SheriffBarclay said:

---

So shortly after I buy snap puts a ton of analysts come out with buy recommendations.
What the ****.

---

You are going to see a ton of twitter investors jump ship from Twitter and invest in SnapChat. Snap is a more attractive advertising vehicle than twitter for business. Take your loss and buy puts on Twitter, it is going to die a slow death.

careful on buying puts (or calls for that matter)...not only do you have to be right but you have to be right pretty damn quick or the theta decay will eat you alive (conversely is how I literally make my living but being short outright premium isn't for everyone and there are many other ways to skin a cat in this game)

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

I'm not saying that to tell you how to do your business, just a heads up for people following this thread looking to explore options...don't buy them, unless you are extremely good at tech analysis you don't know anything about direction, no one does....consider buying the stock and selling a call against (1 per 100 shares) or if bearish short selling the stock instead of buying puts, selling puts against so you at least have some probabilistic edge in one direction and you limit your loss if it goes agasint..... or if you are still dead set certain you know something, outright short or buy the stock at least you'll have all the time you want to be right

*unless you are just screwing around on a lotto ticket trade with really cheap crap

one of the Simpsons old intro's with Bart at the blackboard should be:
I won't buy options
I won't buy options
I won't buy options
I won't buy options
I won't buy options
I won't buy options

I don't mean this tone to be contentious, just my $0.02 having been there and pissed away a lot of money doing it FWIW. If you are great at timing markets and being right immediately, go nuts, you're a unicorn.

Appreciate you sharing your advice and lessons learned. I've got the scars from some "can't miss" options and STILL have cravings to dive back in. They're like heroin to me...

aggiemetal said:

---

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

---

Sounds like you never had a plan if price went against you and you didn't have/follow rules.

---

redsox34 said:

---

Its approaching channel support and a 30 RSI. looking to hold around 2 months.

Got in at 7.33

---

brd79 said:

T&P's

---

Back above BE in UNG a little over a month into trade. We will see.

Keep the prayers coming though, they seem to be working haha

Purchased GLUU & FOLD this morning.

GLUU is definitely a speculative trade but is right at a flattening 200SMA. Its done well above that in the past. Have a 2 ATR stop set.

FOLD is right above 200SMA with a bullish MACD monthly crossover and a 42% short float.


Anyone else have any recent trades?

---

aggiemetal said:

---

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

---

ebdb_bnb said:

Sounds like you never had a plan if price went against you and you didn't have/follow rules.

---

huh? if you buy an option and price goes against you, you're toast...it's gotta go your way and pretty damn quick

actually pretty disciplined, if I had a winner I'd always take off 1/2 off initial bump so I'd be covered on the rest pretty well...however those were rare events (actually getting direction right, quickly)

my predictive skills were crap, always have been, probably always will be, I started making money consistently when I learned I could be dead wrong and still win

I don't care the strategy, no one is winning the battle of a long put/call going against w/out some luck of it turning around dramatically

if you're great at picking and timing them, more power to you, you'll see great unchecked gains but most can't do that and probabilistically it's a poor set up....I love selling far OTM options, b/c I can be dead wrong on direction, even piss poor timing and still come out ahead vast majority of the time (unless I just choose to lose a battle if move is too violent, too soon against, and usually then I've been set up pretty good with juiced up volatility to reset the position with a lot more premium, easily making back that "lost battle" and then some)

---

aggiemetal said:

---

careful on buying puts (or calls for that matter)...not only do you have to be right but you have to be right pretty damn quick or the theta decay will eat you alive (conversely is how I literally make my living but being short outright premium isn't for everyone and there are many other ways to skin a cat in this game)

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

I'm not saying that to tell you how to do your business, just a heads up for people following this thread looking to explore options...don't buy them, unless you are extremely good at tech analysis you don't know anything about direction, no one does....consider buying the stock and selling a call against (1 per 100 shares) or if bearish short selling the stock instead of buying puts, selling puts against so you at least have some probabilistic edge in one direction and you limit your loss if it goes agasint..... or if you are still dead set certain you know something, outright short or buy the stock at least you'll have all the time you want to be right

*unless you are just screwing around on a lotto ticket trade with really cheap crap

one of the Simpsons old intro's with Bart at the blackboard should be:
I won't buy options
I won't buy options
I won't buy options
I won't buy options
I won't buy options
I won't buy options

I don't mean this tone to be contentious, just my $0.02 having been there and pissed away a lot of money doing it FWIW. If you are great at timing markets and being right immediately, go nuts, you're a unicorn.

