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Pmcc

PLTR - Double bottom? Good setup & price for LT hodlers/LEAPSDear Tradingview Community This areas already functioned as a support last week, when it bounced around the 18 mark. The double bottom is the sign of a reversal but, this doesn't mean it's 100% sure it's gonna happen. The current micro-economics (inflation and FED fear) don't look good for a lot of growth-stocks and a further slide down is still possible (but let's hope not). I'm not gonna set a PT because i'm in it for the LT, but on the chart you can see some supports and resistances. Have a good trading week! Disclosure: I opened a LEAP position for the 19th of 2024, so that i can practice my PMCC
NYSE:PLTRLong
by UnknownUnicorn7024067
1
Options Idea: Buy The Jan. 21, 2022 INTC 40.0 Call @ $13.90Intel just gapped down after its last earnings release as margins tightened from almost 60% last year to 53.3%. Trouble lies ahead as well since Intel’s 7-nanometer manufacturing is delayed which will give AMD a 6 month head start to eat away at Intel’s market share. Intel has responded by initiating a huge $10 billion stock repurchase program. This is in addition to the Oct 2019 repurchase program already in place, bring total repurchases to around $20 billion. Even though Intel is in trouble, we think there’s an opportunity for a longer-term play. Observe the historic Price/Sales ratio for Intel in the weekly view. We are buying today at 2.75. We’ve marked entries over the last few years at the 2.75 PS level. Every entry would have been successful over a 1 year holding period. The 50 week average on the PS ratio for Intel is 3.32. Nevertheless, we like to reduce risk with options, so we are not going long in Intel. We are buying a deep in the money LEAP call on Intel today at $13.90, which gives us unlimited profit potential above $53.90 and limits our losses below $40. Since this is such a long term LEAP call, we have 16 months (or 72 weeks) to sell monthly or weekly calls against this position. So while our current breakeven point is $53.90, we intend to lower our cost basis through the sale of out of the money shorter term calls. This is strategy is called the poor man’s covered call. The important point is that with a $53.90 breakeven, the lowest priced call we can sell is $54. If we sell a lower priced call and INTC were to rise too quickly, the trade could lose money. Selling next month or next week 15 delta out of the money calls should produce more than enough income to compensate us for the loss of dividends on this position and reduce our breakeven to $51, which is where Intel was trading today when we opened our long position. Our objectives for short call income generation against this position are as follows: Initial Objective: $2.90 (Extrinsic Option Premium), reduces breakeven point to $51 Secondary Objective: $4.55 (5 Quarters Dividends on 100 shares) Stretch Objective: $13.90 (100% of capital recovered) If we complete our initial objective we’ll have recovered our extrinsic option premium, giving us the benefit of going long in INTC at no additional cost. If we complete the secondary objective we’ll have not only recovered the option premium, but also generated 5 quarters of INTC’s $0.33 dividend, making our position equal to a long position in INTC, but at 20% of the capital outlay. And our final stretch objective is to recover $13.90 over the life of this call, recovering our capital early. Standard Exit : We exit the trade for a profit when the PS ratio on INTC approaches 4. Early Exit : We exit the trade for a profit as soon as INTC has recovered the 50-week moving average. 20-INTC-03 Opening Date: Sep 1, 2020 Expiration Date: January 21, 2022 DTE: 507 IV: 35.81% IV Percentile: 69% Odds of Winning: 32.60% (before selling short calls) Odds of Losing: 67.40% (before selling short calls) Win: > 53.90 @ Expiration (before selling short calls) Loss: < 53.90 @ Expiration (before selling short calls) Reg-T Margin: $0 (long position, uses $1390 cash) Chart Legend Green Area: 100% Win Zone. If we finish above or in the green area, we’ve made a profit on our call. This is a long call, so our potential gain is unlimited. Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss. Since we’ve bought a call instead of gone long, we have no additional losses below $40. 1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included. Follow us here on TradingView to get updates as we adjust this trade with the short calls we will be selling against this position.
NASDAQ:INTCLong
by OptionsCoach
10
TRADE IDEA: SPY SEPT 28TH 221 LONG/APRIL 27TH 285 SHORT CALLThis is a long-dated trade I re-up on a quarterly basis and with the March quarterly approaching (I've still got a June quarterlies setup on), it's time to consider a setup using the September quarterlies. I generally don't post these, because they have the pace of a covered call, and most aren't interested in basically watching paint dry or grass grow, opting for faster-paced trades in the 45 day or under cycle. However, if you're one that's pressed for time (and capital; a full on covered call with the same short call strike will run you north of 277.00 here), this is probably the slow-paced neutral to bullish assumption trade for you that you can potentially manage by just looking at the short call aspect once a week to see if anything needs to be done with it. As with any diagonal, there aren't many metrics to show. Currently, the mid price for the setup is 58.36 in the off hours, meaning that you're paying 58.36 for a 64-wide spread with a max profit potential on setup of 64-58.36 or 5.64, which would generally occur if price finishes above the short call strike at expiry. However, max profit can also potentially increase over the life of the setup, depending on how many times you roll the short call and how much you receive in credit for each roll, since each roll for which you receive a credit reduces your cost basis in the setup. The max loss of the setup is what you paid (58.64), which would occur if price finished below the long call strike, and you were a doofus and did absolutely nothing to defend (i.e., rolling down and/or out for credit). As with the max profit metric, this metric can decrease in time, since every roll of the short call for a credit decreases your cost basis and therefore your max loss. A few tips: 1. Roll the short call out for a credit when it has lost more than 50% of its value. I generally roll out in time to the same delta'd strike, in this case, the 30 delta. 2. Be mindful of where your cost basis is at and, if possible, don't narrow the spread any more than your cost basis. For example, here the spread is 64 wide, but my cost basis in it less than that of a 59 wide, so I could conceivably narrow the spread on a roll of the short call down to a strike such that the spread is 59 wide and still make a profit if there was a finish above the short call strike at expiry. If I roll the short call down such that the spread is a 58 wide, and I haven't reduced my cost basis below 58.00, it's possible that I've just locked myself into a losing trade (although I can certainly roll an in-the-money short call for a credit in an attempt to fix that, although that's not ideal). 3. Generally, do nothing with the long call. On occasion, I will roll the long call up, but only intraexpiry (not out) if it has both substantially increased in value and its delta has increased. For example, if the delta has increased from 90 to 100, I will consider rolling the long call up to the 90 within the same expiry to lock in profit and to reduce the width (and therefore risk) of the spread. 4. Two things basically end this trade. The first is a break of my short call. When this occurs, I generally do not roll further since the setup is generally in a state where something at or near max profit can be realized. Toward expiry of the short call, I generally take the entire setup off in profit and then reset anew. Naturally, you can opt to continue to roll the in-the- money short call, assuming you can get a decent credit to do that. The other situation involves assignment, which can occur randomly if your short call is in-the-money and/or around ex-divvy, when there is an increased risk of that occurring. When that happens, I immediately close out the short shares I've been assigned, sell the long call, and then reset.
AMEX:SPYLong
by NaughtyPines
4