Does anybody use the straddle strategy often with options? If so, any tips on target return, duration, target premium in relation to price, etc.?

Getting my feet wet with the AMD 9/28 $31 short straddle and curious to know if I need to look for or be aware of anything in particular. Premium collected on this trade was 12% of exercise price with 15 DTE on entry. Without earnings in this window, I felt the risk/reward was acceptable for my risk tolerance.

Ranger222 said:

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I have two accounts -- a longterm account and a trading account. The LT account I buy stock in strong companies (AMZN, AAPL, some other stocks I like longterm like ATVI and TDOC) and only look at it when I think the time is right to purchase more shares or initiate a new purchase. This is like maybe once every quarter. I honestly couldn't tell you its exact value right now, how its performed this week/month and honestly I don't care to know. In my trading account, I watch it like a hawk multiple times a day and I am putting in orders throughout the day. Most of those stocks/trades/ideas are the ones discussed on this thread.

You should almost definitely have a longterm investment account where you buy strong stocks, set it and forget it. If you want to trade on the side like some of us do here, open a simple Robinhood account with money you are willing to lose and play along, learn your way. Anticipate that account to lose money, especially in the short term. You may even have to put more money in that you're willing to lose (hopefully not, but I've read stories that even the most "successful" traders blew up accounts multiple times when first starting). It has personally taken myself a long time to learn the ins and outs (accelerated no doubt by the wisdom of this thread and the motivation to get better) that only now am I comfortable with my approach that I'm making meaningful, consistent gains. I still have moments where I make a bad trade and blow up a week-month worth of work.

To anyone that reads this thread and wants to jump in, please do not do so with meaningful money. Most of the trades that are made here can be done so with Robinhood and a starting balance of $500 - 1000. There are also websites that let you run paper accounts (fake accounts) to track your progress before you dive in with real money.

In terms of resources or what to read, I honestly have learned the most from just reading/watching traders on twitter. Especially traders that run their own subscription services. They sometimes put out Youtube videos that describe what trades they made today and why. This is a good example. I do not advocate for joining their service as I do not believe they are selling anything special and believe most of their trades can be deduced from twitter (surprisingly similar to football recruiting and services. Not a secret when a player commits these days!). If you follow along you'll hopefully pick up how they're breaking down charts, what they look for and their tendencies. Everyone is different and you can build your own strategy on what you like, what you want to incorporate and what you're not going to pay attention to. That's what makes it fun in my opinion because there is no true right way and you are constantly learning and adapting. It never gets stale.

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I concur. I have TD for long term and Robinhood for short term. Here is the link you could you for Robinhood.

https://share.robinhood.com/jonathv876

Sign up with this link we both get a share in a stock when you join. 0% Trans fee.

khkman22 said:

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Does anybody use the straddle strategy often with options? If so, any tips on target return, duration, target premium in relation to price, etc.?

Getting my feet wet with the AMD 9/28 $31 short straddle and curious to know if I need to look for or be aware of anything in particular. Premium collected on this trade was 12% of exercise price with 15 DTE on entry. Without earnings in this window, I felt the risk/reward was acceptable for my risk tolerance.

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you can take some of your premium and buy a call at 34 and a put at 27 or so to define your risk.

Slightly red right now for futures...

Ranger222 said:

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I have two accounts -- a longterm account and a trading account. The LT account I buy stock in strong companies (AMZN, AAPL, some other stocks I like longterm like ATVI and TDOC) and only look at it when I think the time is right to purchase more shares or initiate a new purchase. This is like maybe once every quarter. I honestly couldn't tell you its exact value right now, how its performed this week/month and honestly I don't care to know. In my trading account, I watch it like a hawk multiple times a day and I am putting in orders throughout the day. Most of those stocks/trades/ideas are the ones discussed on this thread.

