corduroy
Active Member
These slow bleed days are not so great for opening new weekly BPS. It would have been much better for premiums if we would have dropped straight to $1030 in 5 minutes. Even so, I opened some 12/17 750/850s @ $2.25
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I thought the official China production numbers for November (not sales/export numbers) were to be expected next week.Anything particular in mind?
Closed the BCS at 65%. Time to make some popcorn for after hours.Have closed 1150/1200 BCS for this week at 80% profit.
Orders in to close my 1250/1300 BCS 12/17 at 80% haven't yet filled, but likely will if this price action holds. I may decide to close them for slightly less of a gain on the odd chance this evening actually is a catalyst. The next 90 minutes will dictate that decision.
Still holding 920 and 900 BPS for next week, and I also added some 830 BPS for next week (behind the lower bound of a gap that goes back to October 15 at this point). All $50 spreads.
There's nothing inherently wrong with them.Isn't selling LEAP PUT just that?
Jan 2023 $1000 PUT is ~250 thats 250/(1000-250) = 33%
Jan 2023 $1100 PUT is just over $300 thats 300/(1100-300) = 37%
Jan 2023 $900 PUT it is around 27%
My thinking is that yearly premiums are lower because risk of ending in the money over time do not increase linearly, e.g. risk over period of 1 year is not 12x larger than for monthly option, but only ~3.5x larger*
So... technically speaking if one would take equivalent level of risk for yearly PUT, by either levering up 3x or widening the strike the return rate would be close to 100%.
I am leaning to go -PUT LEAP, but still not 100% convinced. So I vent here with hope someone will point out error in my logic, or even better.... to hear that everyone here consistently clocks over 100% p.a. and thus LEAP PUTs option is not attractive .
*) that is a bit of the lie for the sake of more convenient math.
In fact it is expected share price range over 1year that is 3.5 times larger than expected monthtly price range.
Here is more info on expiration date vs probability in the money:
You should be able to make considerably more with the same amount of capital doing weekly contracts and have the ability to sit out if you want or do something else with the money instead of having it tied up.
This drop was too enticing to pass up
Sold some 12/17 950P
There’s always the risk of a downward Macro move that doesn’t move back up enough for a while.Isn't selling LEAP PUT just that?
Jan 2023 $1000 PUT is ~250 thats 250/(1000-250) = 33%
Jan 2023 $1100 PUT is just over $300 thats 300/(1100-300) = 37%
Jan 2023 $900 PUT it is around 27%
My thinking is that yearly premiums are lower because risk of ending in the money over time does not increase linearly, e.g. risk over period of 1 year is not 12x larger than for monthly option, but only ~3.5x larger*
So... technically speaking if one would take equivalent level of risk for yearly PUT, by either levering up 3x or widening the strike the return rate would be close to 100%.
I am leaning to go -PUT LEAP, but still not 100% convinced. So I vent here with hope someone will point out error in my logic, or even better.... to hear that everyone here consistently clocks over 100% p.a. and thus LEAP PUTs option is not attractive .
*) that is a bit of the lie for the sake of more convenient math.
In fact it is expected share price range over 1year that is 3.5 times larger than expected monthtly price range.
Here is more info on expiration date vs probability in the money: