So how does selling the cash settled index options work since there's no underlying security like a stock or ETF?
Does it require margin?
Does it require margin?
Stock Markets
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Last: 6 min ago by Brian Earl Spilner
Did I just teleport to Halletsville?
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
Always an angle!
irish pete ag06 said:
I will probably find a way to screw this up, but man... buying and selling TQQQ and SQQQ based on the 8/21 daily EMA cross looks like a great way to swing trade. I've been doing some manual back testing. I think I am about to start doing this.
I would be happy if I could just time half of those right.
I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
Txducker said:Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
That's why OA only bought 600 contracts. ;-).
The only thing with OA's strategy is that you need to manage whether or not the shares are exercised to you.
You could close 0.02 in the money like we did yesterday and then instead of going up, the market pukes a buck. In that scenario you need to opt out of exercising. And you obviously have to have enough margin to cover the options you bought.
You could close 0.02 in the money like we did yesterday and then instead of going up, the market pukes a buck. In that scenario you need to opt out of exercising. And you obviously have to have enough margin to cover the options you bought.
You don’t trade for money, you trade for freedom.
You control the option. I called out the shares only after getting the move up allowing me to short it. If the market had remained flat or just above the $189 strike I just cancel the assignment.
That said, you do have to have the funds available for the shares being traded/shorted.
That said, you do have to have the funds available for the shares being traded/shorted.
BaylorSpineGuy said:Txducker said:Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
That's why OA only bought 600 contracts. ;-).
I bought 20, but I like that thinking!
https://www.newsweek.com/student-loan-debt-relief-checks-could-mailed-two-weeks-biden-says-1755288?amp=1
I haven't done any in depth research to confirm if "checks" are really going to be mailed out yet, but this is horrible. They won't paydown their debt, they'll spend it and inflationary pressure will be massive. Some estimates are the cost to be between 600B - 1T. That amount of stimulus unleashed on the economy will drive inflation through the stratosphere.Quote:
President Joe Biden has predicted that checks could be sent to those who applied for his student loan debt forgiveness program within "two weeks," despite the program being tied up in court.
The president's program, which forgives up to $20,000 in outstanding debt for borrowers making $125,000 or less per year, was temporarily frozen following a Republican-led legal challenge last week. Applications for the program opened on October 15, with 22 million out of around 44 million eligible Americans applying during the first week.
When asked about the freeze during a NewsNation interview on Thursday, Biden said his administration would win the court case and that the program would soon resume.
We won't see 2% inflation again this decade.
I agree with Cem on this one. The Fed can do everything they want to "curb" inflation but fiscal policy will continue to win in the long run.
As someone posted in the comments below... this is how you also artificially inflate GDP numbers.
Look for Fed in coming YEARS to suggest that the long standing 2% "normal" inflation target should be "realisticaly set in the 5% to 10% range" https://t.co/VnMW2ZtAT2
— Cem Karsan 🥐 (@jam_croissant) October 29, 2022
I agree with Cem on this one. The Fed can do everything they want to "curb" inflation but fiscal policy will continue to win in the long run.
As someone posted in the comments below... this is how you also artificially inflate GDP numbers.
Swear to God it's one step forward and two steps back with this administration. What's the point of continuing to raise rates if they're still pulling **** like this?
irish pete ag06 said:
We won't see 2% inflation again this decade.Look for Fed in coming YEARS to suggest that the long standing 2% "normal" inflation target should be "realisticaly set in the 5% to 10% range" https://t.co/VnMW2ZtAT2
— Cem Karsan 🥐 (@jam_croissant) October 29, 2022
I agree with Cem on this one. The Fed can do everything they want to "curb" inflation but fiscal policy will continue to win in the long run.
As someone posted in the comments below... this is how you also artificially inflate GDP numbers.
Inflation is secular, and it routinely takes 5-10 yrs to unwind inflation once it hits 5% or more. That's historic context.
I think it'll be difficult to make new ATH's in the indexes with these sorts of headwinds.
To make it more germane to this current market, I think we need to have added focus on the DJIA/DIA. It's already bumping up against the 200 daily SMA. NASDAQ not even up at the 50 daily SMA yet, and SPX/Y between the 50 and 200.
If DIA rally fails at 200, that may give us some insight.
https://m.youtube.com/watch?utm_campaign=Oktopost-ReSolve+Riffs+&utm_content=Oktopost-Twitter&utm_medium=social&utm_source=Twitter&v=fUDf7oKXc5Y&feature=youtu.be
This is another recent video by him. Around the 9-12 min mark, he discusses seasonality and what to expect particularly around December OpEx/VIXperation.
oldarmy1 said:
You control the option. I called out the shares only after getting the move up allowing me to short it. If the market had remained flat or just above the $189 strike I just cancel the assignment.
That said, you do have to have the funds available for the shares being traded/shorted.
I only mention it because many brokers auto exercise and some of the newer folks on here may not know that they have an action to take with this strategy and your window of when to make that call is limited. With fidelity you only have until 3:15 central time even though FINRA's cut off is 4:30 central.
You don’t trade for money, you trade for freedom.
Excellent point!
oldarmy1 said:BaylorSpineGuy said:Txducker said:Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
That's why OA only bought 600 contracts. ;-).
I bought 20, but I like that thinking!
That would be $23M in margin! And you'd have to short 60,000 shares AH. It would take you 3 orders to do it and balls of steel.
You don’t trade for money, you trade for freedom.
$30,000 Millionaire said:oldarmy1 said:BaylorSpineGuy said:Txducker said:Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
That's why OA only bought 600 contracts. ;-).