---

SheriffBarclay said:

Thanks for the post..lots of info to dig through here. How do you make your living? Short outright premium? Not sure I follow.

---

it's way up in this thread somewhere

basically I prefer the /ES futures options, I like to sell options when there is some volatility so I can collect more and select strikes farther from the money (I prefer going about 2 standard deviations away from the current price, about 95% odds of closing OTM (out of the money) )...I aggressively manage a 50% winner every time, though I'll take a 30% or so gain if it comes in really quick.....no homeruns in my game but I make a good living hitting singles, doubles, and the occassional triple

basically say /ES is trading at 2350. Sell 2150 puts for x price. As time wears on and that price isn't breached, time decays that x-premium value you collected up front when you sold them to open. Say you collected 3.00 to open and bough to close at 1.50, you made $150 per contract. You can always hand on let them expire worthless but studies show consistently managing the 50% winner is the smart play over time, as the longer you're exposed a healthy winner can turn against you and you're wasting a lot of buying power with not as much left to collect vs. banking realized profits, resetting going farther out in time to collect more)....if you're patient and enter with high vol, the benefit is not just time decay in your favor, but vol crush as things revert

in event of an outlier move, i either aggressively scalp futures against my position or hit the sideline (again lose a battle not a war). . .I actually love those moves b/c while I may have lost some time and ROC (return on capital) I never lose overall, in fact I'm set up quite nice to reset with premium ridiculously far away from the current price

---

---

+ 1 more quotes (click to expand)

aggiemetal said:

---

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

---

ebdb_bnb said:

Sounds like you never had a plan if price went against you and you didn't have/follow rules.

---

aggiemetal said:

huh? if you buy an option and price goes against you, you're toast...it's gotta go your way and pretty damn quick

---

I'd agree if you were buying otm weekly options, otherwise pretty damn quick doesn't apply.

I think most people get in trouble when they play otm options with short expirations. Under that scenario, you would need price to move in your chosen direction and fast. I'm a TA guy that buys 2 weeks out. If I don't like the price movement, then I close at small loss, but I'm not toast by any stretch.

---

---

+ 2 more quotes (click to expand)

---

aggiemetal said:

---

I used to do it a lot when I started b/c it looked promising, theoretically I could hit a homer and I knew my max loss going in, of course I almost never homered and almost always realized my max loss LOL

---

ebdb_bnb said:

Sounds like you never had a plan if price went against you and you didn't have/follow rules.

---

aggiemetal said:

huh? if you buy an option and price goes against you, you're toast...it's gotta go your way and pretty damn quick

---

ebdb_bnb said:

I'd agree if you were buying otm weekly options, otherwise pretty damn quick doesn't apply.

I think most people get in trouble when they play otm options with short expirations. Under that scenario, you would need price to move in your chosen direction and fast. I'm a TA guy that buys 2 weeks out. If I don't like the price movement, then I close at small loss, but I'm not toast by any stretch.

---

yeah you've gotta be a TA guy to have a chance at it, I learned early that game wasn't happening for me (not saying it doesn't for others, my mentor is really good on that end but I couldn't trade his style so I morphed into another direction)...efficient market theory and the quant approach just works better for me and others who don't have to be right to consistently make good money...a few can do it (more power to you) but most traders aren't getting over that way (again I'm saying this with new guys in mind and my humble advice directing their efforts to using options to give them the edge in each trade)

GLUU up about 9% past 2 days on huge volume. Hope it holds.

aggiemetal said:

---

in event of an outlier move, i either aggressively scalp futures against my position or hit the sideline (again lose a battle not a war). . .I actually love those moves b/c while I may have lost some time and ROC (return on capital) I never lose overall, in fact I'm set up quite nice to reset with premium ridiculously far away from the current price

---

Aggiemetal- just want to say thanks for your insight! I signed up with tasty trade last week, and am just trying to soak up as much as I can. It's about like drinking from a firehose. Your strategy appeals to me, so I've been putting it into practice, mostly selling OTM calls and puts. This seems to eat up a lot of buying power though, so any recommendations on how to reduce that?

