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Started By
Message
1
Posted on 7/16/22 at 11:56 am to good_2_geaux
quote:
You think SPY gets into the 340’s?
Curious because I also want to attempt this w/ SPY as I am bullish 18 mths out
I am listening to some of the big dogs.
Mike Wilson at Morgan Stanley has been saying S&P 500 to 3400 for a while. Another 10% down. This earnings season and the revisions that come after will be telling.
This post was edited on 7/16/22 at 11:57 am
Posted on 7/16/22 at 12:30 pm to thelawnwranglers
quote:
Do you have to set this up (cash secure part).
“Set up”, meaning be approved by your brokerage? You do. But depending on the brokerage, it’s likely that your current approval level already allows cash secured put writing. And because cash secured put writing (by definition) doesn’t require margin, you can also do this strategy in retirement accounts.
Just throwing this out there (*I’m not recommending anything*), but if you combine this strategy with what would be covered call writing, you may generate more premium income. The downside risk is if you sell a cash secured put, get assigned long shares and the stock crashes through your strike to an unacceptable level. But that’s the same risk that you have with straight buy-writes. Only with this, you have the benefit of at least collecting the premium on the short put. This is generally referred to as the “wheel strategy”. Your aim is to “wheel” your way out, if and when you take on long shares. You can either sell covered calls until it’s eventually called away, or you can sell your shares at some level above your net break even and make money that way.
This is a pretty basic, single leg strategy that’s good for relative beginners. But stick with underlying equities that you’d be content to own and have higher than average implied volatility at the time you’re looking to sell premium (higher IV generally means more premium for roughly the same amount of risk).
As to the OP’s long call buying, I’m not sure what his strikes are based on. And like Frogtown, I generally only buy options as part of spread strategies. Unless I’m aware of unusual call or put volume/activity, I don’t play the net long option game. As I suspect Frogtown and a couple of others are here, I’m also a TastyTrade devotee. OptionAlpha also follows the same basic selling for premium philosophy.
This post was edited on 7/16/22 at 12:35 pm
Posted on 7/16/22 at 1:59 pm to Skippy1013
There are so many ways to profit with Options.
I personally focus on weekly option credit spreads and collect my premium up front. Also do some cash secured puts. Then again I'm not option trading with a large account.
I personally focus on weekly option credit spreads and collect my premium up front. Also do some cash secured puts. Then again I'm not option trading with a large account.
This post was edited on 7/16/22 at 2:01 pm
Posted on 7/16/22 at 2:56 pm to b-rab2
quote:
too far out of the money on alot of those.. theta is going to kill them IMO.
This. Hope he has stops on them.
Posted on 7/16/22 at 4:23 pm to rintintin
quote:
Question: do you typically have enough cash sitting around to buy if your written options are exercised
Yes
Posted on 7/16/22 at 4:29 pm to thelawnwranglers
quote:
Do you have to set this up (cash secure part). I gave limit orders to buy bc mostly cash but was thinking if I sold puts would be getting premium
Your brokerage will offer “levels” of option trading.
Most will allow “covered calls” as a level of option trading.
I think buying options is the same level.
Selling options requires an additional level.
I just use “cash secured puts” as a pseudo-limit order.
If it does not “get put” to me, I get the premium.
If it does “get put”, my basis is the strike minus the premium.
Posted on 7/17/22 at 11:52 pm to makersmark1
It’s amazing how you will always be on the wrong side of an option trade.
Posted on 7/18/22 at 5:28 am to Skippy1013
Why now?
Posted on 7/18/22 at 6:05 am to montana
quote:
It’s amazing how you will always be on the wrong side of an option trade.
I was put 100 of ORI Friday.
I wanted the stock, it fell below strike.
A limit order would have executed, but now my basis is lower from the premium.
I had some Apple 135 puts expire worthless.
Today I’ll look and see what I can find for a put to sell.
If you buy options, you are more likely to expire worthless.
Buffett sells puts to enter positions.
Posted on 7/18/22 at 10:19 am to Skippy1013
earnings week next week, good luck lol
Posted on 7/18/22 at 10:13 pm to makersmark1
quote:
Buffett sells puts to enter positions.
He sure does. And also uses short puts to generate income.
When people ask me why I do what I do, I refer them to this article.
Buffett collects &4.9 billion in put premiums
quote:
“Our put contracts total $37.1 billion (at current exchange rates) and are spread among four major indices: the S&P 500 in the U.S., the FTSE 100 in the U.K., the Euro Stoxx 50 in Europe, and the Nikkei 225 in Japan. Our first contract comes due on September 9, 2019, and our last on January 24, 2028. We have received premiums of $4.9 billion, money we have invested.
That dude is the OG baller!
Posted on 7/29/22 at 5:33 pm to Skippy1013
This dude printing or what. Hell of a buy on most of these
Posted on 7/29/22 at 10:15 pm to makersmark1
I follow the same strategy. been using qqq & xle as my primary options
Posted on 7/29/22 at 10:42 pm to rintintin
quote:
This dude printing or what.
Doubled Amazon - good for him
Posted on 7/30/22 at 8:18 am to rintintin
quote:
This dude printing or what. Hell of a buy on most of these
Hopefully he takes profit and doesn't round trip them. Still think we're going to goblin town
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