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  • #641
  • Feb 3, 2017 11:53am Feb 3, 2017 11:53am
Quoting Wulfgar
Is this the only other options thread?
I think so. Zeebs is trading much less directionally than me.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #642
  • Feb 3, 2017 3:09pm Feb 3, 2017 3:09pm
Quoting The Fool
{quote}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?
Yes, on the bidirectional. It's like a massively long-dated "kitty."

I start with looking at the 70 delta for the back month, the 30 for the front, and then "putz" from there.

With the back month, I generally look at 180 DTE, although that ups the price tag somewhat. The front month, I generally put on in the next >30 DTE monthly.

The reason why I go "way long" on the back month is that I usually use these for core positions (e.g., TLT, SPY, etc.), and I want to have plenty of time to work them without having to leg in and out all the time.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #643
  • Feb 3, 2017 3:11pm Feb 3, 2017 3:11pm
Quoting ZebraSquirl
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 ... .
Filled for 2.36. They're never quite as sexy as they appear in the off hours ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #644
  • Feb 3, 2017 3:16pm Feb 3, 2017 3:16pm
Quoting Wulfgar
Is this the only other options thread?
As TheFool noted, I'm basically a nondirectional premium seller. That means: short strangles/straddles, iron condors/flies.

On rare occasion, I'll play something directionally, but it's usually things like FXE (the Euro proxy), a gold/silver play (GLD, GDX), natty gas (CHK, UNG), or petro (XOP, OIH) -- things that I can form a directional assumption on because they're basically "what I know." Ask me about my directional assumption on AAPL or the broad market -- I don't pretend to have a clue ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #645
  • Feb 3, 2017 3:34pm Feb 3, 2017 3:34pm
thanks.....Ima have to get back to selling some, markets have devolved into these long flatline stretches punctuated 2-3 times a year by vol events......Boring.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #646
  • Feb 3, 2017 5:44pm Feb 3, 2017 5:44pm
Quoting The Fool
thanks.....Ima have to get back to selling some, markets have devolved into these long flatline stretches punctuated 2-3 times a year by vol events......Boring.
Here is the best step-by-step to a good PMCC that insures that the premium in the short call is greater than the extrinsic value in the long-dated option: https://www.dough.com/blog/poor-mans-covered-call
Fireworks are fun ... as long as you don't blow your fingers off.
  • #647
  • Feb 3, 2017 6:20pm Feb 3, 2017 6:20pm
Quoting ZebraSquirl
{quote} Here is the best step-by-step to a good PMCC that insures that the premium in the short call is greater than the extrinsic value in the long-dated option: https://www.dough.com/blog/poor-mans-covered-call
The longer out in time you go with the back-dated month, the deeper in the money you will have to go (and the more expensive the setup will be) in order to have an "extrinsic value balanced" setup.

For example, here is a fairly "extrinsic value balanced" setup using the SPY Sept 15th 191 long call (with an extrinsic value of 1.52)* and the March 24th 232.5 short call (1.62 cr at the mid).

For SPY, it is not, in itself, "cheap." This would cost 38.24 to put on ($3824). However, it is cheap as compared to a covered call here (229.34 x 100 - $162 (for the March 24th 232.5 short call) = $22722.

You can, of course, putz with bringing the short call in closer to current price, bringing in more credit for that, and then looking at long options with extrinsic value < the short call credit that are not so deep ITM/far out in time, resulting in a cheaper setup ... .

(Naturally, I'm not recommending a bullish assumption SPY trade put on way up here ... . Just walking through the math of a "good from the git-go, extrinsic value balanced" PMCC).

* -- The 191 long call's extrinsic value is calculated by (a) subtracting the strike price from the current price of the underlying: 229.34 - 191 = 38.34 (that's your intrinsic value); and then (b) subtracting that from the cost of option (here, 39.86 at the mid). The diff is 1.52, which is the extrinsic value in the Sept 15th 191 long.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #648
  • Feb 3, 2017 6:24pm Feb 3, 2017 6:24pm
Quoting The Fool
thanks.....Ima have to get back to selling some, markets have devolved into these long flatline stretches punctuated 2-3 times a year by vol events......Boring.
Getting older/grayer waiting for these >20 VIX vol events ... . At this point, I'd settle for ~15 ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #649
  • Feb 3, 2017 6:28pm Feb 3, 2017 6:28pm
Current VIX term structure per http://vixcentral.com/ :

Attached Image (click to enlarge)
Click to Enlarge Name: Current VIX Term Structure.jpg Size: 226 KB


Sad state of affairs when you have to go out to the May expiry in VIX to get .70 from a 16/19 short call vert ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #650
  • Feb 3, 2017 7:12pm Feb 3, 2017 7:12pm
Quoting The Fool
thanks.....Ima have to get back to selling some, markets have devolved into these long flatline stretches punctuated 2-3 times a year by vol events......Boring.
Actually, not sure it ends up looking like a "kitty" graphically ... . Most of the bodies of these oppositional Poor Man's (one side a Covered Call, the other a Covered Put) put on fairly simultaneously are inverted strangles ... .