And would you mind expanding on the comment above? Say /ES is trading at 2350, and you sell 2150 puts, but an outlier move down occurs. How would you look to scalp against?

I'm no AggieMetal, but:

When you're selling OTM strangles on stocks, your notional value on that trade is 100 shares of the stock. Your BPR is ~20% of the strike price, so you're already working on 5:1 leverage - even if you're delta neutral on the trade. That is because if the price moves heavily against your position, there is the possibility of the losing side's delta going to 1.

You can lower your BPR by buying a further OTM call/put and turning the trade into an iron condor. By making the trade a defined risk you: lower your probability of profit, lower your max/targeted profit, and lower your ability to manage the trade when it moves against you.

You'd be better off looking for lower priced equities to trade than try to leverage up an SPY strangle.

-----------------------------------------

What he's probably doing when he scalps against a losing position:

Assume the trade started with /ES at 2350. He sold a May put on the /ES with a strike price of 2150. That put starts out with a delta of .05. As the /ES drops, the delta increases and you lose more and more. To scalp the future against that position you would sell /ES on the way down. Now the futures contract has a delta of 1, so it makes much more money on the way down than the short put loses; therefore he won't leave the short /ES position on long, just a couple points at a time to recoup losses from his short put.

---

aggiemetal said:

---

in event of an outlier move, i either aggressively scalp futures against my position or hit the sideline (again lose a battle not a war). . .I actually love those moves b/c while I may have lost some time and ROC (return on capital) I never lose overall, in fact I'm set up quite nice to reset with premium ridiculously far away from the current price

---

Vito said:

Aggiemetal- just want to say thanks for your insight! I signed up with tasty trade last week, and am just trying to soak up as much as I can. It's about like drinking from a firehose. Your strategy appeals to me, so I've been putting it into practice, mostly selling OTM calls and puts. This seems to eat up a lot of buying power though, so any recommendations on how to reduce that?

And would you mind expanding on the comment above? Say /ES is trading at 2350, and you sell 2150 puts, but an outlier move down occurs. How would you look to scalp against?

---

I like /ES b/c obviously it's essentially a general market index (not one stock that can do God knows what), the buying power on short /ES puts vs. a lot of other underlyings is realtively cheap and still offers really good premium far OTM, even when volatility isn't as high as I'd like, and it trades pretty much around the clock so if a big event happens I can adapt whenever (ie I was in a big AMZN strangle a few summers back when that big late Aug move happened, I knew overnight I was gonna get hammered and couldn't do anything about it--still through my process three weeks later I was ahead but still I never put myself in that spot again)

I'm typically short the put side, (put skew means you get crap premium for the call side, really having to go far closer to the money than I'd like for the privilege of less premium, no thanks)...if the market is feels like it may dive I'll sell an outright future or two against my puts for extreme downside protection...typically the puts outpace the future, unless it's a situation like we've had since the Trump thing where the market is screaming higher, but in that kind of environment I'm not really trying to cover my backside as much (I'm aware at all time and can make the move with a quick push of the button but I'm not doing that unless need be)

Even in the midst of a big move there is time to react and throw on those short futures as a parking break. Brexit worked out well, when it started tanking I rode them until the circuit breakers went off. Then I jumped on that overstated volatility and sold puts until my hands bled. When the waters felt a little safer I dumped the short futures. Same thing on election night.

Note:My goal with the outright futures isn't usually to make extra money, if it happens great and sometimes it does, but it's just the protection if things start going sideways. If the market starts screaming up against them, the puts are far outpacing what equates to (- $500) every ten points up on each future.