I bought 20, but I like that thinking!
That would be $23M in margin! And you'd have to short 60,000 shares AH. It would take you 3 orders to do it and balls of steel.
$23M in margin? That's nothing! I heard a rumor that OA is offering to buyout Jimbo's contract with his market winnings this week.
Ummm, no.
Hey man... if you owe the bank $23,000 that's your problem$30,000 Millionaire said:oldarmy1 said:BaylorSpineGuy said:Txducker said:Txducker said:I always wondered why options are bought in the last hour of trading besides closing sold positions. I now learned a new strategy. I like how the $0.03/call has such a low risk of losing a significant amount of money versus the potential profit. The risk reward ratio is very favorable. Thanks for sharing.oldarmy1 said:
One of my rare strategies paid off nice. Bought the expiring $389 Spy calls for $0.03 thinking we get some follow on buying after hours. I shorted at $390.25 just now for $1.25 gain so I call out the shares at $389 to close the trade.
Always an angle!
That's why OA only bought 600 contracts. ;-).
I bought 20, but I like that thinking!
That would be $23M in margin! And you'd have to short 60,000 shares AH. It would take you 3 orders to do it and balls of steel.
If you owe the $23 million, that's their problem.
ProgN said:
https://www.newsweek.com/student-loan-debt-relief-checks-could-mailed-two-weeks-biden-says-1755288?amp=1I haven't done any in depth research to confirm if "checks" are really going to be mailed out yet, but this is horrible. They won't paydown their debt, they'll spend it and inflationary pressure will be massive. Some estimates are the cost to be between 600B - 1T. That amount of stimulus unleashed on the economy will drive inflation through the stratosphere.Quote:
President Joe Biden has predicted that checks could be sent to those who applied for his student loan debt forgiveness program within "two weeks," despite the program being tied up in court.
The president's program, which forgives up to $20,000 in outstanding debt for borrowers making $125,000 or less per year, was temporarily frozen following a Republican-led legal challenge last week. Applications for the program opened on October 15, with 22 million out of around 44 million eligible Americans applying during the first week.
When asked about the freeze during a NewsNation interview on Thursday, Biden said his administration would win the court case and that the program would soon resume.
I think it's just his way of talking about it. Semantics. Don't think they're actually sending checks out, Joe just being Joe.
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AG
Just for reassurance, otm short calls on twtr are safe, right? If i can't close them the holder can't exercise them (not sure why they would want to)
Most new traders (me included starting) are trying to do far too much: Combining macro analysis with news & multiple technical indicators to get nowhere. Less is more: 1 or 2 patterns, mastered to a high level & repeated, with blinders on to the rest all that's needed for growth
— Adam Mancini (@AdamMancini4) October 30, 2022
Interesting futures action so far. Lately there has been more vol than this.
At a get together tonight with a friend. He has $150K expiring Friday on deep OTM puts. He's calling for a 12% drop this week to 3400.
He's putting his money where his mouth is.
He's putting his money where his mouth is.
What's the reasoning?? I'm not a heavy hitter by no stretch but 12% is a ton in one week.
bmoochie said:
What's the reasoning?? I'm not a heavy hitter by no stretch but 12% is a ton in one week.
Yeah I was surprised myself. But he swore he wouldn't miss it again after he missed the big drop in June. He's hedged with $50K to the upside this week
His main reason reasoning is that this trading is all algorithmic and this pattern forming now is same as that of late May to early June. He thinks Nov 4 will be a tank. He says this week will mimic the June 9-13 week. Argued that all the media is taking about a pivot, etc., and he is confident Powell will come out hawkish on Wednesday again.
I'm somewhat skeptical since all the seasonality and flows, etc.
Sounds kinda like a revenge and fomo trade...not wanting to miss out after getting burned last time in June.
I think Powell would have to go even more directly Hawkish than Jackson Hole to get to 3400. I just don't see it. I actually think the surprise may be a 25/50 instead of 75 hike.
I think Powell would have to go even more directly Hawkish than Jackson Hole to get to 3400. I just don't see it. I actually think the surprise may be a 25/50 instead of 75 hike.
I might could see Powell surprising the market again downward.
All the respect in the world to that guy. I would also gladly be on the other side of that trade. 12% in a week is intense and just generally doesn't happen.
$30,000 Millionaire said:
All the respect in the world to that guy. I would also gladly be on the other side of that trade. 12% in a week is intense and just generally doesn't happen.
Yeah, he's got silly money anyway, and I hear what he's saying, but I'm not going blind here. Will follow the tape. WSJ guy Timiraros seems to be leaking hawkish speak over the weekend. We shall see….
A 3750/3650/3550 butterfly is 7.25, less tomorrow morning.
That's a better way to play a fed puke as a hedge.
10K upside and you only need between 3560 and 3740 to make money.
That's a better way to play a fed puke as a hedge.
10K upside and you only need between 3560 and 3740 to make money.
Might actually be a fun XSP trade for the board. Waste $70 for the chance to make a grand.
You don’t trade for money, you trade for freedom.
Last week, 3925-30 was my target in #ES_F and we hit and pulled back for some needed cool-off before continuation. This week is all about FOMC
— Adam Mancini (@AdamMancini4) October 31, 2022
Plan today: Cool-off ideal. 3875-80, 3855 supports. Bulls need > 3900 to restart the leg to 3925, 3955-65. 3855 fails, we sell to 3820 https://t.co/8Gaglqy1oh
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I'm not getting short here. This doesn't make sense to me and when it doesn't make sense I sit out.
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