*Official* Options trading thread: Why Alpha/Beta when you can Theta?

[SolidPaul]

ah so this the better thread now.

that other one is filled with new garbage posters.

Option flow for apple was really strong yesterday. those insane earnings are not going to be ignored imo.

Volume on 2/05 calls is heavy.

Any date in February actually.

If the meme shiit dies down and market isn't looking like it will tank any moment next week.


I am looking at $150 2/26 expiry Monday.

I was looking at option flow and saw heavy volume on SPY puts 1 and 0 DTE yesterday. When you see stuff like this it's 100% obvious what direction the market will move. As far as AAPL and AMD (probably everything else) crashing it's due to liquidity. Possible that we get a face ripping rally then a real dump. Those new posters have no idea, the big bois aren't going to lose that easily.

https://m.imgur.com/a/oZkVNlw

Really curious how TSLA will behave. I’m not going to get into CC’s again until things are a little less chaotic. While I was EXTREMELY profitable with my last play, it was stressful AF at times trying to figure out how to make things work. It was like the saying “picking up pennies in front of a steamroller” lol. Full transparency I have
$850csp 2/5, $900cc 2/5
$850csp 3/19, $900cc 3/19

I exited half my long positions, that I was already whittling down over the past few months. The hardest to let go was LULU, but I was up 80%, and while I am still very confident in it’s trajectory over the next year, I also see it’s’ vulnerability in this current climate. That said, I have $330csp’s for 2/19 and 3/19. Also ditched AMZN because it behaves like a little bish. It’s been trading sideways for the past 6 months at least. Once it decides to move, it will do so without looking back, but I just don’t know what the catalyst could be. I might do another $3,000CSP for a weekly expiry... We’ll see how next week starts

I saw volume for the quick TSLA dump yesterday. Was 300% return but my risk tolerance these days is a lot lower than it used to be. TSLA is extremely volatile but great for selling options. I think tech stocks will be the first to dump in the event of a crash. Like I mentioned with Carbon it seems they'll need more liquidity and most if that would be in big Tech stocks.

I feel like Monday might not be a dump but we'll see. Typically big crashes had bounces. Inb4 stimulus news.

[chino3]

Good info. Here’s what I’m looking at for Monday (premature ofc but just what I feel comfortable with with these figures)

AAPL
2/26
$150c BTO/$152.50c STO (undecided quantity)

SPY
3/19
$305p BTO/$301p STO (undecided quantity)

[SolidPaul]

Good info. Here’s what I’m looking at for Monday (premature ofc but just what I feel comfortable with with these figures)

AAPL
2/26
$150c BTO/$152.50c STO (undecided quantity)

SPY
3/19
$305p BTO/$301p STO (undecided quantity)

Those are spreads to lower your exposure?

Also wanted to mention that the GME and meme stocks aren't purely driven by retail. I think other institutions have been quietly joining and amplifying the retail pump. Check institutional ownership of GME. If anything those institutions will dump first and fuk everyone else over. Who would've known that GME ended up being the black swan...

[chino3]

Those are spreads to lower your exposure?

Also wanted to mention that the GME and meme stocks aren't purely driven by retail. I think other institutions have been quietly joining and amplifying the retail pump. Check institutional ownership of GME. If anything those institutions will dump first and fuk everyone else over. Who would've known that GME ended up being the black swan...

Correct. Basically can reduce how much I have to put in pretty significantly.

And 100% agree. There is no way in hell the big boys are sitting back letting the “rebellion” have all the fun, nor could retail produce this volume (imo). They see opportunities, they will take them, even if just for a couple percentage points. Plus, the retail money is finite compared to what tutes have. And that’s going to be the thing. Tutes/whales will get this to where they want, then get out as quickly as possible. And if you don’t think they’re loading up on puts along the way, I got some bad news lol. I wouldn’t even be surprised if that’s what Melvin is doing themselves... Imagine what they could do with that $2.75b they got. I’d bet money they didn’t use those funds to cover, at least not fully...

