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trading
- Thread starter Boomer19
- Start date
Just scored big with this ALB trade ahead of earnings. Made up for the market sell off and then some.
Sold ALB this morning for a 7% gain. I'm attempting an S&P short right now (bought SH).
Antares Nebula
Active Member
Complete speculation, but I bought a 237.50 call for 90 cents after it filled the gap. Selling puts was probably the better move, but I generally don't sell calls and puts, except rarely. Just keeping it small, as I don't want to lose all the money I made in the last two weeks.
Will likely buy lotto puts at the end of the day. (We all know about the bad news Fridays with Tesla!)
Will likely buy lotto puts at the end of the day. (We all know about the bad news Fridays with Tesla!)
bdy0627
Active Member
I bought a few weekly SPY puts on this bounce. I remain skeptical that the dip is over with a bottom in ATH trading.
Antares Nebula
Active Member
Market is totally unpredictable. Some, however, are calling a double bottom after yesterday. So bullish short term (buy the dips). But I'm not playing. At most, I'll buy an option here or there.
I'm more looking for long term plays. Adding to TSLA at ~200 if gets there. Buying XBI (biotech index) at 75 if gets there. Maybe QCOM for a play on 5G over the next couple of years. And maybe crypto as a long term spec play if it makes a signific dip.
I'm more looking for long term plays. Adding to TSLA at ~200 if gets there. Buying XBI (biotech index) at 75 if gets there. Maybe QCOM for a play on 5G over the next couple of years. And maybe crypto as a long term spec play if it makes a signific dip.
Antares Nebula
Active Member
Sold for 2.10.
But there is a cup and handle pattern on today's chart, which targets 239/240. Nonetheless, these things aren't certain. Had a double, so I took profits.
anthonyj
Stonks
Didn't even realize the call I bought was for this week, lol. Just sold for double. I don't like to buy calls though
So this is why I see so few trades on the investor's forum. Never even knew about this thread.
What's the expiration for these $225 puts? It's only $1 a week out, so I'd need to back $100 in maximum gains with $23k cash?
What's the expiration for these $225 puts? It's only $1 a week out, so I'd need to back $100 in maximum gains with $23k cash?
Same. Count me in! I have some 240 covered calls expiring tomorrow that I’m sweating right now.
Antares Nebula
Active Member
Antares Nebula
Active Member
Well, we're all a bunch of amateurs here (at least I am). But welcome!Same. Count me in! I have some 240 covered calls expiring tomorrow that I’m sweating right now.
PS. I never (or rarely) sell calls or puts for that reason. But others do. All depends what you're comfortable with and how much risk you can take.
I like LEAPs, but have just about given up on short term calls, especially before earnings.
Tried with with BIDU - disaster and lost it all
Tried it with BABA - blew away the numbers, then tariff-meister announces the same evening that the trade war is on and I lost half.
Tried with TSLA - which had a decent earnings report, but a few days while waiting for shorts to finish, tariff-meister escalates the trade war again
With this kind of unpredictability, I need time to work for me instead of against.
Okay but can you still come out ahead after paying more for the time premium? I’m not so sure I generally can
Antares Nebula
Active Member
I have a core holding and a trading stack (like most folks here). On the trading stack:
I was doing really well before TSLA broke support at 240 in May. I made good money buying calls six months out every time TSLA hit 260-280 and then sold on the bounce around 340. Made about 3 to 4x on two round trips. Was trying for a third round trip, when the price collapsed in May. Lost all that I made, and most likely negative.
Had to essentially regroup. On the recent earnings call, I did well. I bought 250 puts on the day of earnings right before close for $3.50 and sold 275 calls for $5 (I rarely sell calls or puts, but this was an exception). Sold the puts the next day for $20 and collected the entire premium on the calls. I don't get greedy and try for more (though I could have sold the put for $28 had I waited a day or two).
It all depends what you're comfortable with. I like six month to one year or more calls OR one/two week calls. Anything in between I don't do well. I used to buy calls two to three months out, but even though the trade eventually went my way, the time decay screwed me. The one/two week calls are good right before earnings or major events/announcements. I like playing these because there is hardly any time premium, so you're just playing the expected move. And I get in and out quick. If you get greedy and hold out for more, you could get screwed. 2x to 4x is good enough for me.
