37.58/42.42. Looking for oil to zombie about in a range for a bit ... .

Trust me ... . Chicks dig these: https://www.tastytrade.com/tt/learn/...n-covered-call

lol....c'mon, we want you to "participate" in the markets....

I will have to look at the PMCC's some now....do you ever put them on bi-directionally?

ok I want to watch those tt vids but I am also watching The Mick reruns. What do you look for in your PMCC setups? what dte's for the front/back? What delta for the short leg? etc....? I modeled a couple in GLD now and it scared me, which is why I axed if you ever go 2-way with em?

Is this the only other options thread?