Gator2_01 said:

---

I'm no AggieMetal, but:

When you're selling OTM strangles on stocks, your notional value on that trade is 100 shares of the stock. Your BPR is ~20% of the strike price, so you're already working on 5:1 leverage - even if you're delta neutral on the trade. That is because if the price moves heavily against your position, there is the possibility of the losing side's delta going to 1.

You can lower your BPR by buying a further OTM call/put and turning the trade into an iron condor. By making the trade a defined risk you: lower your probability of profit, lower your max/targeted profit, and lower your ability to manage the trade when it moves against you.

You'd be better off looking for lower priced equities to trade than try to leverage up an SPY strangle.

-----------------------------------------

What he's probably doing when he scalps against a losing position:

Assume the trade started with /ES at 2350. He sold a May put on the /ES with a strike price of 2150. That put starts out with a delta of .05. As the /ES drops, the delta increases and you lose more and more. To scalp the future against that position you would sell /ES on the way down. Now the futures contract has a delta of 1, so it makes much more money on the way down than the short put loses; therefore he won't leave the short /ES position on long, just a couple points at a time to recoup losses from his short put.

---

that's it more or less, just a cheap way to leverage and neutralize deltas when things start feeling like they might go sideways, or when they flat out do LOL

always start giving yourself plenty of capital to wiggle if something goes against fairly soon, either to take advantage and tack on more with nice and juiced up VOL or just to shoulder an initial hit easier...I go into every trade extremely confident b/c well you should be when it's 95% of breaking even...you've got to be able to take heat in perspective of what's an actual threat and what just stings on a move that really isn't a big deal or a threat of breaching anything

as I've stated before my biggest weakness is the half joking FOMO (fear of missing out) and rushing to put new stuff on vs. waiting for some volatility to come in (usually doesn't hurt too bad but when you go in like that and then the market has a nice little correction, you've got price and volatility swell working against your price)...plus if you go to big on entry and this happens you've got nothing left to take advantage of that nice downmove....still even then like I've said I suck on picking direction, my timing is usually fairly bad and yet the math allows me consistently take enough money out of the market to make a living

if you are good at TA and can mold it into this that'd be a great marriage of style on paper, but I'd caution thinking you know something can get you into more trouble than keeping your size in check and trusting the probabilities...it's really hard to be one of those rare few good enough at TA to make a living at it or at least make a nice side income at it (in fact I'd wager most of their success comes from the trade management and ability as a trader in general, vs. making money on picking the right direction each time)

find your own style, tons of ways to skin a cat in this game but if you force one that isn't yours it wont' work...Randy kills it with TA and his profit taking strategy and I'll always credit him for getting me out of the mindless passive investing mutual fund world and into this game, as well as giving me countless time, but I simply can't trade his style....I'll never be accused of being the smartest guy in the room, my technical analysis is garbage, LOL my timing is atrocious, and my style is not for everyone but it works for me..."simple is my wheelhouse"

hope this stuff is helpful

---

aggiemetal said:

---

in event of an outlier move, i either aggressively scalp futures against my position or hit the sideline (again lose a battle not a war). . .I actually love those moves b/c while I may have lost some time and ROC (return on capital) I never lose overall, in fact I'm set up quite nice to reset with premium ridiculously far away from the current price

---

Vito said:

Aggiemetal- just want to say thanks for your insight! I signed up with tasty trade last week, and am just trying to soak up as much as I can. It's about like drinking from a firehose. Your strategy appeals to me, so I've been putting it into practice, mostly selling OTM calls and puts. This seems to eat up a lot of buying power though, so any recommendations on how to reduce that?