[Carbonfibre]

Those are spreads to lower your exposure?

Also wanted to mention that the GME and meme stocks aren't purely driven by retail. I think other institutions have been quietly joining and amplifying the retail pump. Check institutional ownership of GME. If anything those institutions will dump first and fuk everyone else over. Who would've known that GME ended up being the black swan...

Correct here are the longs on GME. (last up to date is Dec 31st so probably changed)

These are all whales.


Of course the fall back will be on retail and reddit if shiit hits the fan soon. Media is already on their side. WSB is perfect escape.


I agree with your post above about SPY. Lets see how Monday plays out. Tech is by far the first to go. It was the most over bought by long shot.


Yeah absolutely surreal to think that of all the things something out of left field like GME might end up causing shiitshow.

Good info. Here’s what I’m looking at for Monday (premature ofc but just what I feel comfortable with with these figures)

AAPL
2/26
$150c BTO/$152.50c STO (undecided quantity)

SPY
3/19
$305p BTO/$301p STO (undecided quantity)

I like those dates.

My plan was 20 Apple calls. Same date strike.

About SPY (15-20 contracts) as long VIX is in this high level. It can always hit and its far enough that gives you enough cover to whatever happens next month.

[Travis99]

^^^ CarbonFibre

There is no reason AAPL should’ve dropped the way it did, and then the overall market drop was just insult to injury. I think that 2/26 call is solid. Might look into a call spread for that actually...

Also tempted to hedge with SPY puts. What’s your experience / recommendation? Weeklies? 6+ months?

Do you think the sell off is hedge funds trying to cover GME shorts?

[chino3]

Do you think the sell off is hedge funds trying to cover GME shorts?

I don’t think its helping, but I wouldn’t feel confident in saying that IS the cause. I think I used this analogy elsewhere, but (this is totally my interpretation) the market is like a giant school of fish. Generally they all go in the same direction as each other, but occasionally something will signal to one/few in the lead to make a movement in the other direction. Then without knowing why, the others will follow suit. Blindly following the movements of the leaders, and sometimes it takes a minute for the others to get in line.

What I’m getting at, is that if HF started trimming to cover, it didn’t start on Friday. It started on Wednesday, and the rest of the fish are changing course (selling) since Thursday, but mostly Friday. From here, I could see the fish not quite ready to go back to their original course, but they aren’t going in the opposite direction anymore. Now, if there is SOMETHING that spooks them again, we will see the same thing but it will take even longer to “right the course.”

All that said, any moves I make, I will be playing fairly conservatively with “protection” in place, so probably spreads of some sorts, or add legs to existing positions

[Travis99]

I don’t think its helping, but I wouldn’t feel confident in saying that IS the cause. I think I used this analogy elsewhere, but (this is totally my interpretation) the market is like a giant school of fish. Generally they all go in the same direction as each other, but occasionally something will signal to one/few in the lead to make a movement in the other direction. Then without knowing why, the others will follow suit. Blindly following the movements of the leaders, and sometimes it takes a minute for the others to get in line.

What I’m getting at, is that if HF started trimming to cover, it didn’t start on Friday. It started on Wednesday, and the rest of the fish are changing course (selling) since Thursday, but mostly Friday. From here, I could see the fish not quite ready to go back to their original course, but they aren’t going in the opposite direction anymore. Now, if there is SOMETHING that spooks them again, we will see the same thing but it will take even longer to “right the course.”

All that said, any moves I make, I will be playing fairly conservatively with “protection” in place, so probably spreads of some sorts, or add legs to existing positions

Makes sense; I get the fish analogy. In the little time I’ve been doing this I can see the movements. I’ve had a pretty rough week and I’m only holding one meme stock. Seems like all my positions are losing this week.

I’m also wondering if it would just make more sense to buy leaps rather than 100 shares of a stock. I mean I can always sell cc, but I’ve been unlucky with that as well. Like I’ve had just a ton of bad luck lately.

