Get started

Optionsstrategy

#CCJ is setting up for a bounce to the top sideAs you can all see from the daily chart CCJ pulled back on the Fib levels to that .50 area we wicked and are now potentially heading back up to potentially make new highs, me personally i would of much rather liked a pull back to .786 area before we got to see a new run to the top but either way i'm ready, looking at the options chain flow the 35 call for May 20 expiry looks to be primed as well as 34 and 32 call has a ton of oi on them as well waiting for numbers to update on the volume from yesterday to see how much is rolling into the oi or if we get a reduction in the oi levels we know people may be rolling out of those trades either way we should get an opportunity to make some nice gains off this play.
NYSE:CCJLong
by Stock_Hustle21
Bearish on GOLD : Buying cheap put options instead.Hello Traders : we are bearish on GOLD today.. but as always price can turn in any direction... however still to enter bearish setup we have decided to buy cheap Intraday options and hence limiting our maximum risk : PUT OPTION 1910 STRIKE PRICE : currently you can buy @ 1.80 euro per lot..... ( lots of options are different and smaller than spot market ) we have decided to buy 5 lots at minor investment of 9 euro approx.... if price moves below 1910 then will update you profit expiry is today at 7.30 pm gmt...... also if premium price increases we can exit early by taking profit... if not our fix loss is already decided irrespective of how much price moves to the upside.....
OANDA:XAUUSDShort
by AariTech
S&P500 Iron Condor 60% profit 76% PoP50, high IVR for #optionsI just can't resist the very high IVR for large ETFs, like SPY. My most common strategies these at corrections are the Iron Condors, neutral or negative delta. SAFETY ZONES: 200MA could act as support, ATH could act as resistance. Max profit: $375 Probability of 50%Profit: 76% Profit Target relative to my Buying Power: 60% Max loss with my risk management: ~$150 Req. Buy Power: $625 (max loss without management before expiry, no way to let this happen!) Tasty IVR: 49 (ultra high for S&P500) Expiry: 56 days SETUP : IC for , because IVR ultra high, for 3.75cr * Sell 1 SPY Jan21' 420 Put * Buy 1 SPY Jan21' 430 Put * Buy 1 SPY Jan21' 480 Call * Sell 1 SPY Jan21' 490 Call SETUP: IC for SPY, because IVR ultra high. Stop/my risk management : Closing immediately if daily candle is closing out of the the box, max loss in my calculations in this case could be ~150$. Take profit strategy: 50% of max.profit in this case with auto buy order at 1.88db. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
AMEX:SPY
by TanukiTrade
PINS Pre-Earnings StraddleDescription: PINS is in its extended down trend that began on 12FEB, back below the 50D & 200D EMA. Volatility has skyrocketed since the emotional rollercoaster that was PYPL takeover rumors, so what is priced in, and what is next for PINS? Earnings after close on Friday. Going for end-of-month options to evade the high premium from earnings week. From Deltaone on Twitter: twitter.com 66% expect beat 10.9% move priced in 19.3% avg move post earnings in previous quarters Long Straddle Levels on Chart Break-evens 52.47, +17.75% 37.53, -15.78% I consider this a risky trade, so my capital allocation will be strictly limited. Will close the position out if there is no considerable move in the underlying by 12NOV. The Trade BUY 11/26 50C SELL 11/26 40P Only invest what you are willing to lose Break-evens vary on fill *It is an option to turn this into Calendar Straddle by selling the same week strangle against it, thus reducing break-evens, or even creating a dual calendar spread. I have opted against these because I trust the small potential of PINS to hit a 20% gap this week, given the earnings scene in the broader market right now. I will update when/if I fill these
NYSE:PINS
by BarnardR
$TLT - Bond volatility low and ripeNow that Fed chiefs are selling their stocks near all time highs they can now start tapering quantitative easing and we could see bond market volatility pick up from current depressed levels.. 20 Year Treasury Bond ETF $TLT has a 52wk IVR of 3.47% and another way to insulate your long term portfolio from more volatility is to buy a straddle on bond volatility.. we’re looking at the NOV’19 ATM $148 straddle for a debit of $6.63.. and close for 50% profit or loss of premium, whichever comes first..
