Thanks Gator! I need to download...I've just been using the website since I didn't want to download it on my work laptop.

On the web trading app from the Portfolio tab you can choose "Dashboard" to see your percentage of winning trades and Net Liq.

Gator do they have an iphone app yet?

I know they've been working on it (haven't been able to follow broadcast as close lately and am waiting for next round of my position to come in before I close it and transfer funds to my tastyworks account)

Ragoo said:

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As a general strategy I love buying assets with hearty dividends and selling OTM covered calls for a month or two or more out. I make sure the premium on the calls is enough and the strike price is high enough that if called out I met 15-20% and if not called I get the dividend on top of the premium already pocketed.

The hard part is finding them. Maybe a separate thread is needed?

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for example. you can buy netflix today at $146 and sell $148 covered call for $5.00 expires this week. If called out you've made nearly 5% in a week.

Ragoo said:

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Ragoo said:

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As a general strategy I love buying assets with hearty dividends and selling OTM covered calls for a month or two or more out. I make sure the premium on the calls is enough and the strike price is high enough that if called out I met 15-20% and if not called I get the dividend on top of the premium already pocketed.

The hard part is finding them. Maybe a separate thread is needed?

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for example. you can buy netflix today at $146 and sell $148 covered call for $5.00 expires this week. If called out you've made nearly 5% in a week.

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NFLX announces earnings today after the close.

ebdb_bnb said:

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Ragoo said:

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Ragoo said:

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As a general strategy I love buying assets with hearty dividends and selling OTM covered calls for a month or two or more out. I make sure the premium on the calls is enough and the strike price is high enough that if called out I met 15-20% and if not called I get the dividend on top of the premium already pocketed.

The hard part is finding them. Maybe a separate thread is needed?

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for example. you can buy netflix today at $146 and sell $148 covered call for $5.00 expires this week. If called out you've made nearly 5% in a week.

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NFLX announces earnings today after the close.

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yep and with the trend in the price today it seems the market thinks positive results.

aggiemetal said:

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Gator do they have an iphone app yet?

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Not sure about iPhone, but they have the Android version released as an early Beta. I don't trust it enough to use/rely on it.

Gator2_01 said:

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My NFLX trade today is a 135/160 strangle.

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explain, please sir.

Gator2_01 said:

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aggiemetal said:

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Gator do they have an iphone app yet?

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Not sure about iPhone, but they have the Android version released as an early Beta. I don't trust it enough to use/rely on it.

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thx I called earlier

they said around late May/early June for iPhones

Ragoo said:

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Gator2_01 said:

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My NFLX trade today is a 135/160 strangle.

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explain, please sir.

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I sold two options contracts:
NFLX Apr 21 160 Call
NFLX Apr 21 135 Put

My total premium for this trade was $301. As long as NFLX trades between those two strike prices through Friday, I'll keep all of the premium. Ideally, I'll close the trade on Tuesday for $150-$200 of profit based purely on volatility crush and a less than expected move.

This trade costs me ~$2400 of margin (aka Buying Power Reduction). Essentially I'll be looking for a 5-8% return on capital over just a couple of days.

A comparison to your trade:

Strangle - Max profit $300, BPR $2400, Max ROC 12.5%, Max Loss INFINITY (if the stock raises to infinity by Friday, lol)

Covered Call - Max profit ~$700, BPR $14600, Max ROC 5%, Max Loss $14600 (if the stock drops to zero by Friday, lol)

While my Strangle trade has Undefined Risk, it can actually handle a 10% move by the stock in either direction before you start to lose money.

The covered call will provide you a 5% gain on a 10% up move, but you'd also see a 7.5% loss from a 10% down move. It starts losing money if the stock drops more than 2.5% (the premium collected from the call).

Your covered call is a bullish strategy: you make money if the stock price raises and lose money if it drops. My strangle is neutral: I make money if the stock price raises or lowers - to a point. After a 10% move in the stock price in either direction I'll start to lose money FAST.

You own the underlying asset to do this, right?

No requirement to own an underlying to sell options (with the proper permissions on your account). Only the obligation to deliver if exercised.

I had the same NFLX short strikes with a $5 wide iron condor. Looks like it might work out on the opening for us, Gator2_01.

if you don't own the stock how do you deliver if the price does move outside of the channel and hits either strike price?

Closed the trade for $0.36 at opening to net $265 overnight (11% ROC).

I do not own the underlying. Whether this was a winning or losing trade my plan was to close the position prior to any contract being assigned.

When you are assigned on a short option contract, you either buy (short put) or sell (short call) 100 shares of the underlying at the strike price for every contract you wrote. Assignment is handled by your broker, the exchanges, and clearing houses. You would basically log into your account after expiration and find yourself short or long shares in the underlying. You could then either hold on to the shares or exit the position in the open market.

Jumped back into SN pretty big yesterday before close.

Going for a wide Iron Condor in IBM today. Buying the wings to define risk and make it an IRA compatible trade.

Buy IBM Apr 21 185 Call
Sell IBM Apr 21 172.5 Call
Sell IBM Apr 21 170 Put
Buy IBM Apr 21 157.5 Put

Credit received / Max profit: $381 | Max loss: $869

Right now volatility is pricing in a +/- $4.26 move by Friday expiration. I break even as long as the price move stays in that range.

Afterhours move is definitely outside of the expected range. I'll watch the price movement once the market opens to see how I'm going to manage it. Either wait to see if it trades up into the breakeven range, roll down and out to give me more space and time, or close it out for a loss.

It's much easier when it all works out perfectly.

But then you wouldn't build a solid skill set!