You should almost definitely have a longterm investment account where you buy strong stocks, set it and forget it. If you want to trade on the side like some of us do here, open a simple Robinhood account with money you are willing to lose and play along, learn your way. Anticipate that account to lose money, especially in the short term. You may even have to put more money in that you're willing to lose (hopefully not, but I've read stories that even the most "successful" traders blew up accounts multiple times when first starting). It has personally taken myself a long time to learn the ins and outs (accelerated no doubt by the wisdom of this thread and the motivation to get better) that only now am I comfortable with my approach that I'm making meaningful, consistent gains. I still have moments where I make a bad trade and blow up a week-month worth of work.

To anyone that reads this thread and wants to jump in, please do not do so with meaningful money. Most of the trades that are made here can be done so with Robinhood and a starting balance of $500 - 1000. There are also websites that let you run paper accounts (fake accounts) to track your progress before you dive in with real money.

In terms of resources or what to read, I honestly have learned the most from just reading/watching traders on twitter. Especially traders that run their own subscription services. They sometimes put out Youtube videos that describe what trades they made today and why. This is a good example. I do not advocate for joining their service as I do not believe they are selling anything special and believe most of their trades can be deduced from twitter (surprisingly similar to football recruiting and services. Not a secret when a player commits these days!). If you follow along you'll hopefully pick up how they're breaking down charts, what they look for and their tendencies. Everyone is different and you can build your own strategy on what you like, what you want to incorporate and what you're not going to pay attention to. That's what makes it fun in my opinion because there is no true right way and you are constantly learning and adapting. It never gets stale.

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I'll second this, almost all of my money in the brokerage is in low fee mutual funds, stock from my company that i get yearly through employee purchase plans or performance options (a major oil with big dividend) and a few companies that I've tried to buy low on and wait for a profit long term (JD, etc)

I only use $1k to play with the option market and try to learn the in's and outs from this thread and other material. I'm ok with losing that and if I do, I'll reevaluate if I really want to do trading on the side or just stick with the long term view

That doesn't even touch on the 401k side where I have no clue what the value is unless I glance at it accidentally when looking through accounts.

I second this (or fifth it, now). I have my retirement planning in Vanguard, and my fun stuff in RH for now. I plan on learning the next couple of years with my RH account, and then moving over to tastytrade/IB when they have even lower fees (which I think is coming sooner rather than never).
I do have the pipe dream with some friends in the area who trade forex of making a certain percentage every month, letting that compound, and in ten years have a sizable chunk of change to consider living off of. But that's a long shot dream. It takes learning a lot now, and the patience and discipline to keep learning.
I follow Ranger222 on twitter and OA here and have already learned a ton. It will be interesting to see what this thread looks like when the market does turn south.

https://www.cnbc.com/2018/09/18/tilray-ceo-investing-in-pot-great-hedge-for-alcohol-drug-companies.html

I wish I would've had more money for CGC...

TLRY up $70 pre-market?!?!???? Holy ballz

Up another 5% premarket...I missed the boat on it I think

I have no comprehension of what is going on with TLRY. Up $75 in PM trading. Simply do not understand other than it being a true share shortage. I feel sorry for those that buy in now that will become bagholders when the stock makes its inevitable crash down to $50. Even HMNY got bid up like this almost a year ago and now can be had for $0.01 as mentioned yesterday.

IF you want to try and play the TLRY hype, I suggest looking at other similar names that could see bounces. Same thing happened around the start of the year when blockchain companies were hot and everyone jumped into things like OSTK and RIOT. Those names were ran up hard but had the inevitable crash as well. I took a small position in Canopy Growth (CGC) yesterday -- at least they have an actual partnership with Constellation brands and seem to be less speculative than other names, but still expensive for what they are currently doing. This would be a quick swing idea, not longterm hold. Other names which could attract hype (the day traders) -- CRON NBEV. Both under $10. Just be cautious because they can be quickly liquidated just as fast as they are pumped up and you could be holding a bag.

I CHOSE CRON INSTEAD OF TLRY

TLRY is at the point where you want to short it, and it seems to make sense....but dare you?