---

awesome...yes it is, tastytrade is a wealth of info and sometimes hard to know where to start

*careful on the calls---you've got to go a lot closer to the money to get paid...the only vehicle I used for strangles was AMZN back when it was in the 500-600 range and behaved itself much better, but eventually got a little more erratic and obviously really expensive . . .I'm way less confident in selling premium outright in stocks than I am in index type products....anyways I liked AMZN though b/c you could get paid far from the money even when vol was low, and is why prefer /ES

also be aware in my style I give a lot of room for error (95% OTM at a minimum on entry, which allows about a two standard deviation move in a worst case, and no I'd never hang in that long if something went that screwy)

to avoid getting overwhelmed, learn the language (basic terms and how they work, puts, calls etc) then dial into their market measures on selling premium and strangles (I don't usually do strangles anymore but the studies are great for general premium selling)

you can always buy far OTM crap to reduce BP if you have too

SPY sucks b/c you don't get paid to go far OTM.../ES is relatively cheap but buying even farther OTM garbage against will lower BP

I prefer not buying crap unless I have to (doing it for BP is different than my above thing about strongly suggesting you don't buy puts/calls as a position itself), I also don't like "defined risk" condors b/c you are paying more a more (commissions on open and close and the extra legs themselves) ....just cuts into profitability too much overtime....not knocking those that do it, some just can't get comfy being naked short premium so they need that illusion of safety, but there are better ways for my money to protect myself (if need be) without hurting my bottom line

Gator and Metal, I really appreciate the insight! Your posts are extremely helpful in speeding up my learning curve and helping me to mold a strategy. It's interesting to go back and read some of the older posts, and actually understand some of the stuff I glazed over before. Anyway, I really do appreciate you guys sharing your knowledge.

Nat gas with a rip today off a small pullback

edit on this line:
sorry can't do this more timely, pretty nice bump since I started typing, moving to jsut a few handles under the overnight low as of now
anyways sorry as it was pretty good intense morning and was selling premium until my hands bled upon the oppty. that hasn't been there for a long time (pretty much since Trump's win sucked the real vol out of the market for so long-a few here and there's but nothing to move the VIX like this)
========

don't do it if you don't know what you are doing yet but this (obviously this isn't a game you play until you have a sound understanding of what the risk is and how comfy you are with it) is a great day for selling premium if you know what you do and are comfortable with the risk

doesn't get much better, Volatility is super juiced and with the mean reverting vol index nearing 17 it won't be as dramatic even if it keeps ripping (say 17 to early 20s)...has it's biggest impact up to 17 area...high around 15.90 today ...still room to run but big vol expansion today

we can crash further (today isn't even much of a move at all relatively) and vol can hurt a little more up but as I said in above, it's a mean reverting animal and it's blown a lot of it's load today (of course it can get worse but today is really nearing the sweet spot, I'd almost get greedy waiting for it to yield more for entry just to watch a big up move suck it all away again, who knows, I sure don't and why I like this style--it gives a ton of room for error when your game isn't picking direction/timing or that unicorn BS only a handful are really good at)

in your favor with this style:
location so far from current price
potential vol crush, aiding time decay and any price action at your back --that's 3 things that can work in favor of the position (compare that relative to buying a stock, where it is 50/50 up down, and it would move like that right from your entry so zero leeway, buying power sucks, no time benefit helping you earn, no potential/likely vol crush helping you earn)
full disclosure once again--the tradeoff is limited profitability (again I ain't chasing unicorns or trying to crank homers) and unlimited risk (I'm comfy with it know the unlikelihood and my finger on the button always watching my backdoor and entering each position with 95%+ odds, yes black swans/outliers occur so if you can't monitor these with the attention they deserve don't do it, or do it as a vertical or something to define your risk)
---and on a day like today, buying power even better (I scooped up some earlier where it was about $600 a short put for the same premium i'd normally collect costing me a lot more and far closer to the current price)

anyways super juiced FAR OTM /ES puts all about 95% POP (Prob of Profit, or prob of breaking even @ $.01+):
45 days--can scoop into the 1900 level first time in forever and collect around 3.00 (actually $150 max don't ask why it's just how they price it) ---anyways 1990's going for 3.00 at 95% OTM
38 days--2025's same thing
31 days even you can find 2060's with same wrap and that's pretty dang good considering current price in high 2330's

