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texagbeliever
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OverSeas AG said:

OverSeas AG said:

I should say I sold Covered Calls on ROKU, just going to not worry about it until 7/17
OA, I really appreciate you giving me that advice.

Suddenly my $112s are now $103s, if I get called out I can still make $400 profit rather than take a $7 loss per share.

Like a light bulb went off...


In this market why would you want $20k in a stock like Roku? Are you long term holding these shares or bullish on the short term prospects?

Generally curious as I dont get the fundamental value of roku.
12thMan86
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McInnis 03 said:

Ever use the $SKEW? I had no idea this existed

I don't use it because I've never set it up. JC talks about it when he's in the room and does his nightly updates.
OverSeas AG
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AG
Every knee shall bow and every tongue shall confess
DON'T TREAD ON ME
McInnis 03
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Youtube presentation
texagbeliever
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OverSeas AG said:

texagbeliever said:

OverSeas AG said:

OverSeas AG said:

I should say I sold Covered Calls on ROKU, just going to not worry about it until 7/17
OA, I really appreciate you giving me that advice.

Suddenly my $112s are now $103s, if I get called out I can still make $400 profit rather than take a $7 loss per share.

Like a light bulb went off...


In this market why would you want $20k in a stock like Roku? Are you long term holding these shares or bullish on the short term prospects?

Generally curious as I dont get the fundamental value of roku.
In my case a couple of reasons:

1) I am still more comfortable with stocks than Options, though I learn more and more all the time
2) I was expecting ROKU to break up
3) Was not disciplined on my stops, as I should have been.
4) Intended to go long with 1/2 of my position (and still may)

I havde done pretty well on in and out of stocks. ROKU was just not one of them.
ROKU has made my no touch list as it was my first option purchase to go wrong even though i had multiple chances to come out even or up 30%.

My question for you is, if you had 20k in cash would you buy roku right now or would you put it in another stock? I get that you have the covered calls so this isn't your case right now and am not trying to second guess that part. But if you would choose another stock to invest in why not take the loss (if you have some short term net profit to net it against) and switch into that.

Now one nice thing about Roku stock is that it seems to be pretty independent of the index. So SPY has little correlation and therefore little impact on the stock's value. Which would make it a good investment if you though a pull back was soon and many other stocks were over valued.
khkman22
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AG
I understand the general concept and wanting to close at the short put strikes, but what happens if the market drops quicker than expected? For instance, SPX is at 2850 on 7/3. What would the strategy be at that point? Just close it out completely? Wait and hope it rebounds back to 2900?

If you wait and hope and then it drops further to 2800 on 7/10, how does that affect the overall profit/loss? Are you still pretty close to the net price of the initial trade? So he bought these for $.30, would he theoretically sell them for $.30 on 7/10?
canagian
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McInnis 03 said:

Ever use the $SKEW? I had no idea this existed

so looking back a year (using yahoo finance values for ^SKEW):

^SKEW ma went above 135 on 12/16/19 - SPY ~320 so buy 290 puts
60 days later SPY ~ 333 (near peak)
90 days later SPY ~ 230 (near bottom of V)

^SKEW ma went below 120 on 3/17 (near bottom of V) - SPY ~ 230 so buy 260 calls
60 days later SPY ~ 295
90 days later SPY ??? (2 weeks from now)

Following this could have produced amazing returns.
12thMan86
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FishrCoAg said:

12thMan86 said:

McInnis 03 said:

So y'all asked yesterday if I started to hedge a fall with long put butterflies to advise. Here's one I just bought.

SPX
JUL 17
1 BUY TO OPEN 2920 PUT
2 SELL TO OPEN 2900 PUT
1 BUT TO OPEN 2880 PUT

Risk $.30
Max Profit (if SPX 2900 on JUL 17) $20

I'm also entering bids for a 29Jun put butterfly for 3065/3050/3035 at $.35 and 17Jun same strikes $.45

They have not yet filled.

These all likely expire worthless, but that's why it's a hedge.
remember, these don't max out unless the center strike is hit right at the end of the day on expiration.
I feel like I'm missing something. Isn't the risk 20.30 if it closes at 2880 at expiration? NVM. I suck at math today
Nope your risk is simply the debit paid. The best way to play butterflies, especially ones that are not wide ( the wider the wings, the better chance you have to catch more...but they are more expensive) is to sell them when you've made 3 to 10 times your money and not try to "pin" or max out the trade. I've f'd myself a few times doing that.

The other thing that gets you is getting to the puts you sold, the center strike. If we woke up on Monday and the market was at 2900, you'd think " damn I just hit it". But in reality those center strike puts you sold would still have a lot of life. The trade would make money, probably 4x. But cashing out at 1.20 is not cashing out at 20 bucks.