[chino3]

Makes sense; I get the fish analogy. In the little time I’ve been doing this I can see the movements. I’ve had a pretty rough week and I’m only holding one meme stock. Seems like all my positions are losing this week.

I’m also wondering if it would just make more sense to buy leaps rather than 100 shares of a stock. I mean I can always sell cc, but I’ve been unlucky with that as well. Like I’ve had just a ton of bad luck lately.

Patience is the hardest part of this whole thing. Be it waiting for a down stock to recover, or for an option to get back to green. Just a reminder, if you are selling options, theta decay is the biggest goal, which doesn’t occur until 1-2 weeks out from expiration. Then the daily decay is crazy.

As for selling calls, there are 2 times you should ever do it
1) when you have a target sell price in mind and are 100% fine with it getting called away
2) when a stock is below your purchase price (this is where you set. Your strike at your purchase price. This is what I did with RKT for 6 months lol)

Otherwise doing it for the sake of doing it will bite you in the ass more often than not.

As for LEAPs, tough to say tbh. I’ve only done Deeeeeep ITM leaps.Did it with RKT with 1/22/22 expiry and a $10 strike price... yup you read that right. It was trading at $20, and the premium was $10.25, so basically I got in for “half price” with a slight premium, but when the stock increases, the leap % would increase 2x. There is strategy to it, not just buying.

[RobParks2M]

ah so this the better thread now.

that other one is filled with new garbage posters.

I am looking at $150 2/26 expiry Monday.

yesssssssssss

I don’t think its helping, but I wouldn’t feel confident in saying that IS the cause. I think I used this analogy elsewhere, but (this is totally my interpretation) the market is like a giant school of fish. Generally they all go in the same direction as each other, but occasionally something will signal to one/few in the lead to make a movement in the other direction. Then without knowing why, the others will follow suit. Blindly following the movements of the leaders, and sometimes it takes a minute for the others to get in line.

What I’m getting at, is that if HF started trimming to cover, it didn’t start on Friday. It started on Wednesday, and the rest of the fish are changing course (selling) since Thursday, but mostly Friday. From here, I could see the fish not quite ready to go back to their original course, but they aren’t going in the opposite direction anymore. Now, if there is SOMETHING that spooks them again, we will see the same thing but it will take even longer to “right the course.”

All that said, any moves I make, I will be playing fairly conservatively with “protection” in place, so probably spreads of some sorts, or add legs to existing positions

Guys be careful expecting big moves up. Leverage is utilized everywhere and more heavily with institutional money. Volatility increases perceived risk. It can cause a lot of funds to deleverage their positions AND shift equity allocation too. IMO these moves down aren't hedges covering its the HUGE institutional investment firms that invest everyone's 401k shifting out of certain sectors

[Harry362]

Who is selling puts? I’m fully leveraged right now so all I have are 2x 2/19 35p on CRSR. Hoping CCiV blows up my acct and I’m gonna go full thetagang.

Stonks I’m looking at put selling on

AFRM
BFT
CRSR
OPEN
OZON
IPOF
APXT
RIOT
SLV
PLTR
RDFN
SNAP
TWTR
UWMC
DIS
NOK(fidelity not letting me sell CCs right now)


If CCiV blows my acct to 300k+ I’d prob just go full thetagang and sell tons of puts and yolo the premiums into call options or spac warrants. I do want to go long on some **** already long BFT(1500 shares) and Ipoe(1000 shares)

If assigned I wouldn’t find starting long positions on Dis Pltr Open SLV Afrm. Will go small on spec things like Ozon and be very careful with junk like Riot not go harder than 5 puts

Currently 165k hope to be 250 EOY

[chino3]

Mirin aggressive goals, but definitely doable. How are your positions looking as of Friday?

Current CSP lineups:
ARKF
ARKG
ARKQ
ARKW
CCIV
LULU (February and March)
RKT (February and March)
TSLA (February and March)

Only green ones as of Friday are RKT and CCIV smh...

I have a call spread on CCIV that hopefully will explode this week.

[Heaney]

So this is where all the cool kids got off to.