NASDAQ:TLT
by Click-Capital
88% PoP #ironcondor for $BABA in chinese crash #option #optionsChinese crash credit play, because of high IVRank. My Iron Condor Hunter script have signaled a safe entry here. REASONS: 1) Confirmed bear trend This is the safe playground of IC for credit. The backtested 3 years of bullish trend changed. 2) My automatic Iron Condor Hunter script My Iron Condor Hunter script gave a reliable signal to opening IC position. To subscibe for free trial of it: please follow and requeast access for free. Max profit: $188 Probability of 50%Profit: 88% Profit Target relative to my Buying Power: 23% Max loss with my risk management: ~$200 Req. Buy Power: $812 (max loss without management before expiry, no way to let this happen!) Tasty IVR: 81 (very high) Expiry: 53 days Buy 1 BABA Sep17' 140 Put Sell 1 BABA Sep17' 150 Put Sell 1 BABA Sep17' 220 Call Buy 1 BABA Sep17' 230 Call Bearish IronCondor for 1.88cr, Tasty IVRank is extreme high (81 IVR). Stop/my risk management : Closing immediately if daily candle is closing OUTSIDE the box, max loss in my calculations in this case could be 100$. Take profit strategy: 65% of max.profit in this case with auto debit order for 0.66db. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
NYSE:BABAShort
by TanukiTrade
2
APPLE BEARISH SPREAD with 73% PoP monthly exp.I'm planning to expand in better conditions. Max profit: $186 Probability of Profit: 73% Profit Target relative to my Buying Power: 22% Max loss with my risk management: ~$220 Req. Buy Power: $814 (max loss without management at expiry, no way to let this happen!) Tasty IVR: 7.7 (relative low) Expiry: 44 days Sell 2 AAPL Jun18' 135 Call Buy 2 AAPL Jun18' 140 Call Credit Call Spread for 0.93cr each, because I've f*cked up the side... (angry face) Stop/my risk management : Closing immediately if daily candle is closing BELOW the box, max loss in my calculations in this case could be ~220$. Probability of loss in this way: ~15% . Take profit strategy: 60% of max.profit in this case with auto sell order at 0.47db each. Probability of profit this way: ~85%. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
NASDAQ:AAPLShort
by TanukiTrade
4
SAGE 62% PoP Bearish Iron Condor after event My favorite bearish neutral trade for today. Losing only upside, I like the extreme high IVR values to play. Reasons to play this: 1/ After event, big selloff, high implied volatility. 2/ Extreme High Implied Volatility, good for credit strategies 3/ I can boost my original bearish vertical spread with 2 bottom legs at fib 0.786 to boosting my reward almost zero risk to the downside (max loss below strike 35 is $17 ...) 4/ Secure zones are 88$ and the 40$ So the winner is the negative delta Iron Condor Strategy. Max profit: $483 Probability of Profit: %62 Profit Target relative to my Buying Power: 42% Max loss with my risk management: ~$250 Req. Buy Power: $1050 (max loss without management at expiry, no way to let this happen!) Tasty IVR: 92 (ultra high) Expiry: 45 days Buy 1 SAGE Jun18' 35 Put Sell 1 SAGE Jun18' 40 Put Sell 1 SAGE Jun18' 90 Call Buy 1 SAGE Jun18' 105 Call IRON CONDOR for 4.83cr with negative -8.3 delta, because IVR is very high and I'm bearish. Stop/my risk management : Closing immediately if daily candle is closing ABOVE $90, max loss in my calculations in this case could be 250$. Probability of loss in this way: ~20% . Take profit strategy: 60% of max.profit in this case with auto sell order at 1.69db. Probability of profit this way: ~80%. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
NASDAQ:SAGE
by TanukiTrade
