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Weekly Options on Stocks


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Weekly Options on Stocks

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  #31 (permalink)
 TraderRich 
San Francisco CA
 
Experience: None
Platform: Thinkorswin
Trading: stocks, option, gold, ETF, Emini Es, Forex
 
Posts: 26 since Jan 2016
Thanks: 32 given, 13 received


wldman View Post
I'm going to be hunting some, probably a bunch, of puts tomorrow. It's sell/roll day and its the first day of a new month. The threads where I'd normally post about that are behind the premium wall. I'd say that bucking up on the platform to upgrade your participation here would almost certainly be worth the investment. @Big Mike and his admins do a spectacular job and there is a shit ton of content that you can learn from.

So, if you are going to be around I'd post near real time how I'm thinking about new put sales...but I dont need practice typing or more distractions. Let me know I'll be staring at my screen all morning.

Dan

Thanks! I would love to join your thread and read about your post. Can you send me the link to your thread? I will also upgrade my account.

Thanks again!

Rich

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  #32 (permalink)
 wldman 
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
wldman's Avatar
 
Posts: 3,343 since Aug 2011
Thanks: 1,978 given, 8,890 received

Engineers make a nice living. Learn from my mistakes: Keep your monthly nut small. Avoid consumer debt even if it means going without. Max your 401k contribution. Look at every use of cash as a competitor for trading dollars. Win or lose do not become emotional about money or trading.

As an engineer I bet you are comfortable with the quasi-stats model provided by option delta. Likelihood of expiring in the money can be used to build a model that you are comfortable with. Additionally on ToS you can find chance expiration in/out as well as chance to touch...build those into your typical review.

This will sound terse, but it is not meant to offend you. I want it to inspire you. It seems as though you have the tools and the "sense" for effective application of those tools. You have everything you need to make a go at it except the money. Get the damn money. So, you have to start small...big deal. Treat every trade the same and set out to make good trades. The money will take care of itself, especially if you take care of the money.

So. If you want to swing trade but cant carry positions that will satisfy your goals right now, consider trading synthetic long stock via an options "combo". Theoretically you will have the same p/l characteristics as long stock. Often you can position long call/short put dollar neutral or even a small credit. I know that there is a rule about "pattern day trading" that is in effect below some number of dollars...maybe $25,000. I'm not sure if/how that applies to retail options trading. I'm sorry if that negates the "idea", but at least you could get three trades in a month if I recall what that rule says. Also I'm sorry if I am a dumbass on margin requirements if that comes into play. It has been a long time since i had to be concerned with margin.



In theory if stock is 55 at expiration, your long call is worth 6 bucks, your short put is worth Zero. Yes there are other factors that will move options price, interest rates and volatility and of course time..but you get the idea?

I do not know what the margin requirement is or what "level" options account you have or need but I bet the margin on a 10 lot is less than $49,000.

I am sorry if I am ignoring some barrier. Often I "de-risk" a profitable position by buying calls and selling stock delta neutral. That gives me a similar p/l characteristic and requires far less capital allocation.

On the analyze <risk profile> tab you can create the synthetic position and look at how it changes relative to vola, time and price of underlier.

Sorry if I'm blabbing about nothing you want to hear.

Have a nice weekend.

Dan

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  #33 (permalink)
 wldman 
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
wldman's Avatar
 
Posts: 3,343 since Aug 2011
Thanks: 1,978 given, 8,890 received


I do not "journal" on the platform very often any more. Don't upgrade just to read me...there are a number of threads that I would say from time to time have high value content. Also there are a number of legit guys that do real trades that would give you their input. I do recommend the upgrade but dont do that simply to exchange with me. I'll help you the best I can because you donated to the FIO fundraiser. It is not my business but I believe that if you make a polite request of our host @Big Mike he would consider extending your charitable donation towards the one time membership charge. Either way, well worth it in my opinion. Dan



TraderRich View Post
Thanks! I would love to join your thread and read about your post. Can you send me the link to your thread? I will also upgrade my account.

Thanks again!

Rich


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  #34 (permalink)
 wldman 
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
wldman's Avatar
 
Posts: 3,343 since Aug 2011
Thanks: 1,978 given, 8,890 received

@TraderRich confused with @LittleFinger with respect to participation in the Holiday charity event.

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  #35 (permalink)
 TraderRich 
San Francisco CA
 
Experience: None
Platform: Thinkorswin
Trading: stocks, option, gold, ETF, Emini Es, Forex
 
Posts: 26 since Jan 2016
Thanks: 32 given, 13 received


wldman View Post
Engineers make a nice living. Learn from my mistakes: Keep your monthly nut small. Avoid consumer debt even if it means going without. Max your 401k contribution. Look at every use of cash as a competitor for trading dollars. Win or lose do not become emotional about money or trading.

As an engineer I bet you are comfortable with the quasi-stats model provided by option delta. Likelihood of expiring in the money can be used to build a model that you are comfortable with. Additionally on ToS you can find chance expiration in/out as well as chance to touch...build those into your typical review.

