Geeze, yeah debit call spreads.I am confused, do you mean debit spreads?
Thanks for the catch!
(Even typed it wrong in this reply, must be the alliteration)
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Geeze, yeah debit call spreads.I am confused, do you mean debit spreads?
Let us know what you end up doing. I am curious as well about the best way to play the S&P inclusion.
@FrankSG do you have any opinion on this matter now that the stock is at a way different level from a few weeks ago?
If you want to take on more risk with near term options, a case can certainly be made that the $1,500s or $1,800s expiring in September offer a lot of leverage. I personally have never done any large short term trades (0.1-0.5% of portfolio usually), but have not had much success with them, and living in Asia I sleep during most of market trading, so it also makes it more difficult. Therefore, I'm not sure I'll ever make any short term trades again, but although risky, these options could pay off if S&P inclusion happens after Q2 ER, and if the squeeze is big enough.
Regarding long term options expiring Jun'22, unless you think the SP will very likely be >$3,000 by then, I'd stick to safer ATM or ITM strike prices. The Jun'22 $2,000s are trading @ ~$24k right now (~20 shares), and would perhaps be worth double that, or slightly less, if SP goes to $3,000. The Jun'22 $1,000s are trading @ ~49k right now (~40 shares), and would probably be worth 1.75x or 70 shares if SP goes to $3,000. Considering the $1,000s come with far less risk, I think those are looking much better than the $2,000s right now, unless you have high conviction that SP will end up at much more than $3,000 in the next 2 years.
Faster initially, but there are many factors involved (risk, relative growth, high end value). For instance, you can buy more OTMs for the same price as ITMs. Were the stock to go super high, each option turns into 100 shares (Delta of 1). So more is better. If you roll pre expiry, then some initial OTMs can still be better.Apparently it's all about the delta, right?
So ITM LEAPS will grow faster than OTM's, is this the case? Been selling too early then
Maybe OT, but have you tried the same strategy with other stocks. I have some tech stocks for which I am tempted to try selling puts.
I am so in-tuned with TSLA news and near/long-term milestones that I can make informed decisions, but not with other stocks. I might still try selling OTM puts and see how it turns out.
I started my funnel strategy for the next 2 weeks a little early with the big price move and subsequent IV rise. I sold 1050 puts for July 17 and 2000 and 2250 calls for July 24. Those last 2 I sold for $12 and $8 each, respectively. Seems like a win-win as I either pocket the premiums or if the SP goes to those crazy numbers, my underlying shares + LEAPS are up a crapton.
Good lord - I didn't realize call premiums for that far OTM were that high.
Maybe I need to reevaluate selling some covered calls...
It is weird to think that the July and August puts I sold Wed or Thurs last week are ready to be reevaluated after today for a new position.
I'm thinking some new 7/24's at higher strikes than I'll be closing - and maybe a really high strike that's begging for exercise ahead of earnings.
Or maybe I'll just buy a few calls for the earnings. I'm historically bad at option buying, but I did buy an Aug 1400 last week that doubled in value today; so maybe I'm learning a little bit and moving up slightly from bad (still a long ways in the hole, looking only at option purchases).
I started my funnel strategy for the next 2 weeks a little early with the big price move and subsequent IV rise. I sold 1050 puts for July 17 and 2000 and 2250 calls for July 24. Those last 2 I sold for $12 and $8 each, respectively. Seems like a win-win as I either pocket the premiums or if the SP goes to those crazy numbers, my underlying shares + LEAPS are up a crapton.
Wish I read this before pulling the trigger. Sold a 07/24 Put@995 for $84. Now it went up to $95.
Oh well, stock will definitely be above that after P&D report, so I have time to close.
Buying back a call under the current circumstances might indeed not be the best solution; call premiums are very high, even for short term options. Rolling to a higher strike further out sounds a lot better.
I can see IV skyrocketing in option positions I have. I bought a call last week (Aug 1400). Share are ahead $4 and the call is up $14.
The puts I've sold are up (bad) so far, despite the share price going up.
"Call premiums are very high (@ 100% IV)" @Right_Said_Fred
cc: @Lycanthrope @adiggs
To the carpenter, everything looks like a nail. Yet everything is not a nail.
Yesterday we had a 13.48% move in the underlying.
That's a single day realized vol of 13.48*16= 216%
If you don't hedge everyday (most people don't), over the past week and a day we had a 42.9% move in the underlying.
That's a single week realized vol of 42.9*7.2= 309%
Now is NOT the time to write premium past earnings.