Plan for after CCIV is to drop the whole account into another spac around NAV and sell CCs on a portion of them.

[skinnyntall]

I'm still new to trading and want to learn more about options. Good thread.

Just in Layman's terms..

What do you guys generally look for when selling PUTS? Are you obligated to buy the shares if it falls below the strike price at expiry?
And do you have to do anything before it expires? Or just let it expire.


And for buying CALLS. Do you guys aim to just make money off the premium once it goes up? Do you "exercise" that or "sell".


I also closed my Margin account. But I have Option trading still on ( I sold CC on AMC last week) Does that matter?
If anyone can explain or link a video, will rep. Thanks a lot.

[Harry362]

So this is where all the cool kids got off to.

Plan for after CCIV is to drop the whole account into another spac around NAV and sell CCs on a portion of them.

That would be nice. Maybe Ftoc BTAQ AACQ Gsah. I’m definitely willing to load the **** up like 30,000 shares of the opportunity presents itself


Keep the updates on Spac options trading in here. Such little risk imo for some of them. I made like 5k off Ghiv put selling and that stonk went nowhere. Still gonna sell against its new ticker for a set of 1000 shares dont mind assignment it has a 40cent yearly div

[Heaney]

That would be nice. Maybe Ftoc BTAQ AACQ Gsah. I’m definitely willing to load the **** up like 30,000 shares of the opportunity presents itself


Keep the updates on Spac options trading in here. Such little risk imo for some of them. I made like 5k off Ghiv put selling and that stonk went nowhere. Still gonna sell against its new ticker for a set of 1000 shares dont mind assignment it has a 40cent yearly div

I'd likely go in full port on AACQ or AVAN if either is still in the 10s and with a position that large I wouldn't care if some got called away.

[chino3]

I'm still new to trading and want to learn more about options. Good thread.

Just in Layman's terms..

What do you guys generally look for when selling PUTS? Are you obligated to buy the shares if it falls below the strike price at expiry?
And do you have to do anything before it expires? Or just let it expire.


And for buying CALLS. Do you guys aim to just make money off the premium once it goes up? Do you "exercise" that or "sell".


I also closed my Margin account. But I have Option trading still on ( I sold CC on AMC last week) Does that matter?
If anyone can explain or link a video, will rep. Thanks a lot.

Yes, you are obligated to purchase shares if a CSP expires ITM. You either have to close them out for whatever price (debit or credit depending on standing), or you have to wait for the close of AH trading to take on assignment (won’t show in your account until the next day).

For calls, I’ve never exercised them, because there just wasn’t reason to, not to mention since most people buy more calls than they have enough funds to exercise. And yes, you would typically sell when the option gets closer to or surpasses the strike and the premium is now worth more.

Also, for your your margin account, you can still write options w/o margin, but you will need the capital for it. So, you can sell a call if you have the shares to back it up (99% sure they wont let you sell a naked call without margin). You can sell a put if you have the cash to purchase the stock if assigned (and those funds will be “held” until the position is closed).

Hope that helps.

[chino3]

I’ve never once considered joining motley fool, BUT I just came across an offer with AMEX, 1 year subscription for free ($99 purchase price, and then you get a $99 credit), so just signed up, because FREE

[mikebadg3]

I’ve never once considered joining motley fool, BUT I just came across an offer with AMEX, 1 year subscription for free ($99 purchase price, and then you get a $99 credit), so just signed up, because FREE

Do you like business insider

[Carbonfibre]

so SLV is getting squeezed opened at $29 watch it hit $30+ tmmrw.

and guess who will profit.

Citadel.

Look at who owns the biggest silver positions.



futures opened red so far....

which very likely could mean earnings this week from amazon / google / paypal etc etc will get same treatment as apple / amd...

if hedge funds are running out of liquidity and dumping other positions.

[chino3]

^^ My portfolio is 250% of what it was in November.. think I'm going to GTFO this week. Let go of AMD/CRSR, and just keep averaging down on BFT/CCIV if they dip.