Another way to play it is by looking at Shopify (SHOP). There was an analyst note yesterday that speculated that e-commerce will benefit after Canada legalizes marijuana, and that Shopify has already been selected by some cannabis produces to drive digital sales. There was a call spread bought in that name yesterday and I think shares could be driven to $180 in the near term

I made a quick 24 hour turn of 50% on NBEV on acquisition rumors from Coca Cola. I'm interested to see where it goes. Was in at $2 and out at $3.02. It held overnight, and a lot of volume at the end of the day. Also jumped on a few options and made some premium on it. Will keep an eye on it again today.

Just use that $$ for ELA tomorrow.

gougler08 said:

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Slightly red right now for futures...

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Total fake out

Not a stellar couple minutes for Biotech/Pharma. I think AMGN is about to crush some skulls

Banks and CAT / DE

oldarmy1 said:

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gougler08 said:

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Slightly red right now for futures...

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Total fake out

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Yep, I'll take it

khkman22 said:

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Does anybody use the straddle strategy often with options? If so, any tips on target return, duration, target premium in relation to price, etc.?

Getting my feet wet with the AMD 9/28 $31 short straddle and curious to know if I need to look for or be aware of anything in particular. Premium collected on this trade was 12% of exercise price with 15 DTE on entry. Without earnings in this window, I felt the risk/reward was acceptable for my risk tolerance.

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Your standard TT mechanics on a straddle are to enter 45DTE and then close/roll at 25% max profit or 21DTE (whichever comes first).

They roll at 21DTE because the closer to expiration you get the higher you gamma risk becomes.

I've sold 1000 TLRY Puts expiring Friday anywhere from $115-$125 for insane premium value.

DOW on trend high that gap that began the selloff is going to get filled 26435......then set sights on new all time high.

Something spooked the markets

Prognightmare said:

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Something spooked the markets

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Yeah that was a big dip on everything there...what caused that one?

Still trying to find the cause.

Selling in some of the recent high flyers and those growth names starting to turn....AMD SFIX SQ all look like they are about to roll over. Industrials and Banks keeping us in there. Those names are at highs on day while growth and tech names starting to tumble.

Just FYI - My wood flooring manufacturing business received notice that China imports will have a 10% tariff effective Sept 28th.

Ranger222 said:

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Selling in some of the recent high flyers and those growth names starting to turn....AMD SFIX SQ all look like they are about to roll over. Industrials and Banks keeping us in there. Those names are at highs on day while growth and tech names starting to tumble.

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Yup....Glad I sold the SQ play overnight hold at the open.

That said I am buying a bunch of $105 SQ out to Oct 19 because I think this is a shake down ahead of the $100 push.

I know I bug you about AMGN, but it looks like it is about to rip!

UpstateAg said:

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I know I bug you about AMGN, but it looks like it is about to rip!

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Ranger222 said:

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Selling in some of the recent high flyers and those growth names starting to turn....AMD SFIX SQ all look like they are about to roll over. Industrials and Banks keeping us in there. Those names are at highs on day while growth and tech names starting to tumble.

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AMD is trying to come back a bit today but agree the turnover looks imminent

oldarmy1 said:

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Ranger222 said:

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Selling in some of the recent high flyers and those growth names starting to turn....AMD SFIX SQ all look like they are about to roll over. Industrials and Banks keeping us in there. Those names are at highs on day while growth and tech names starting to tumble.

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Yup....Glad I sold the SQ play overnight hold at the open.

That said I am buying a bunch of $105 SQ out to Oct 19 because I think this is a shake down ahead of the $100 push.

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I'm with you on those calls, think it should push 100 in the next couple of weeks

UpstateAg said:

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I CHOSE CRON INSTEAD OF TLRY

TLRY is at the point where you want to short it, and it seems to make sense....but dare you?

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No shares to short

Everybody and their dog is negative on NIO. I've got it in my retirement accounts because the macros are China, electric vehicles and products and billions of people. The negativity is as a insane as it was on TWTR. Buy it, buy more every dollar lower and make it a dollar cost average holding long term. 2-3 years $100/share.