If the short call and the long call expire out of the money then you don't have to close it.
You don’t trade for money, you trade for freedom.
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Last: 4 hrs ago by FishrCoAg
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Look back at this thread fri july 2, it was all "overextended, due for a pullback, unsustainable", the following Tue was an inside day, wed green, little dip thurs, then rippy fri. Real similar feel to yesterday/today. Be nice if we just chop a bit to reel in those atrs then rip again....
You have to be extremely careful out of the money... I have learned the hard way.$30,000 Millionaire said:OutlawAG04 said:$30,000 Millionaire said:
I'm looking at GOOGL and MSFT being over +3 ATR and I'm like...hmmm.
Call credit spreads probably the way to play.
30k- still playing credit spreads pretty small on my end until I get more comfortable, but what type of risk/reward are you typically looking for. 8/20 or later $10 strike wide on MSFT? Are you trying to stay close to ATM or have a minimum of 5-10% OTM?
Your ATR set up has been a huge help in hunting for spreads. Thank you!
You want around a 1:1 risk to reward ratio to make it worthwhile unless you get super premium OTM.
The problem going OTM is that you may get $1 in premium on a $10 wide spread, but if that blows up - yikes
I sell 1 SD+ OTM call and put spreads when the underlining is sitting at ATR +3/-3.
I will generally get a pop in the first 3-4 days and should be closing them for around 30% but I have some that I get greedy. In a Bull market they will turn quick so you have to exit.
I have bag held a few learning while getting... well I won't used those words.
$30K has been a big help in looking at some of my trades and explaining what I missed.
Side Note: Currently feels like ATR -3/+3 is a bunch of malarkey though.
SF2004 said:You have to be extremely careful out of the money... I have learned the hard way.$30,000 Millionaire said:OutlawAG04 said:$30,000 Millionaire said:
I'm looking at GOOGL and MSFT being over +3 ATR and I'm like...hmmm.
Call credit spreads probably the way to play.
30k- still playing credit spreads pretty small on my end until I get more comfortable, but what type of risk/reward are you typically looking for. 8/20 or later $10 strike wide on MSFT? Are you trying to stay close to ATM or have a minimum of 5-10% OTM?
Your ATR set up has been a huge help in hunting for spreads. Thank you!
You want around a 1:1 risk to reward ratio to make it worthwhile unless you get super premium OTM.
The problem going OTM is that you may get $1 in premium on a $10 wide spread, but if that blows up - yikes
I sell 1 SD+ OTM call and put spreads when the underlining is sitting at ATR +3/-3.
I will generally get a pop in the first 3-4 days and should be closing them for around 30% but I have some that I get greedy. In a Bull market they will turn quick so you have to exit.
I have bag held a few learning while getting... well I won't used those words.
$30K has been a big help in looking at some of my trades and explaining what I missed.
Side Note: Currently feels like ATR -3/+3 is a bunch of malarkey though.
How far out do yall typically go? Weekly options? Out 20-30 days?
Also, you say you go out another SD, so that means +/-4 to pick your strike price target? Apologies for the multiple questions tonight, just wanting to learn.
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
You don’t trade for money, you trade for freedom.
$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
I will go ahead and speak for the board and say an emphatic YES. Definitely want to learn the more advanced type strategies
That would be great!$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
Yes please. Y'alls first session was very informative, and obviously has me wanting to learn more!
$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
No need to convince me bro. Let's do it.
This is a good series of videos by jc on spreads if anyone is interested. I spent a weekend going through these.
$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
On spreads?
McInnis 03 said:$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
On spreads?
We have people that don't know about covered calls, spreads, diagonals, and condors.
I am guessing an explanation of delta, theta, and gamma is also needed
You don’t trade for money, you trade for freedom.
1 Standard deviation delta, which in other terms is a delta of around 84%. Iron condors I will generally try to push to 90% delta.GTIAG09 said:SF2004 said:You have to be extremely careful out of the money... I have learned the hard way.$30,000 Millionaire said:OutlawAG04 said:$30,000 Millionaire said:
I'm looking at GOOGL and MSFT being over +3 ATR and I'm like...hmmm.
Call credit spreads probably the way to play.
30k- still playing credit spreads pretty small on my end until I get more comfortable, but what type of risk/reward are you typically looking for. 8/20 or later $10 strike wide on MSFT? Are you trying to stay close to ATM or have a minimum of 5-10% OTM?
Your ATR set up has been a huge help in hunting for spreads. Thank you!
You want around a 1:1 risk to reward ratio to make it worthwhile unless you get super premium OTM.
The problem going OTM is that you may get $1 in premium on a $10 wide spread, but if that blows up - yikes
I sell 1 SD+ OTM call and put spreads when the underlining is sitting at ATR +3/-3.
I will generally get a pop in the first 3-4 days and should be closing them for around 30% but I have some that I get greedy. In a Bull market they will turn quick so you have to exit.