$ENPH Bullish Earnings PlayI trade almost entirely using options, shares are typically only there to hedge Greeks or if a stock has a terrific opportunity to sell covered calls. When you are trading in options you need to understand that while technical analysis and fundamental analysis are still important, what is usually most important is how the options chain looks-- what is the Implied Volatility curve, the skew/smile, and etc. This is primarily why Earnings present such an incredible opportunity because people throw money all over the place betting on some kind of move, and usually over pay. So note that this play is less about Enphase Energy as the company or what support/resistance levels I see and etc, its more of a "This is a killer value" option spread. Background Enphase is a solar energy stock. Solar stocks and electric vehicle (EV) stocks as well as some others have been really beat up recently but I've been seeing a ton of reversals which lead me to believe another "trash flash" rally has just begun. Looking at $IWM or $US2000 you can see a wedge or sort of diamond top has broken through to the upside. Technical My bottom pane has my Price Action Index indicator, which shows a breakout to the bull side already underway on this stock. You can see that on the Bollinger Band as well-- it was squeezed in consolidation and now the band is expanding in size as the stock hovers above the top band. Options Analysis There are some levels of resistance above that I think this stock can go through pretty easily until it gets to that $190-$210 cloud. This is so obvious that options traders have attacked OTM calls for near-term expirations pretty aggressively. Here is a (crude) diagram of the $ENPH smile graph for this Friday’s expiration-- This smile is called a “forward skew”. Note that it is INSANELY weighted towards the bullish side. Options traders are pricing in the potential for a giant move up. Therefore, we try to exploit it . As this near-term 4/30 expiration has priced in OTM calls very expensively, the next expiry afterwards, 5/7 has about 20% lower IV At The Money, and OTM we’re looking at about 25% less IV. It looks like this: $200 Call for 4/30 has an IV midpoint of 120 $195 Call for 5/7 has an IV midpoint of 90 This spread is affectionally dubbed the “Poor Man’s Covered Call” but it is simply a Diagonal Call. It is somewhat similar to being long shares, however I want to limit my risk to the downside and not get stuck holding shares for a long time. If it does backfire by a lot then that means my long calls will go worthless If the stock doesn’t move at all from earnings, I make the decision of: rolling my short calls to my long date (5/7), buying to close the short calls after they’ve been IV Crushed and hoping for some upside to come later, or taking a small loss (say $200-400) If it goes mildly up, I make a mild profit If it hits $200 there and expires at that price, I take my maximum profit: my choice of closing the spread then, holding my long call (I would probably roll another short one against it) If ENPH does some insane move over 3 standard deviations into the moon, say $240, I still make profit but that short $200 call digs at it (I have more extrinsic/time value with my option being 1 week further to expiry than the short one does) What is really nice about this setup is you have ALL of the Greeks working with you! I am positive Delta, very positive Theta , a smidge positive Gamma, positive Vega, and even positive Rho (not that that matters much here). Past Earnings What I love about this earnings play is that of the past 12 earnings reports Enphase has had, only 2 have had a move to the downside . The other 10 have all been positive-- +1.0%, +4.2%, +8.8%, +9.5%. +9.5%, +14.0%, +18.7%, +29.3%, +30%, and +42.4%. A move up to $220 is not out of this realm of possibility. But all I am looking for is a move up that is at least 2.0% or so. And the beautiful thing is that the Average Move of the last 12 earnings comes out to +/- 16.6%, which would be about $201. Trade Entry I got my spread filled at a $1.98 debit. I put my walk limit order in and started working on this idea and got filled there. I am plenty fine with that fill but if you are patient the Bid-Ask spread is currently $1.72-$2.33 with a mid of $2.03. From my personal experience, getting filled can be a tedious process because I want the best possible price but I also hate being too cheap and watching a good trade pass me by. In the end a nickel or dime difference on the fill is not the killer, it is the trade not working. Best of luck. Let me know if you have any thoughts or ideas or are playing this as well. EARNINGS ARE TOMORROW/TUESDAY AFTER MARKET CLOSE! Please remember that this is NOT financial advise and I have no certifications or qualifications to give financial advise.
