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The Options on Other Stocks Thread

ZeApelido

Active Member
Jun 1, 2016
3,308
30,012
The Peninsula, CA
I have no high conviction interest in any other stocks other than Tesla, but I do have high conviction in taking advantage of anomalous situations that happen sporadically. This thread will be about that exploration for me, and anyone else who wants to discuss their options / trading plays on other stocks because they perceive and want to take advantage of some systemic bias.

What do I mean about anomalous? I mean when dealing huge change in price, or big swings in volatility. The market is made up of many movements that on average may form close to a Gaussian distribution in most cases - and trading on those movements may generally lead to no advantage. But on big swings (essentially the "fat tail" of a change in price distribution, there is room for profit).

Even 10 years ago I made a basic machine learning algorithm searching for (price movement) circumstances when some profit could be made on stocks (totally ignoring fundamentals). What it found was basically only when huge changes in price in one day occurred (> 20%), short the stock by close and more often than not the stock would drop the next day.

This year I've mostly explored taking advantage of when volatility is insanely high in a stock. This is anomalous to me because it is doubtful over a year the volatility will stay that high.

Case in point was AMC a few months ago. Insane IV. Price was "high" and basic fundamental analysis told me it was unlikely to go and stay 2x or 3x higher long term. So I sold a bear vertical spread. That way, even if price remained flat, the eventual vega decay (say nothing about theta decay) would lead to profitability. Right that that trade is at 30% of total possible profit.

A one I tried this week was GNOG. A merger was announced at a specific market cap value and now the price has shot and stayed there. But volatility was still high, so I sold a 17.5 put and a bear vertical spread 20/25 for Feb 22. Just a handful on contracts for experimentation. The risk is that the deal falls apart I suppose.
 

Xepa777

Member
Aug 1, 2017
232
1,218
California
Onchain analytics for bitcoin is insane…and thus for MSTR.



And this subreddit - r/BitcoinMarkets

I also sold puts against TAL after the crash for like 35 cents on $3 strike for a month out, after the stock already collapsed. It was delicious. I’m actually okay with it as TAL isn’t going to go bankrupt anytime soon, ccp just asserting occasional control. TAL is almost systemically important in China lol.
 

UltradoomY

Supporting Member
Supporting Member
Mar 13, 2020
342
1,639
Tampa, FL
Initiating a position in RBLX sometime soon for my kids. They are too young to use the platform now but if I can get them some equity in the company now by the time they do start to use it, it will pay for itself!

And what better way to initiate a position than to sell aggressive Puts!
IV is right at 100 right now - so premiums are great.
Sold Cash Secured Puts for 08/20 - $83 strike for $5 each!
 

deerfield

Member
Jun 23, 2016
46
139
MA
I have been exploring QQQ options in an account. There are 2 day contracts available. My mentality there is be aggressive and wheel. Have been able to get about $3 per week (2 2 day options). I feel it's pretty safe to wheel since it's an etf and you won't get that huge "runaway" pop that you might miss out on. On the other side, if it crashes, well...the whole market is the same.
 
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Buckminster

Active Member
Aug 29, 2018
3,559
19,036
UK
Posted by someone else:
I like the idea about selling SPY options. Would learn a lot about the market as a whole which might be useful with selling TSLA options.
 

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