Finally, I'll play one/two day calls by buying weekly puts/calls on wed/thurs for a few cents, even up to a $1 occasionally. The idea is that good/bad news tends to drop on Thursday night or Friday. It's basically a lotto pick. But I hit the jackpot about 3 or 4 times now. Turned $100 into 5, 10, even 20K. It's been net profitable for me big time. But I'm uncertain if this pattern of news coming out Thurs/Fri will continue. We'll see.
Anyway, there's no one approach. You have to find what's right for you and your level of risk tolerance.
I was doing really well before TSLA broke support at 240 in May. I made good money buying calls six months out every time TSLA hit 260-280 and then sold on the bounce around 340. Made about 3 to 4x on two round trips. Was trying for a third round trip, when the price collapsed in May. Lost all that I made, and most likely negative.
Had to essentially regroup. On the recent earnings call, I did well. I bought 250 puts on the day of earnings right before close for $3.50 and sold 275 calls for $5 (I rarely sell calls or puts, but this was an exception). Sold the puts the next day for $20 and collected the entire premium on the calls. I don't get greedy and try for more (though I could have sold the put for $28 had I waited a day or two).
It all depends what you're comfortable with. I like six month to one year or more calls OR one/two week calls. Anything in between I don't do well. I used to buy calls two to three months out, but even though the trade eventually went my way, the time decay screwed me. The one/two week calls are good right before earnings or major events/announcements. I like playing these because there is hardly any time premium, so you're just playing the expected move. And I get in and out quick. If you get greedy and hold out for more, you could get screwed. 2x to 4x is good enough for me.
Finally, I'll play one/two day calls by buying weekly puts/calls on wed/thurs for a few cents, even up to a $1 occasionally. The idea is that good/bad news tends to drop on Thursday night or Friday. It's basically a lotto pick. But I hit the jackpot about 3 or 4 times now. Turned $100 into 5, 10, even 20K. It's been net profitable for me big time. But I'm uncertain if this pattern of news coming out Thurs/Fri will continue. We'll see.
Anyway, there's no one approach. You have to find what's right for you and your level of risk tolerance.
Okay but can you still come out ahead after paying more for the time premium? I’m not so sure I generally can
I've been very happy with leaps, but if intrinsic value isn't solid with a year left to go, I'd rather take gains than take a chance closer to expiration.
That's why I'm considering selling puts or selling covered calls backed by new TSLA shares. Having the long term TSLA may turn out wonderful, but making something in the short term (months) would be nice with writes and the time value works in my favor.
How much are you paying in commissions for the lottos? Ameritrade charges .75 a contract plus transaction. That surcharge doubles the cost for penny options.
Oh, and you're selling naked calls? I'd have a heart attack if I did that.
Antares Nebula
Active Member
I have Ameritrade too. I WAS paying $8 commission plus a per contract fee like you. But I've been giving them so much business that they have now given me a flat rate of 1.50 per contract with no commission cost. This is actually nice because I can buy one or two contracts at a time, and average up or down without the commission fee. You can check with them and see. Don't call them. Go into your local office. I was actually there for some other business, and the agent took a look at my account and told me that he can give me a discount. It was a pleasant surprise. But it all depends on how much you trade. I imagine that others can even get better deals.
EDIT: I may have misunderstood what you were saying. Are you saying that you don't pay any commission and that you only pay 0.75 per contract? If so, that's a great deal. Better than my 1.50 deal.
But yes, even at ~$1 per contract, it doubles the cost of the option if you're buying for example a 0.01 option. Still I don't mind. Say you buy 10 contracts. That's $10 + $10 = $20. That's not bad. If it's 0.03, it's $30 + $10 = $40. I don't go ballistic and buy 100 contracts or anything. Usually around 10-20 max. If you're buying a 100 or 1000 contracts, I can see how it could be a problem.
On 10-20 contracts, if the stock is in the money the next day, you can make anywhere from 5-20K. That's not bad for risking $20 - $50. But, of course, 9 out of 10 times (or more) it's going to be a waste.
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