NASDAQ:ENPHLong
by chrism665
1
Unusual Options Volume SKLZ $20 APR 30 Call SKLZ earnings date is May 04 2021 Earnings run up and break of down trend. Stock moved with increasing volume today. Possible break of trend into run up for the earnings with good possible upside if it holds at current levels. April $20 Calls Lots of volume today 9,000+ contracts traded. Heavy open interest on May 21 $20 thru $35 strike calls indicating more up side. Consider 21 May options calls above 21.50. Down trend channel break $18.11 Trigger $21.50 Target 23.50, 24.57 resistance, stretch target 27.50 Wide SL close below $17.00 Close contract before ER to be on the safe side.
NYSE:SKLZLong
by marketaction_live
SOYBEAN upward move play with Teucrium Soybean $SOYB trust fund (1) Futures Technical Analysis Bullish triangle with RSI breakout. Enought space for bullish move. s3.tradingview.com (2) SOYB trust fund I've skipped the futures instrument, because I'm not like options on futures. My choice for Soybean play is $SOYB with relative high IVR value. Optimal for Short Put Vertical strategy, similar TA here, with RSI pullback. s3.tradingview.com (3) Clear uptrend Higher Lows Higher Highs. s3.tradingview.com CONCLUSION: Max profit: $685 Probability of Profit: 55% Profit Target relative to my Buying Power: 47% Max loss with my risk management: ~$200 Req. Buy Power: $1320 (max loss without management at expiry, no way to let this happen!) Tasty IVR: 66 (ultra high) Expiry: 35 days Buy 10 SOYB May21' 20 Put Sell 10 SOYB May21' 22 Put Credit Put spread for 0.685cr each, because IVR is relative high. Stop/my risk management : Closing immediately if daily candle is closing BELOW the box, max loss in my calculations in this case could be 200$. Probability of loss in this way: ~25% . No stress above $21.1 level. Take profit strategy: 65% of max.profit in this case with auto sell order at 0.27db. Probability of profit this way: ~75%. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
AMEX:SOYBLong
by TanukiTrade
Why Options Are DangerousIn today’s article, I want to answer a few questions about why options can be dangerous. What are the risks of trading options? Are puts or calls riskier? Why is option selling risky? We’ll also talk about the safest options trading strategy. So let’s get started and let’s jump right in. Buying Calls & Puts First of all, you need to understand that there are different types of options. There are call options and put options. So calls versus puts, which one is riskier? Some people think that trading puts are riskier, while some people might think that trading calls are riskier, but this is not the case at all. The key question is that you should ask yourself is, are you BUYING options or are you SELLING options? There’s a huge difference between buying and selling, as well as different levels of risk involved between the two. So when you’re buying options, the maximum amount you can lose is the premium you paid. So let talk about a very specific example. Let’s look at a trade I took with TSLA and let’s say that we want to trade a call. So let’s maybe say a 700 call and right now the price is $700. What is the maximum that you can lose? Let’s say that we are bullish on Tesla and we believe that Tesla might go above $750, and we want to buy a call with a strike price of 750. So a 750 strike call expiring next week costs around $1.70 (at the time of writing this article on March 19th, 2021). Now options come in 100 packs, so this means that you’re paying $170 for this option. So in this case, if TSLA does not go above 170 by next Friday, you would lose the $170. So this is very easy, the maximum amount that you can lose is the premium that you paid. On the other hand, you are bearish on Tesla. You believe that it might actually go down to $560 so you’re thinking about a put option with a strike price of 560 that expires next week. A put with a 560 strike price expiring next week is $4.50 so a little bit more, pricier here. Again, since options come in 100 packs, this means that your total risk here is $450 per option traded. It’s the same risk here because it doesn’t really matter whether you’re buying calls or you’re buying puts. The maximum amount that you can lose is the premium. Now, on the other hand, there are