I closed the call side for $0.03. Now I'm just going to watch that pesky Put side today. Right now the trade is down ~$400. This is why you stay small with earnings trades!

Edit: After the volatility dropped off I ended up closing the position for just over a $400 loss. I didn't like the volatility offered so I'll chalk this up as a loss and move on. Thanks IBM, have a nice day.

oldarmy1 said:

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Gap fail this morning. It had bounced back and held Friday. 20k DOW likely test but with 3000 points of momentum rally there is lots of room for a momentum correction.

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Firstly, thank you oldarmy and the rest for your contributions to this thread, as it is a great learning experience for a novice like me.

I was hoping someone could explain how this is a Gap Fail in this chart. Why are the areas that I have marked up in the same chart not "Gap Fails"?

[img][URL=http://www.imagebam.com/image/03f821544190787][/URL] [/img]

Also is it still the notion that the DOW will likely test 20K?

Thanks in advance!

wasn't able to post earlier b/c we're traveling and I was driving but the play I mentioned last week selling juiced up puts when we had that nice vol spike and the VIX being around 16, I was able to take off this morning as a 50% winner of max potential profit with the modest up move and vol crush...a 9.5%+ winner in relation to the net liq when I put it on

was planning on staying on the sidelines for a while while I waited but fortunately the late liquidation break happened and I used this afternoons move that juiced vol back over 15 to get my toe back in the water but small, with contracts 37 and 42 days out around the 3.00 mark...it could easily go against early but that was a decent little sell off so I'll start here, if we get more action down I can work into more and even farther away from the current market...again a lot of leeway to not have to time things perfectly with this method so not real concerned if pullback continues, in fact I'd be elated to be able to really start building the position bigger this early...however, if it pops back up again or meanders as the balance continues giving me easy theta decay, great small as I am now I've got enough on to fund our RV site dues in Miss & Bama for the next month

not always fun and roses, Feb and Mar sucked b/c vol got totally sucked out of the market, save for a few moves where I was already overly committed...but still was never down just not as up as normal.. . .not a lot of things in life afford you the possibility of winning up,down or sideways...finally following my own advice of staying small and being patient for the opportunity, then going big when the stars align so you've got dry powder to kill it...I love me some Trump but finally the "just b a t s h i t e crazy enough to give the market some good vol here and there" is paying off

That gap move correlated perfectly with the February 3 day resistance gap upward. It's not a long term directional indicator when major support/resistance hasn't been developing but it is usually a good trade indicator. As a good trading rule markets/stock gaps down (or up) and doesn't recover in the first 30 minutes then go with the gaps direction for a larger move. And you'll notice the markets have been trading sideways with moves above and then below that gap center line.

Covered calls have once again been the big winning strategy. Currently 20400 DOW break would be high alert for correction with 20750 broken upward would likely mark a move back to retest above 21k highs.

Vito said:

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Btw, good luck Comanche! I started 3 weeks ago and it's been fun. My account is up 2% in 3 weeks, and I've learned about 3,000% in the process.

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I closed all my positions yesterday when volatility dropped. I made 50% profit or greater on all of them (small numbers still). I really like the risk/reward relationship with these investments. Thanks!

Sold some strangles this morning.

X 21/25 in June for 2.00
JNPR 28/30 in June for 0.98

Also sold a CMG Iron Condor 445/455/525/535 in June for 3.30

Looking for 50% profit in each.

For those of us still holding on to TWTR today is a good day (so far).

Does TWTR go higher from here?

Tax cut info come out yet?

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Vito said:
Btw, good luck Comanche! I started 3 weeks ago and it's been fun. My account is up 2% in 3 weeks, and I've learned about 3,000% in the process.

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I closed all my positions yesterday when volatility dropped. I made 50% profit or greater on all of them (small numbers still). I really like the risk/reward relationship with these investments. Thanks!



that's a good job by you

I did the same. Two nice quick rounds for 50% winners. One I started few weeks ago that I mentioned a page or two back when we got that nice VOL swell which I closed last Wednesday, then later that day I was content to be on the sidelines and wait but low and behold market had a nice correction, VOL swelled again and I was able to open another decent sized round of short puts. Got that fortuitous bounce Sunday night and closed them at 40% or so winners without blinking. Now hands in pockets for the moment, waiting for some more overpriced fear and just playing with covered calls in the meantime.

Any reason you use covered calls when VOL is low? It's the same risk profile as a short put.

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Interesting. So is there any opportunity to set up buy/sell orders on the underlying stock if it moves close to 10% in either direction, or are you limited because you're on margin? Or is this even desirable to set up these hedges?

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The most efficient way to manage a strangle is to roll the untested strike up/down towards your tested strike and then roll both positions forward in time.

You can use the underlying to hedge on moves against you, but that would drastically increase the margin required to maintain the trade.

For example:

On 3/29 I sold a 32/29 May 19 Strangle in OIH for $1.20. At the time it was trading at ~30.50 making this trade a neutral trade with break evens from $33.20 down to $27.80.

On 4/21 when OIH moved solidly below 29 (my short put strike) I rolled the 32 call down to 30 for a credit of $0.31 - making my total credit received $1.51.

I was planning on rolling or managing the trade tomorrow, but today as the price fell below $27.80 I closed the trade for a loss of $10. I was only looking for a $60 win on the other side of this trade, so I'm content with the outcome.

If I were to have sold 100 shares of OIH when it passed through 29 while leaving both short options alone I would have closed this position at this point for a $96 win ($120 from the short stock - $24 total loss from original strangle).

The big difference here is that the margin required for my original trade was ~$650. Once you add in the short stock you are looking at a margin requirement of $2100 total so it would effectively triple the size of your trade.