Get started

Premiumselling

Opening (IRA): SPY March 17th 280 Short Put... for a 2.81 credit. Comments: Part of a longer-dated premium selling strategy in broad market to keep theta on and burning while I wait for shorter duration to be more productive. Targeting the <16 delta strike paying around 1% of the strike price in credit. Will generally look to roll either intraexpiry or for duration at 50% max. I'm also looking to attempt to remain more maximally deployed, which can be difficult if you're going to do things primarily this way versus some mix of long stock positions (which tie up oodles of buying power) with premium selling positions as an add-on or as an acquisitional approach (i.e., short put, acquire, cover). One way to look at these longer-dated positions is that they're small stock positions (which people are generally more comfortable with holding for extended periods of time), even though they differ in one fundamental way, and that's they're dynamic (as opposed to being static delta, as stock would be). Additionally, the ROC as a function of buying power effect (annualized or otherwise) isn't exactly fabulous out of the box, which is why you'll want to roll these at 50% max to collect additional credit (without extending duration if you can) to bring in more of "the fabulous."
AMEX:SPYLong
by NaughtyPines
Rolling (Margin): XOP November 18th 127 Short Straddle... to the December 16th 128C/133P inverted short strangle for a 4.02 credit. Comments: Rolling out at 21 days to go to reduce "random" assignment risk on the short call. Total credits collected of 21.96. I've gone slightly inverted here as well as improved the short call strike a smidge to keep the short delta metrics similar to what they would be were I to be in a covered put with a 40 delta short leg. This results in delta/theta -60.27/15.68 with a call side break even off 149.96. A "perfect" finish would be in between the strikes, but I'm looking to basically scratch this out or make something small on it.
AMEX:XOPShort
by NaughtyPines
Opening (IRA): IWM December 23rd 156 Short Put... for a 1.67 credit. Comments: Targeting the <16 strike in the expiry nearest 45 days paying around 1% of the strike price in credit. This is more about not letting my IWM position get too short delta than about putting on an "ideal" premium selling trade. I still have an IWM short delta hedge on that is marking at around -60 delta (See Post Below) and had only one IWM short put rung on at the December 16th 164 (+23 delta at the moment), so the position was leaning more net delta short than I would like. This long delta additive trade will make my IWM position "net delta flatter."
AMEX:IWMLong
by NaughtyPines
Opened (Margin): AAPL Dec 16th 100/Nov 18th 136 LCD*... for a 23.23 debit. Comments: (Late Post). Did this fairly obvious bullish assumption play in AAPL on Friday weakness, buying the back expiry 90, and selling the front expiry at-the-money. 2.77 ($277) max profit; 11.9% ROC at max; 6.0% at 50% max. Cost basis of 23.23 with a 133.23 break even on a 26 wide. Max is realized on a finish above 136, with the profit zone being above the break even at 133.23. I don't have many cost basis reduction/rolling opportunities of the short call, so will money/take/run if given the opportunity. Currently, I'm shooting for 50% max/1.39 ($139) profit, so have entered a GTC order to take profit at 24.61. * -- Long call diagonal.
NASDAQ:AAPLLong
by NaughtyPines
2
TLT -- When I'm Going to Thinking About Going Long 20 Year+The short answer is: at pre-Great Recession levels when the yield on the 10-year T note was at 5.0% or above. Current forecasts for the terminal Fed funds rate are for 4.75-5.00 in February of 2023, which could push the 20 year+ paper exchange-traded fund back to near 2006-2007 levels between 80.50 and 82.05. (See, $TNX, June '06 high, 5.245, correspondent with a TLT 82.56 low; June '07 high, 5.316, correspondent with a TLT 82.20 low). If current bets as to the terminal rate are correct, we should fall short of the 2006 and 2007 levels, but could nevertheless be pretty darn close. And since current bets are that the Fed Funds rate doesn't come off 4.75-5.00 until much later in the year (the current forecast, is, ugh, November of 2023), this would conceivably require a good amount of time to work out. As we've seen, however, things can change. A few months ago, bets weren't being made on a terminal rate quite this high and that a potential cut would come far sooner in 2023. But, here we are. Inflation could either remain "sticky," or come down rapidly in response to what the Fed has done so far, in which case, we never see the low 80s in 20 year+ maturity paper. Naturally, if we do get there, I'll look to dip my toe in, whether it be with short puts (which would be a quasi-acquisitional play, most likely in my IRA) or something more directional, like a long call diagonal or a zebra/call ratio backspread ... .
NASDAQ:TLTLong
by NaughtyPines