SELLING options, and when you’re selling options, this is when your risk is almost unlimited. When you’re buying options, and let’s just say you want to buy a call, this means that you want the stock to go up. So going back to our TSLA example, if we would buy a call 750, that it is expiring next week for $170, if Tesla goes above 750, we make money. If Tesla goes below 750 or stays at 750, we lose the premium or $170. So not really a big deal. Now, how much money could we make on this one? Well, if we buy a call for 750, we have the right to buy 100 shares of Tesla for $750. So let’s say that Tesla closes at $800. So in this case, our profit is $800, minus the $750 that we bought Tesla for, which is $50 per share. Since options come in 100 packs, this means that we would make $5,000 in profits. This is why people love trading options. Because if you think about it, we’re risking $170 and can potentially make $5,000 if Tesla would go up to $800. Now, let’s quickly do an example here for buying a put. So buying a put and in this case, you want the stock to go down. Using our example for TSLA again, we will buy a put with the strike price of 560 for $4.50. So our total risk here is $450. So now if Tesla goes below $560, the strike price here, we make money. Now, if Tesla stays above 560, we lose the premium. But that is the maximum that we can lose. So even if Tesla rallies right now to 800, we would only lose $450. So that is pretty cool, right? Let’s say Tesla goes to $500. So we were able to sell the shares for $560, now we can buy it back for 500. So this would be $60 per share. Since one option equals 100 shares, it means that we would make $6,000 in profits. So as you can see, with options, you can benefit from a stock going up, as well as a stock going down, and the really cool thing is that you can risk a little to make a whole lot. Now, here’s the challenge with this. If you buy a call, you only make money if TSLA is really going above $750. So if it stays below, that’s not enough for the buyer of an option to make money. If Tesla goes sideways well, same here, right? Then you not only won’t benefit from it, but you also lose the premium. If Tesla goes down, you also lose the premium. So if you think about it, there are actually three ways how you can lose money and only one way how you can make money, and this is if Tesla really shoots up. This is why many people, including myself, are interested in SELLING options. Selling Calls & Puts What are the pros of selling options? The first pro is that you don’t need to be right about the direction of a stock to make money. Here is an example I’m in right now (at the time of this writing on March 19th, 2021) with LL Lumber Liquidators. So right here, Lumber Liquidators, I actually sold a put with a strike price of 22. When does the buyer of a put make money? Well, the buyer of a put makes money if it goes below $22. For me, the seller of a put, I make money if Lumber Liquidators goes up, it goes sideways, or it goes down. It can go down all the way to 22. This is a drop of a little over 10%. So if you think about it, if LL can go down by 10% and I am still making money and this is why again, this is why selling options is so fascinating. So you don’t need to be right about the direction and you can keep the premium. So here’s the deal, the premium that you receive is exactly what the buyer is giving you. So the premium is rather small, right? So the cons are the premium is rather small, and this is where your risk is almost unlimited. So back to our example here with Lumber Liquidators. I sold a 45 of the 22 puts, and I received $0.20 per share, so $20 per put option. $20 multiplied by the 45 options means that I’m making $900. So this is the premium that I receive. However, here’s the deal. The buyer of a put has the right to sell 100 shares at the strike price. So what does it mean for me? So the seller, which is me, has to buy LL at $22, and again, this is where one option means 100 shares. So for me here, since I’m having 45 options, this means that I would have to buy 4,500 shares. Because this is where we get to the risks of this strategy here. Now, again, Lumber Liquidators can drop more than 10% and I will be just fine. But what happens if it drops