The way I like to play flies is short term. I put on a 2960/3000/3040 for 1.40 for Friday next week. Will it hit? Prolly not. But if we get back to the mean (21 ema) next week between Wednesday and Friday, that will be a nice hit. I had a zoom fly that I put on Monday for 2.30. 220-240-260. 240 was the expected move per TOS. YESTERDAY when zoom was 225 I sold it for 5.30. I could have waited and chance that I get more today, but that would have not been a good call. I took the 2.5x and moved on. ZM closed around 210 I think. If it's back up to 23o or so tomorrow I'll be pissed but I just Take base hits.

Some of the simpler trading guys like to use butterfly's at earnings. Say for example it's Thursday. Apple announces after hours. It's currently trading at 225. And the expected move is 15 bucks, you just don't know which way. Remember, the expected move is based on current volatility, and IS NOT an exact science.
So why not create a 230-240-250 butterfly that expires tomorrow? You want to see those center strikes lose value fast? Do a one day trade! That trade would probably cost a buck and you could make 10. If you wake up the next day and apple is at 240, the fly is probably worth 4 or 5 bucks and you have to decide if you want to hold on to it until the afternoon to make the full 10. I'll usually watch them and tr to get as much as I can, but I don't get greedy. Like with Zoom yesterday. Most of those big ballers on simpler will buy 5 or 10. Then you can leg out to get some free trades working. I have pinned a few in the last 30 mins and it's glorious. I'm a gambling mo fo and sometimes a guy with 30 yrs experience that teaches will use his insight to guess a direction on a mon, wed, or Friday afternoon on SPX. They usually are 8 to 10:1. Sometimes they hit, sometimes they don't. So you place the butterfly trade at 2 ish pm and you can let it CASH SETTLE. You don't have to close anything and it doesn't count as a day trade! With the volatility he usually does them 15-20 wide and will place the sold strikes where there is high open interest on both the put and call side at a certain number. Nice round numbers are common. Like 3000. It's crazy how it works.

Y'all should look into selling credit spreads and buying back for less. Takes advantage of theta decay and volatility. I typically do them at or slightly in the money and while the usually pay 1:1 or 3:2, my hit rate is pretty solid. Using that same Apple example, if you think Apple is going to 235 by next Friday. Sell the 225/220 credit spread for 2.60. That money goes in your account, and your risk is the spread with minus your credit, or 2.40. Instead of selling a naked put, you are selling a put and buying a cheaper put for insurance. If you want to make more, widen the spread. As long as Apple closes above 225 at expiration, you keep the credit. I usually buy them back when I've made 80% of the max profit, or in this case around .50. So sell for 2.60, buy back for .50. All day long. Did it on crowdstrike today. Sold 90/85 PCS ON Monday for 2.80. Bought back today for .40. 2.40 overall profit. However If APPLE is at 235, you just let it expire worthless and keep it ALL!

Think the market is going to drop but don't want to pay up for SPY PUTS? Look at what a call credit spread costs that's ITM. You can probably sell a 305/310 ccs for 3 or 3.50 right now. Total guess I'm not in front of computer. But your max risk is 1.50. 4 of those would put up to 1400 bucks in your pocket for $600 risk. If the market keeps going up, maybe you have to buy it back for MORE than you paid, but you'd won't get smoked like owning a straight up put that's going against you. I see a lot of guys buy way OTM calls and outs on here. It works great with it moves your way, but if it doesn't, you can get smokes in a hurry. Theta positive if you can!

I was going to answer that in two sentences and now look at this crap!

Sorry for the rant. I love this stuff! Good night and Gig em!

Ragoo
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AG
Post more, that was brilliant
FishrCoAg
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Wow. Thanks!
OverSeas AG
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Every knee shall bow and every tongue shall confess
DON'T TREAD ON ME
OverSeas AG
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AG
Every knee shall bow and every tongue shall confess
DON'T TREAD ON ME
Ragoo
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How far out is the covered call? If it expires worthless. Buy more shares. Then sell another covered at you cost basis then buy more. These purchases are now your net free holding. If you get called out you have these shares converted to a long term play and can focus on a new ticker.
Aggies1322
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So going back to the SKEW and Put/Call ratio that John Carter was mentioning. I am seeing that the SKEW is 131ish and the Put/Call ratio is .586. According to Carter, that means the Put/Call Ratio is indicating a pull back (being that it is under .75). However, the SKEW is a little under his short target of 135. I'm assuming this is a good indicator that the pull back that was expected is coming?