This will sound terse, but it is not meant to offend you. I want it to inspire you. It seems as though you have the tools and the "sense" for effective application of those tools. You have everything you need to make a go at it except the money. Get the damn money. So, you have to start small...big deal. Treat every trade the same and set out to make good trades. The money will take care of itself, especially if you take care of the money.

So. If you want to swing trade but cant carry positions that will satisfy your goals right now, consider trading synthetic long stock via an options "combo". Theoretically you will have the same p/l characteristics as long stock. Often you can position long call/short put dollar neutral or even a small credit. I know that there is a rule about "pattern day trading" that is in effect below some number of dollars...maybe $25,000. I'm not sure if/how that applies to retail options trading. I'm sorry if that negates the "idea", but at least you could get three trades in a month if I recall what that rule says. Also I'm sorry if I am a dumbass on margin requirements if that comes into play. It has been a long time since i had to be concerned with margin.



In theory if stock is 55 at expiration, your long call is worth 6 bucks, your short put is worth Zero. Yes there are other factors that will move options price, interest rates and volatility and of course time..but you get the idea?

I do not know what the margin requirement is or what "level" options account you have or need but I bet the margin on a 10 lot is less than $49,000.

I am sorry if I am ignoring some barrier. Often I "de-risk" a profitable position by buying calls and selling stock delta neutral. That gives me a similar p/l characteristic and requires far less capital allocation.

On the analyze <risk profile> tab you can create the synthetic position and look at how it changes relative to vola, time and price of underlier.

Sorry if I'm blabbing about nothing you want to hear.

Have a nice weekend.

Dan

Hi Dan,

Thank you again for the information! Your point on money, especially the emotion part, has been a goal I am trying to reach. It is indeed difficult.
Regarding to TOS option chart, I understand those risk profile/probability analysis and know what they are in TOS but I failed to used them to my advantage. Please correct me if I have the wrong thoughts. Many time, I looked at the risk profile, OTM probability to understand my win probability but often enough, despite the high chance of being OTM when I sell puts/calls, it still went against my trade. It seems like these probability are good as long as the trend is in tact. This is where I try to combine the option probability with PA but the OTM probability doesn't seem to provide much advantage if I can read the PA with high probability and this is where I am trying to improve on. From your experience, the risk profiles/option analysis seems to be just as important as PA. I am wondering if you can point me direction on how to use the risk profile/probability Analysis with PA? Or tell me some key concepts I am missing?

Thank you!

Rich

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  #36 (permalink)
 TraderRich 
San Francisco CA
 
Experience: None
Platform: Thinkorswin
Trading: stocks, option, gold, ETF, Emini Es, Forex
 
Posts: 26 since Jan 2016
Thanks: 32 given, 13 received


wldman View Post
I do not "journal" on the platform very often any more. Don't upgrade just to read me...there are a number of threads that I would say from time to time have high value content. Also there are a number of legit guys that do real trades that would give you their input. I do recommend the upgrade but dont do that simply to exchange with me. I'll help you the best I can because you donated to the FIO fundraiser. It is not my business but I believe that if you make a polite request of our host @Big Mike he would consider extending your charitable donation towards the one time membership charge. Either way, well worth it in my opinion. Dan

Thanks for the advice! I did upgrade to Elite and it has a lot of information that it made me feel overwhelm. I don't know where to begin. I will keep searching and browsing.

Thx!

Started this thread Reply With Quote
 
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  #37 (permalink)
 Blash 
Chicago, IL
 
Experience: None
Platform: NT8,NT7,TWS
Broker: InteractiveBrokers, S5T, IQFeed
Trading: The one I'm creating in the present....Index Futures mini/micro, ZF
 
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Posts: 2,290 since Nov 2011
Thanks: 7,269 given, 4,455 received


Jaap8242 View Post
Why would you trade weekly options?
In this video, Tom Sosnoff of Tastytrade gives his opinion on Weekly versus Monthly options.
https://www.tastytrade.com/tt/shows/market-measures/episodes/weekly-vs-monthly-08-19-2013

Thank you for this video. Great stuff.....

Ron

...My calamity is My providence, outwardly it is fire and vengeance, but inwardly it is light and mercy...
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
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  #38 (permalink)
 jck411 
orlando florida/usa
 
Experience: Beginner
Platform: TOS
Trading: ES, CL
 
Posts: 3 since Dec 2018
Thanks: 0 given, 1 received

I sell weeklies but I do Jade lizards (I sell an OTM put as well as an OTM call spread) this lowers my cost basis if assigned, I do lose out on some money if it blows through my credit spread but I always ensure that I am still green from the put (the put must give me more money than losing the call spread). Basically sell a call ATM if assigned (the wheel)

For technicals I use RSI and support zones, not too analytical, I do this on blue chips and ETFs only.

Right now I got assigned SPY at 300 and sold a call at 300.. but may be sitting on 30k for months, just to make $200. Its nothing exciting but it's safe

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