below, let’s say to $20 from $22. OK? So I would have to buy Lumber Liquidators at $22, and therefore I would lose $2 per share. Here, in this case, I have 4,500 shares times $2, this means that I would lose $9,000. Now you get the idea of why selling options is fairly risky, because I’m receiving $900, but if it only goes down by $2, I’m already losing $9,000. But what if it gets worse? What if LL drops to, let’s say, $15, right? Again, I have to buy LL at 22, so I would lose $22 minus $15, $7 per share. Since I have 4,500 shares, time $7, this is where I would lose $31,500. OK. So as you can see, it is super risky if you don’t know what you’re doing. Now, I have been doing this for a long time here, selling premium, and I’ve been doing really, really well. Analyzing Risk With RIDE Let talk about a particular trade that I made with RIDE . I sold the 21.50 put and RIDE dropped. I sold 47 contracts, 47 contracts, which means that I own 4,700 shares at a price of 21.50. RIDE right now (March 19th, 2021) is trading at $13.50. So right now, RIDE is at 13.50. So this means that I lose (21.50, minus 13.50) $8. So I’m losing $8 per share and I’m having 4,700 shares, bringing me down to a total of $37,600. Now, let’s talk about it. How much money did I make selling premium on RIDE? Just on RIDE here. I sold the puts initially, then I sold calls, I sold calls, and I just sold a few more puts. In total on RIDE, thus far, I collected $4,935 in premium, but I also have an unrealized loss of $37,600. So it’s super important that you understand that there is risk involved. Now I know my way out of this. I know how I can trade my way out of this if needed. So I collected $4,900, but right now I’m down that amount. However, this means that my net loss is if I would close it right now, which I’m not intending to do, would be $37,000 minus the $4,935, let’s just say $5,000 to make the math easy, is $32,600. That would be a real loss. This is why it’s super important that you understand the risks when you’re trading options. Safest Options Trading Strategy Now, one of the questions that I receive all the time is, “what is the safest options trading strategy?” The safest options trading strategy is covered calls, and here’s why. When you are trading covered calls, it means you own the stock, and now you are selling calls against it. So what does it mean when you are selling calls? When you are selling calls, it means you have to sell the stock at a certain price. Back to my example with RIDE I own 4,700 shares, and I own those at $21.50. So this is where if I sell calls at 22.50, so this means that I have to sell RIDE shares at $22.50. So how much money do I make? So I bought at $21.50, and I sell at $22.50, so this means that I’m making a dollar profit, $1 profit per share. And since I have 4,700 shares I would make $4,700 plus the premium I receive for selling the call. OK. So this is in addition, and therefore, covered calls are by far the safest options trading strategy. The only way how you can lose with this strategy is when the stock goes down. This is where you already own the stock, and therefore, if you want to sell calls against it, it is the safest option trading strategy, at least based on my experience and my opinion.
REducation
by rockwelltrading
1
Naked PUT for $TME crash with 87% Probability of ProfitMy tasty pick for yesterday: Tencenrt Muc Entertainment big crash. (1) Prev. support holds (2) Fibo resistance at fast fall holds Max profit: $120 Probability of Profit: 87% Profit Target relative to my Buying Power: 31% Max loss with my risk management: ~$150 Req. Buy Power: $380 (max loss without management at expiry, no way to let this happen!) Tasty IVR: 104 (ultra high) Expiry: 56 days Sell 2 TME May21' 15 Put Short put option for 0.6 cr each. Stop/my risk management : Closing immediately if daily candle is closing BELOW the box, max loss in my calculations in this case could be 150$. Probability of loss in this way: ~7% (!!!) Take profit strategy: 60% of max.profit in this case with auto sell order at 0.24db. Probability of profit this way: ~85%. Of course I'll not wait until expiry in any case! If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and for fresh option ideas FOLLOW ME( @mrAnonymCrypto ) on tradingview !