I have bag held a few learning while getting... well I won't used those words.
$30K has been a big help in looking at some of my trades and explaining what I missed.
Side Note: Currently feels like ATR -3/+3 is a bunch of malarkey though.
How far out do yall typically go? Weekly options? Out 20-30 days?
Also, you say you go out another SD, so that means +/-4 to pick your strike price target? Apologies for the multiple questions tonight, just wanting to learn.
As for how far, I too tried to come up with mechanical trades where they are all the same but it doesn't work. The length of theta (time) I try to capture varies on what I see in the play.
In general:
Naked Puts: 7-10 DTE
Call/Put Spreads: 10-21 DTE
Iron Condors: 45 DTE
I am going to start looking at 45 DTE on the naked puts to see if I can capture around 14 days of Theta decay with less volatility in my portfolio.
Also pay attention to IV and IV Rank. Those will give you a sense of value of the trade you are looking at.
Too early to say if Mc figured of out a system but a few more weeks of this and we shall say we did.
Cant get too excited on a week where the market went nutso up, but this is far better than similar weeks in the past.
Cant get too excited on a week where the market went nutso up, but this is far better than similar weeks in the past.
I love it when you speak Greek to me
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
LOW and HD are sympathetic....didn't even consider hurricane season......
$HD took a little patience, but nice break higher!
— Christian Fromhertz (@cfromhertz) July 24, 2021
was easier to be patient w/ price above the Value Area the whole time
I also like this name in case of a bad Hurricane season https://t.co/K5vKWkYXv9 pic.twitter.com/i9avnbPe47
Great Week McMeMyselfandIrene
It looks like there could be more upside left in $LOW.
good video. $30k needs to watch at the 17:30 mark.White House Road said:
This is a good series of videos by jc on spreads if anyone is interested. I spent a weekend going through these.
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$30,000 Millionaire said:
I am guessing an explanation of delta, theta, and gamma is also needed
Alpha, beta, vega, and lambda are sending state representatives to the special session.
It would probably be good to mention those as well, even if vega and lambda may not be considered by those early in the process. Hell I don't even know if I could spit out an equation to actually quantify vega.
I like to be right, but I also trade what I see.
Made money this week short and long.
Made money this week short and long.
You don’t trade for money, you trade for freedom.
Tomas Hermensa said:$30,000 Millionaire said:
I am guessing an explanation of delta, theta, and gamma is also needed
Alpha, beta, vega, and lambda are sending state representatives to the special session.
It would probably be good to mention those as well, even if vega and lambda may not be considered by those early in the process. Hell I don't even know if I could spit out an equation to actually quantify vega.
C'mon dog:
(Change in option IV numerator) x Vega = change in option price.
I don't use this for any trading decisions and I do fine. I don't use vanna, charm, or veta either. That said, it is important to intuitively understand that an option is most sensitive to volatility change ATM vs OTM and that the impact of volatility lessens the closer you are to expiration.
You don’t trade for money, you trade for freedom.
Ragoo said:good video. $30k needs to watch at the 17:30 mark.White House Road said:
This is a good series of videos by jc on spreads if anyone is interested. I spent a weekend going through these.
I hope you guys see that I trade "against my beliefs" all the time.
You don’t trade for money, you trade for freedom.
I don't see all the posts so maybe I didn't pick up on that. Sorry. Just thinking back the last couple of weeks and remember thinking to myself that you were trying to be right to the contrary instead of trading with the trend. JC's comment about being right vs making money made me rethink those thoughts.
Bob Knights Paper Hands
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$30,000 Millionaire said:Tomas Hermensa said:$30,000 Millionaire said:
I am guessing an explanation of delta, theta, and gamma is also needed
Alpha, beta, vega, and lambda are sending state representatives to the special session.
It would probably be good to mention those as well, even if vega and lambda may not be considered by those early in the process. Hell I don't even know if I could spit out an equation to actually quantify vega.
C'mon dog:
(Change in option IV numerator) x Vega = change in option price.
I don't use this for any trading decisions and I do fine. I don't use vanna, charm, or veta either. That said, it is important to intuitively understand that an option is most sensitive to volatility change ATM vs OTM and that the impact of volatility lessens the closer you are to expiration.
That's why you're a $30,000 millionaire and I'm just a thousandaire that works at a Macy's
IN - and I think including a portion to cover the greeks and just a simple explanation of options and how they act given various time/ATM/OTM factors would be great. I know I really struggled with that when I was starting out. I had a couple trades that I called correctly on the direction but picked the wrong strike/expiry combo and that killed the trade. I had to learn the hard way (and still learning) so I could see that being a valuable topic to cover.FJ43 said:$30,000 Millionaire said:
If I can convince FJ and ibdm98 to do it, maybe it would be good to have a session covering this stuff.
No need to convince me bro. Let's do it.
Just spit-ballin' some potential topics for next zoom...