I feel like those two stocks will HAVE to moon regardless of what's going on in the market.. just seems highly improbable that LUCID would announce and CCIV wouldn't moon, or that BFT gets ticker change and it doesn't moon.

Problem right now is platforms like robbincrook is they are restricting CCIV. I feel like any news will be delayed until this chit is figured out. But agreed it will blast off.

So I have tsla csps for this Friday. Almost guaranteed to get assigned. Strike is $850. I have CC already setup for the same day at $900. Gonna see if I can write more for each Friday in February at $900. Little risky but if I get assigned I’ll have 400 shares. I’ll just set up 2 at a time so if it gets away from me I can create a strangle for the furthest one out with a CSP.

Stay tuned lol

[mikebadg3]

how much game stonk should i buy?

[Heaney]

Problem right now is platforms like robbincrook is they are restricting CCIV. I feel like any news will be delayed until this chit is figured out. But agreed it will blast off.

So I have tsla csps for this Friday. Almost guaranteed to get assigned. Strike is $850. I have CC already setup for the same day at $900. Gonna see if I can write more for each Friday in February at $900. Little risky but if I get assigned I’ll have 400 shares. I’ll just set up 2 at a time so if it gets away from me I can create a strangle for the furthest one out with a CSP.

Stay tuned lol

CCIV isn't restricted anymore, they changed the list today and excluded all of the SPACs that had previously been restricted.

[Travis99]

Problem right now is platforms like robbincrook is they are restricting CCIV. I feel like any news will be delayed until this chit is figured out. But agreed it will blast off.

So I have tsla csps for this Friday. Almost guaranteed to get assigned. Strike is $850. I have CC already setup for the same day at $900. Gonna see if I can write more for each Friday in February at $900. Little risky but if I get assigned I’ll have 400 shares. I’ll just set up 2 at a time so if it gets away from me I can create a strangle for the furthest one out with a CSP.

Stay tuned lol

Massive call volume for TSLA at $970 according to barchart. Who knows what’s gonna happen I guess we’ll see.


Edit: chit maybe not as much as I thought. But at least some.

how much game stonk should i buy?

All of it

[chino3]

CCIV isn't restricted anymore, they changed the list today and excluded all of the SPACs that had previously been restricted.

’

Well chit, game on! Fingers crossed for an announcement. I have a 35/40 call spread, but if CCIV stays down, I was considering closing the CC portion, as it’s currently up 15%. ButWe should see theta decay begin to kick in this week, so if it trades sides or even just slightly increases, I might not be able to get in at a better value... hmmm.

[RobParks2M]

CCIV going to get FOMO piled into Monday by robinhood traders scared they'll be limited again. I might buy premarket to sell

[Heaney]

CCIV going to get FOMO piled into Monday by robinhood traders scared they'll be limited again. I might buy premarket to sell

Yeah I might sell at open since if there isn't an announcement then it won't likely happen until atleast Tuesday.

[Heaney]

’

Well chit, game on! Fingers crossed for an announcement. I have a 35/40 call spread, but if CCIV stays down, I was considering closing the CC portion, as it’s currently up 15%. ButWe should see theta decay begin to kick in this week, so if it trades sides or even just slightly increases, I might not be able to get in at a better value... hmmm.

If they announce I might start selling CCs after the initial run up, nothing crazy maybe 3 or 4 contracts to take advantage of the likely sky high IV. Even if they got called away I'd still have over 6K shares.

[Travis99]

Futures now green.

[Travis99]

Fuark. Every night I sleep excited to wake up premarket and see what's going on with the market and to trade all day. If only I was this excited about my day job :/ Caveat is, I probably wouldn't be this excited in a bear market..

Lmao, I work for the government and literally spend 95% of my day looking at the market. The sad part is, if I couldn’t look at it all day I would have made far more money because I wouldn’t have panic sold anything and just held my positions.

I also don’t think it helped that the very first trade I ever made was buying 100 shares of kodk for $19 the selling them for almost $40 a few hours later. That chit ruined me.