NYSE:TMELong
by TanukiTrade
When To Take Profits on Options I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Options trading is really fascinating, and it’s a great way to make money, and I think it is very important to know when to take profits, especially if you like trading The Wheel as I do. So the question is, when should you take profits when trading options? How exactly do you figure this out, is there a formula for it? In this article, I’ll share some guidelines for how and when you should take profits on an option trade. We will answer the question of whether you should let options expire or take profits early. I will show you some very specific examples of two trades that I have going on right now (at the time of this writing on March 17th, 2021). One of them, I took profits today, and the other one I’m still holding on and I will show you exactly why. ]How To Calculate Profits On Options Firstly, let’s talk about how to calculate profits on options. In order to address this, there are two types of options traders. One type of options trader are ones that are buying options, and the other, which I feel is very lucrative, and this is what I’ve been doing for a long time, is selling options and collecting premium. I want to actually talk about selling options and receiving premium, because this is, as I said, what I’ve been focusing on recently with trading The Wheel Strategy. My year-to-date profits on this account so far are more than $54,000 selling premium on options, and I’ll show you exactly how to do this. So when selling options, you’re receiving premium, and for me, the most important metric here is the so-called premium per day or PPD. MARA Example The first example that I want to give you is my position with MARA. Looking over my transactions with MARA over the last 30 days. I sold puts at a strike price of 20, and for this, I received $0.28 in premium per option that I sold. Now options come in 100 packs, so this means that per option I made $28. Now, in this specific example, I sold 50 options total, so this means that I’m receiving a premium of $1,400. I put this trade on March 10th, and these options expired on 3/19. This is $1,400 in premium in 9 days. This comes to $155.55 in premium per day, or PPD. Now this includes weekends. My rule is I’m buying back the option when I can get 90% of the maximum profits, but there’s an exception to this rule. First, let me tell you what that means. So again, I sold each contract for $28, for $0.28. The idea is to buy back the option at $0.03, and this is exactly what I did today (March 17th). So we have another two days to expiration. So today, I bought back a total of 50 contracts at $0.03, and by doing so I made $0.25 in profits on MARA. Now, this is where again, we’re looking at 50 contracts, times $25, so this is $1,250. I was in this position for 7 days. So $1,250, divided by 7 days, means that I made $178.57 a day. Let’s just round to $179 per day. As you can see, $179 is more than the $155.55 that I planned per day. Now let’s think about it. If I would keep MARA right now, if I would keep this option until expiration, but what would happen? I would make an additional $150 in three days. This means that now my premium per day is only $50 per day. This doesn’t make sense to me because this here is actually bad, because my plan was to make $156 per day, and I was able to make $179 per day by buying the options back. If I would hold on to this trade and let it expires worthless. So this is where here, and let it expire worthless, right? This is what would happen. I would make an additional $150 in three days and the premium per day would only be $50. That does not make sense to me at all. This is why here in MARA, it made sense to buy back the put option because by doing so, it frees up buying power meaning that now I can sell more puts. So the idea here is that I’m selling more puts and making more money on the new puts than I would make holding on to MARA. DKS Example Let’s go over another example with a position I have right now with DKS . I sold the 66 strike on March 10th. I sold 15 of them and I received $75 in premium. 15 contracts times $75 comes to $1,125. So let’s do the math right now and see if it makes sense to close this trade today (March 17th) or if we should keep it, and we’re using very similar logic here. So we sold the 66 put expiring March 19th, and we received $75 per contract for it, $1,125 total. We then divide this by 9 days to get to our premium per day, which is $125. So right now, on March 17th, let’s see how much DKS is still worth. Right now, the bid/ask for DKS is $0. 