R
ReddyLeaf
Guest
Yes, I think you understand. I’ve only done this twice before, and with moderate success, so don’t take this as a highly profitable method, but rather for risk reduction. I’ve been run over so many times selling CCs, that I’m looking for ways to reduce my losses. My trades have been migrating closer and closer to ATM for the higher premiums so guessing wrong, especially on timing, is starting to have greater negative consequences. Furthermore, because I only trade options in IRAs, and with a crappy platform, this is a new method of day trading the SP swing. I’m still in share acquisition-mode, and have many years before removing money from the IRAs, but would still like to moderate risk. Given that the daily SP swings are typically between $30-$50, this might be a lower risk option for day trading, but again with the proviso of getting the timing right.Can you walk through that in more detail? I like the sound of this - looking for more details from what you've been doing.
The net position for this week is you've purchased 850 calls and sold 865 calls. That position can earn as much as $15 and is typically entered as a debit spread.
By opening those two positions at different times you've entered that position for a net credit. End result is you'll earn the net of the debit + credit, with an upside of $15 - am I reading that right?
Did you buy the 850s first, and then sell the 865s later? Or sell the 865s first, and then buy the 850s later?
Is this something you've been able to do before? Thx!