I kind of look at each side as a separate trade, but that's whatchya get ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #651
  • Feb 3, 2017 7:18pm Feb 3, 2017 7:18pm
I signed up for a TastyWorks invite right after the fee schedule came out on January 3rd ... . Somehow, I don't think four weeks is "a few days":

Attached Image


Just me ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #652
  • Feb 3, 2017 7:29pm Feb 3, 2017 7:29pm
Quoting ZebraSquirl
I signed up for a TastyWorks invite right after the fee schedule came out on January 3rd ... . Somehow, I don't think four weeks is "a few days": A Few Days.jpg;2172291 Just me ... . {image}
And to be completely fair, this is after I e-mailed support and was told last week that I was "all set" ... . "All set" to do what exactly?
Fireworks are fun ... as long as you don't blow your fingers off.
  • #653
  • Feb 3, 2017 8:12pm Feb 3, 2017 8:12pm
thanks for the PMCC notes, bro, I will be studying. re: TT, idk & can't remember "signing up" but I must have done it as soon as they sent me a notice of the new brokerage rollout....

I have a list of questions I want to ask them and will do that soon, my check only got mailed a few days ago so I won't be online prolly for another week or so....

when I first saw the pricing structure I was not quite jazzed but I now can see lots of ways it will save me money. Now if they can do the basics without fucking up I will be cool, we'll see....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #654
  • Feb 4, 2017 3:45pm Feb 4, 2017 3:45pm
Quoting The Fool
thanks for the PMCC notes, bro, I will be studying. re: TT, idk & can't remember "signing up" but I must have done it as soon as they sent me a notice of the new brokerage rollout.... I have a list of questions I want to ask them and will do that soon, my check only got mailed a few days ago so I won't be online prolly for another week or so.... when I first saw the pricing structure I was not quite jazzed but I now can see lots of ways it will save me money. Now if they can do the basics without fucking up I will be cool, we'll see....
I was "slow to the party." I naturally wanted to see the fee sked first ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #655
  • Edited 11:13am Feb 5, 2017 11:03am | Edited 11:13am
The double diagonals are cheaper to put on ... . I like to start out with not only a delta neutral setup, but also a "side neutral" setup: each side is, in itself, delta neutral, with the front month being the same delta value as the back:

Attached Image (click to enlarge)
Click to Enlarge Name: SPY Dub Diag.jpg Size: 342 KB


Although most people work just the short strangle part of the setup, I'll work all ends of this, rolling out the longs intraexpiry to lock in any increase in value they experience ... . They are, after all, most likely going to decay over time and potentially expire worthless. Anything you can lock in intratrade, I figure, is worthwhile. That being said, rolling out the longs increases the width of the spread, so potentially increases max loss, as well as buying power effect ... .

A variation of this setup is a double calendar, with the short option front months at the 20 delta and the long back month options at the same strike. Again, although most just leave this setup alone, I let price dictate rolling of the options intratrade, rolling the longs away and the shorts toward current price when that's worthwhile, essentially converting the setup to a double diagonal along the way ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #656
  • Feb 5, 2017 1:38pm Feb 5, 2017 1:38pm
The week ahead for premium selling: NVDA, XRT, and, well, not a helluvalot else. https://www.tradingview.com/chart/NV...T-AND-THE-VIX/
Fireworks are fun ... as long as you don't blow your fingers off.
  • #657
  • Feb 7, 2017 1:56am Feb 7, 2017 1:56am
Hi guys..
Where do you trade options? i mean what broker?

Currently i trade on binar*.co*
Is there any well known forex broker that provide such service?
i worshipped... Momentum
  • #658
  • Feb 7, 2017 8:24am Feb 7, 2017 8:24am
Quoting RockRobb
Hi guys.. Where do you trade options? i mean what broker? Currently i trade on binar*.co* Is there any well known forex broker that provide such service?
You'll have to go with one of the "all around" brokers to do both spot forex and stock, index, and/or ETF options out of the same account: IB, TDA, E*Trade, CME Group, etc. There may be others, but those are the "majors" ... . None of these do binaries, if that's the tree you're barking up ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #659
  • Feb 7, 2017 9:15am Feb 7, 2017 9:15am
Now that NVDA is at a new ATH, kind of hesitant to go nondirectional. My guess is that this move may be overdone, so thinking backspread:

Attached Image (click to enlarge)
Click to Enlarge Name: NVDA Put Backspread.jpg Size: 386 KB


On first blush, you'll notice there's a huge dead zone between 97.50 and 110. If you do nothing at all, and price settles in that area post-earnings, it's a loser.

The notion here, however, is that if there is a substantial down move, you take off one of the long put contracts in profit and let the short put vertical/credit spread "ride." The opposite side of the coin: it rips higher and/or just doesn't move much, and you make small change on the entire setup ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #660
  • Feb 7, 2017 9:38am Feb 7, 2017 9:38am
Opening: NVDA March 17th 100/105/140/145 iron condor for a 1.57 credit. (High IVR/High IV).

A compromise trade ... . Going out farther in time to give the trade time to be right. Will look to manage at 50% max profit (~$78/contract).
Fireworks are fun ... as long as you don't blow your fingers off.
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