05 over $0.10, and that’s really interesting because I want to buy it back at $0.07. Let’s say right now, if I would place an order right now, I could buy it back at $0.10. Should I do it? If I did this, I would make $75, minus $0.10 ($10 per contract), which is $65 per contract. For all 15 contracts, I would make $975. We find our PPD by dividing $975 by 7 days, which comes to $139. So if I really wanted to, and if I needed to free up some buying power, I could do this. But let’s see what happens if we hold this for a few more days. So if we hold DKS until expiration, we can make an additional $150. It might actually make sense to close it out because $150 over the next three days does not make a lot of sense. When I looked at the option earlier, DKS suddenly jumped from 78 to almost 79. This is a 10% jump in 30 to 45 minutes. When we opened this morning, first, we went down, and then we went a little bit up, and then we were hovering right around where we opened. Earlier this morning, the DKS put was trading at $0.25. So the question is earlier this morning, would it have made sense to close it? Earlier today on March 17th, I could have bought it back for $0.25. So that wouldn’t have made sense, right? Because then if I’m buying it back for $0.25, I would only make $0.50. So this here, $0.50, this is then $750 in seven days, and if we divide $750 by 7 days, this is $107 premium per day. As you can see, the $107 premium per day is less than what I expected. If I would hold DKS to expiration, we can make an additional $0.25, $25 times 15 contracts is $375. Now, if you take the $375 in 3 days, that would be $125 premium per day. So when I’m getting $125 premium per day, this is when it does not make sense to sell it just yet. Should You Take Profits Early? So this is the important thing because the question always is, do you take profits early, or hold until expiration? Well here’s my formula for this. So I want to give you a very specific formula that you can use if you want to. If the current realized premium is a premium per day, PPD, is larger than the planned PPD, this means close it out early. If the remaining premium per day is smaller than the planned premium per day, close it. Only if the current realized premium per day is smaller than the planned premium per day, in this case, hold it. If the remaining premium per day is larger than the planned PPD in this case, you want to hold it. Summary This is why today I wanted to show you my formula for when to take profits on options, especially when you are an options seller. You see, selling options and receiving premium is what we do with The Wheel Strategy, and the most important metric here is the premium per day (PPD). This where using the PPD, you can actually get down to a formula of when exactly you should buy or sell. This is where it’s just a good rule of thumb if you don’t want to do all these calculations. So the rule of thumb is I close a trade when I can realize 90% of the maximum profits.
NASDAQ:MARAEducation
by rockwelltrading
3
VIX Bottom played outVIX bottom play for the next 7 days. Don't use any technical indicator on VIX if it's too low, just move: I don't need big timeframe to playing this out, so 7 days is far enough. Max profit: $90 Probability of Profit: 47% Profit Target relative to my Buying Power: 42% Buy Power: $210 (max loss without management) Max loss with my risk management: ~ $100 Tasty IVR: 11.3 Expiry: 7days Buy 3 VIX Mar24' 19 Call Sell 3 VIX Mar24' 20 Call Debit call spread for 0.7 debit each Stop/my risk management : Closing immediately if daily candle is closing below $19 Take profit strategy: I'm taking at the 75% of max.profit in this case with auto sell order. (at 0.95 credit) If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
TVC:VIXLong
by TanukiTrade
1
[FUBO] Iron Condor - the FuboTV Inc EVENT play Another lazy trade for today, just an event play. Very risky to holding neutral positions in uptrend, so literally just for a few days on table. Event plays are usually a "trade and pray" strategy, so I'm not preferring (TastyTrader Bob and Tom like it, but I've sucked many times width them) In current case I've decided to take the risk. (1) MurreyMath distances More than 5 MurreyMath fraction distance (5/8) for break even border, current price almost the middle of it. I'm judged to secure area 2.5 fraction up, 2.5 fraction down. (2) Nearest pivot points detecting danger area Secure level upside is $54, downside: $30. Inside this I can sleep well. Outside this I'm looking for any kind of minimal profitable exit point. CONCLUSION: Iron Condor for today event Buy 1 FUBO April16' 20 put Sell 1 FUBO April16' 25 put Sell 1 FUBO April16' 60 call Buy 1 FUBO April16' 65 call Expiry: 45 days Take profit: after event at the first possible moment. Risk management: I'm closing the trade immediately - if the daily bar closing outside my strikes - and I'm cutting my loss . (no matter what I'm believing)- usually I'm losing mutch less than my max profit in this case. Danger zone check every day.
NYSE:FUBO
by TanukiTrade
2