I am just trying to regurgitate the info to y'all so you can correct me if I'm wrong.
oldarmy1
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I think this qualifies for a flash up! If this doesn't bust open V and CRM nothing will.

Futures up over 30 points = SPY $314 area.

See if GLUU goes nuts and if ROKU short squeezes. This will tell a lot about where ROKU is headed.
McInnis 03
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Ym ripping at +338.
ES +38.
Yowza
tam2002
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Uhhh is this pullback really gonna happen or we just fooling ourselves?
OverSeas AG
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Every knee shall bow and every tongue shall confess
DON'T TREAD ON ME
Carlo4
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tam2002 said:

Uhhh is this pullback really gonna happen or we just fooling ourselves?


It's perfectly normal to recover like this when 9% of all mortgages have been delayed/are in forbearance.

If we see declines, I think it starts in the summer once all these programs/delays end for helping individuals out.

zag213004
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Sell at the open immediately? Or does a spy flash allow CRM and V to make the upward movement a few 15 min candles in?
McInnis 03
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tam2002 said:

Uhhh is this pullback really gonna happen or we just fooling ourselves?


It's not unusual in an approach to pullback that the high is tested a couple times. The last time is "kissing the high goodbye"

But maybe higher days are ahead. We have enough eyes watching indicators now to hopefully see it coming instead of being scared of it.
tam2002
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I see...Thanks. I've done pretty well following you guys over the past 2 months and am sitting on a good amount of cash (for me) ready to go long but man it's hard to not get fomo right now ha.

Staying patient
claym711
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Above 3150 resistance and we are into the ATH distribution. Hard to believe we are here, but here we are.

My array of macro indicators are crossed over green so far it's going to take v heavy selling to flip back under.
Carlo4
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OAS up 15% premarket. Thanks for the rec gang!
oldarmy1
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V big up days have come after a muted open. CRM is day consolidation and it has to start its move.

I had said topping gets crazed capitulation and that we could see a flash as high as $318. If we fail below $313 early I'd buy a $314 day call and risk it up to 50% in initial 30 minutes because a quick drop doesn't accomplish the goal of clearing shorts out of the markets.

If you see a quick drop and then push back to $314 it could get nuts, which is what we want.we want to see people saying it's not stopping. If we end up below $313 today then the odds go way up that I'm on target. If we go ape crazy closing way up then a sell off back under $313 by Tuesday will be the mark.

Bottoms and tops get nuts. We want nuts because it will signal a top, not to mention it would get our call side trades a payoff.

Fun isn't it?
12thMan86
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12thMan86 said:

FishrCoAg said:

12thMan86 said:

McInnis 03 said:

So y'all asked yesterday if I started to hedge a fall with long put butterflies to advise. Here's one I just bought.

SPX
JUL 17
1 BUY TO OPEN 2920 PUT
2 SELL TO OPEN 2900 PUT
1 BUT TO OPEN 2880 PUT

Risk $.30
Max Profit (if SPX 2900 on JUL 17) $20

I'm also entering bids for a 29Jun put butterfly for 3065/3050/3035 at $.35 and 17Jun same strikes $.45

They have not yet filled.

These all likely expire worthless, but that's why it's a hedge.
remember, these don't max out unless the center strike is hit right at the end of the day on expiration.
I feel like I'm missing something. Isn't the risk 20.30 if it closes at 2880 at expiration? NVM. I suck at math today
Nope your risk is simply the debit paid. The best way to play butterflies, especially ones that are not wide ( the wider the wings, the better chance you have to catch more...but they are more expensive) is to sell them when you've made 3 to 10 times your money and not try to "pin" or max out the trade. I've f'd myself a few times doing that.

The other thing that gets you is getting to the puts you sold, the center strike. If we woke up on Monday and the market was at 2900, you'd think " damn I just hit it". But in reality those center strike puts you sold would still have a lot of life. The trade would make money, probably 4x. But cashing out at 1.20 is not cashing out at 20 bucks.

The way I like to play flies is short term. I put on a 2940/3000/3040 for 1.40 for Friday next week. Will it hit? Prolly not. But if we get back to the mean (21 ema) next week between Wednesday and Friday, that will be a nice hit. I had a zoom fly that I put on Monday for 2.30. 220-240-260. 240 was the expected move per TOS. YESTERDAY when zoom was 225 I sold it for 5.30. I could have waited and chance that I get more today, but that would have not been a good call. I took the 2.5x and moved on. ZM closed around 210 I think. If it's back up to 23o or so tomorrow I'll be pissed but I just Take base hits.