*important note---remember I stick closely to the tastytrade studies showing the wisdom of taking a 50% winner so I'm planning on sticking around the full 45 days, in fact on a 45 day trade about the max time before collecting a 50% winner is 21 days, I'm usually out a max of two weeks)

if it's not your style totally fine and I get it, but if it is, these are days to jump on awesomely juiced up premium

don't ask me about other products sure there is a lot out there, for my style I just adapted towards the /ES, doesn't mean it's right or for all I just prefer a rep of the index not just being at the mercy of individual stocks...it's got really low buying power and I can access it around the clock if some big random world event goes against

LOL of course the market bouncing 15 handles after doing all that doesn't hurt either

I'm sure Randy's laughing as usually my initiation goes against me direction-wise immediately LMAO (again part of the beauty, really doesn't matter but I'll take the wind at my back hard too with price action and vol crush when I can get it )....yeah but usually I paint the bottom and top for everyone else to benefit LOL

This is very helpful. I appreciate you explaining all of this. I only have about $3k in my Tastyworks account as I'm learning, but I sold a few strangles yesterday on the high IV with my limited BP. Thanks!

Comanche_Ag said:

---

This is very helpful. I appreciate you explaining all of this. I only have about $3k in my Tastyworks account as I'm learning, but I sold a few strangles yesterday on the high IV with my limited BP. Thanks!

---

cool,if your BP is that limited I would diverge from my thing and suggest buying some crappy cheap OTM call/puts to lower BP, gives you room to wiggle and or sell more (essentially this would take it from a strangle to an Iron Condor) ...or of course not as far away long puts/calls to actually define your risk a bit ....nie thing about tastyworks is there dirt cheap commissions and zero closing costs, make it much easier to add these extra wings without it cutting into your profit margin as much (true gamechanger they've brought to the table)

w/ that kind of account check out the tastytrade archives, "tastybites" segments for strategies/tips on trading those smaller accounts...the money you make on that size will be tough sledding but the value will be in the learning moving forwards, then when you're sound with stuff and fund your acct. bigger, you'll kill it

awesome to hear you're running with this stuff man, best of luck

what underlying did you trade?

Quote:

---

cool,if your BP is that limited I would diverge from my thing and suggest buying some crappy cheap OTM call/puts to lower BP, gives you room to wiggle and or sell more (essentially this would take it from a strangle to an Iron Condor) ...or of course not as far away long puts/calls to actually define your risk a bit

---

Thanks, I'll definitely look into this to increase my BP.

I sold KRE, VXX, and XLI all 38-45 days out.

cool, nice liquid products (remember everyone when you are doing options it's ideal to have something to trade with liquidity-- around a minimum of 1 million volume--, that way you can get in and out at fairer prices, also look to products with bids no wider than a nickel) ...i broke the rules on the latter part w/ AMZN back in the day b/c I didn't mind working the bid a lot but it was also crazy liquid and I could go so far away and collect good premium it would usually come back in my favor anyways but anyways full disclosure there



**be very careful with volatility products like your VXX thing...i would define the risk on that VXX play for sure (even the main tastytrade guys who've got giant stones on their trades are careful in how they trade volatility), maybe add tighter +puts/calls if it's a strangle to make it a traditional iron condor

I went ahead and bought VXX calls/puts ~$1 out from my strangle positions. Thank you for your help and responses.

Hope you are still holding the SNAP puts. Under 20 right now.

Comanche_Ag said:

---

I went ahead and bought VXX calls/puts ~$1 out from my strangle positions. Thank you for your help and responses.

---

you take any profits on your puts side or was it worth it?

nice thing about tastyworks zero closing cost, no hesitation in managing winners aggressively (that's a big part of this game and they've made it a lot easier)

Nope, it's not there. Here's what I've got:

Screenshot

Does tasty have anything to summarize your trading activity, i.e. Gains/losses, return on capital? I've opened and closed 5 positions, all winners so far, and have another 5 working, so just looking for a way to gauge my success. I saw that you can download your transaction history to a csv file, but figured there might be something easier.

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.

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?

If you've downloaded the TastyWorks trading software there are Daily P/L and YTD P/L in the top of the main window for each account. You can also go to the History Tab and filter by Equity and Date to see your overall P/L in each equity over all your trades.