Focus on options:
1) Greeks - explanation of most important greeks to consider, how to use them in choosing option strike and expiration based on expected move in stock price.
2) Strategies - quick explanation of different multi-option trades (spreads, straddles, strangles, butterflies, condors, etc.) and when best to use based on expected move (or lack-there-of) in stock price.
Focus on options:
1) Greeks - explanation of most important greeks to consider, how to use them in choosing option strike and expiration based on expected move in stock price.
2) Strategies - quick explanation of different multi-option trades (spreads, straddles, strangles, butterflies, condors, etc.) and when best to use based on expected move (or lack-there-of) in stock price.
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Maybe include examples of the basic strategies - buying calls, selling calls (covered and uncovered), buying puts, and selling puts?
Would it be helpful if the beginners attending get paper trade accounts and you all walk them through placing some of these trades in paper accounts? Then people could discuss and update these paper trades as time goes by? That might be overly involved for you three to include but I really didn't catch on to options until I did it.
Would it be helpful if the beginners attending get paper trade accounts and you all walk them through placing some of these trades in paper accounts? Then people could discuss and update these paper trades as time goes by? That might be overly involved for you three to include but I really didn't catch on to options until I did it.
Don't overthink the Greeks.
For every $1 rise in price, the call option value will go up by the delta and the put option value will go down by the delta.
For every additional dollar rise, the call option will go up by the delta + the gamma and the put option will go down by the delta + the gamma.
For every day that passes, the option price will go down by the theta. Theta will be more extreme the closer to expiration you get. Theta decay increases more rapidly from 60 to 30 days than from 90 to 60 days.
And lastly, for every 1% rise in implied volatility, add the vega. For a 1% decrease, subtract the vega.
Do keep in mind that the Greeks constantly update based on stock price, time, and volatility. If you are trading a meme stock that is on the down swing from a big rip, expect a fall in the option price as volatility decreases. If you think a stock is going to rise $5 over the next week then do the math with delta and gamma while making sure you aren't in a period of higher than normal volatility.
For every $1 rise in price, the call option value will go up by the delta and the put option value will go down by the delta.
For every additional dollar rise, the call option will go up by the delta + the gamma and the put option will go down by the delta + the gamma.
For every day that passes, the option price will go down by the theta. Theta will be more extreme the closer to expiration you get. Theta decay increases more rapidly from 60 to 30 days than from 90 to 60 days.
And lastly, for every 1% rise in implied volatility, add the vega. For a 1% decrease, subtract the vega.
Do keep in mind that the Greeks constantly update based on stock price, time, and volatility. If you are trading a meme stock that is on the down swing from a big rip, expect a fall in the option price as volatility decreases. If you think a stock is going to rise $5 over the next week then do the math with delta and gamma while making sure you aren't in a period of higher than normal volatility.
Using this weekend to familiarize myself with Cheddar Flow. Looking for some confluence. Using finviz as a scanner for oversold stocks then looking them up on Cheddar to see what type of option activity they get.
Ran across a small cap EV auto parts company, PTRA that was a SPAC and just recently got onto the NASDAQ.
This thing is beat all to hell like most EV truck spacs. They just had some news about being the battery provider to Ford for their F650s.
This is the interesting thing I ran across on Cheddar. Tons of bullish call sweeps. There is however a $1 million dollar put buy on a $25 strike which is very in the money.
I reckon a lot of this is just noise, but trying to learn to use option flow to give myself more confluence on trades and get away from just jumping in. The months of June and July have been brutal because of that.
Ran across a small cap EV auto parts company, PTRA that was a SPAC and just recently got onto the NASDAQ.
This thing is beat all to hell like most EV truck spacs. They just had some news about being the battery provider to Ford for their F650s.
This is the interesting thing I ran across on Cheddar. Tons of bullish call sweeps. There is however a $1 million dollar put buy on a $25 strike which is very in the money.
I reckon a lot of this is just noise, but trying to learn to use option flow to give myself more confluence on trades and get away from just jumping in. The months of June and July have been brutal because of that.
I don't use any of these types of things for what it's worth.
You don’t trade for money, you trade for freedom.
$30,000 Millionaire said:Ragoo said:good video. $30k needs to watch at the 17:30 mark.White House Road said:
This is a good series of videos by jc on spreads if anyone is interested. I spent a weekend going through these.
I hope you guys see that I trade "against my beliefs" all the time.
I see it even if no one else does.
What's the skinny on $ET? Are they in oil and gas or some green ***** This guy at the bar won't shut up about it. I'd normally look it up but I mowed today and my allergies are going crazy. TIA
Prognightmare said:
What's the skinny on $ET? Are they in oil and gas or some green ***** This guy at the bar won't shut up about it. I'd normally look it up but I mowed today and my allergies are going crazy. TIA
Oil and Gas midstream company. We have some connections to them in the Permian.
Good buy?
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