Some of the simpler trading guys like to use butterfly's at earnings. Say for example it's Thursday. Apple announces after hours. It's currently trading at 225. And the expected move is 15 bucks, you just don't know which way. Remember, the expected move is based on current volatility, and IS NOT an exact science.
So why not create a 230-240-250 butterfly that expires tomorrow? You want to see those center strikes lose value fast? Do a one day trade! That trade would probably cost a buck and you could make 10. If you wake up the next day and apple is at 240, the fly is probably worth 4 or 5 bucks and you have to decide if you want to hold on to it until the afternoon to make the full 10. I'll usually watch them and tr to get as much as I can, but I don't get greedy. Like with Zoom yesterday. Most of those big ballers on simpler will buy 5 or 10. Then you can leg out to get some free trades working. I have pinned a few in the last 30 mins and it's glorious. I'm a gambling mo fo and sometimes a guy with 30 yrs experience that teaches will use his insight to guess a direction on a mon, wed, or Friday afternoon on SPX. They usually are 8 to 10:1. Sometimes they hit, sometimes they don't. So you place the butterfly trade at 2 ish pm and you can let it CASH SETTLE. You don't have to close anything and it doesn't count as a day trade! With the volatility he usually does them 15-20 wide and will place the sold strikes where there is high open interest on both the put and call side at a certain number. Nice round numbers are common. Like 3000. It's crazy how it works.

Y'all should look into selling credit spreads and buying back for less. Takes advantage of theta decay and volatility. I typically do them at or slightly in the money and while the usually pay 1:1 or 3:2, my hit rate is pretty solid. Using that same Apple example, if you think Apple is going to 235 by next Friday. Sell the 225/220 credit spread for 2.60. That money goes in your account, and your risk is the spread with minus your credit, or 2.40. Instead of selling a naked put, you are selling a put and buying a cheaper put for insurance. If you want to make more, widen the spread. As long as Apple closes above 225 at expiration, you keep the credit. I usually buy them back when I've made 80% of the max profit, or in this case around .50. So sell for 2.60, buy back for .50. All day long. Did it on crowdstrike today. Sold 90/85 PCS ON Monday for 2.80. Bought back today for .40. 2.40 overall profit. However If APPLE is at 235, you just let it expire worthless and keep it ALL!

Think the market is going to drop but don't want to pay up for SPY CALLS? Look at what a call credit spread costs that's ITM. You can probably sell a 305/310 ccs for 3 or 3.50 right now. Total guess I'm not in front of computer. But your max risk is 1.50. 4 of those would put up to 1400 bucks in your pocket for $600 risk. If the market keeps going up, maybe you have to buy it back for MORE than you paid, but you'd won't get smoked like owning a straight up put that's going against you. I see a lot of guys buy way OTM calls and outs on here. It works great with it moves your way, but if it doesn't, you can get smokes in a hurry. Theta positive if you can!

I was going to answer that in two sentences and now look at this crap!

Sorry for the rant. I love this stuff! Good night and Gig em!




Sorry for all the typos. I did that on an I pad with a vodka tonic and saw several but y'all get the point. May be playing golf this afternoon and miss the close. We will see how the day plays out.
oldarmy1
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claym711 said:

Above 3150 resistance and we are into the ATH distribution. Hard to believe we are here, but here we are.

My array of macro indicators are crossed over green so far it's going to take v heavy selling to flip back under.


Was up watching overnight and we had a failed cup from 3144. Break that and we'd test 3150 which would really squeeze shorts.

Let's get bonkers!
BrokeAssAggie
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are you still holding the 200V calls expiring today?
oldarmy1
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For you patient investors remember TTOO. It's made a steady climb to double topping out at $1.47 before this pullback and looks to be basing.

If anyone interesting in playing it as a safe long ball trade you can sell November $2.50 calls for great premium of $0.45 and THEN buy equivalent number of shares. It's like buying TTOO at $0.75 or a crazed ROI of $2.95 if called out in November.

These are for patient tactical investors. And DO NOT place a sell on covered calls premarket. You have to wait for bids to develop and go 5-10 at a time, obviously keeping an eye on the stock price.
oldarmy1
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I am holding net free V calls expiring today and V calls expiring June 19 that are down 32%. Need V to engage.
BrokeAssAggie
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6/19 200 strike?
12thMan86
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I've seen the put call ratio be low like this for a while. But when we flush (whenever that is) it will most likely be violent. I'm anxious to see where buyers step in at the next flush lower. All it takes is China to piss us off, Trump to tweet something, or a rioter to get shot and we'll see a nice dip. We need that for a "healthy" market. I had to laugh
12thMan86
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payrolls RISE! LOL market will probably drop now...but ES futures are UP
leoj
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59 South
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There's 3150
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