Random Option plays on Market Update stock plays

[SOL]

I sold puts on WMT when it hit traded to the suggested ranges. As a rule we wait a minimum of 24 hours before getting into plays. Sometimes we get better prices sometimes we don't. I just like the idea of selling a put and getting paid to place a limit order.

[Centeron631]

Sold wmt put 2022 sept 16 115 @ 6.50 Now just have to figure what to do with this $650....

[Yodean]

This week, bought Fear. Today, bought Panic. More to come.

[Triplethought]

QCOM - 125

Technically based on last update aren't Red plays are on hold?

Yes, they are, but individuals are free to act independently. in the next update, we want to issue 1 to 2 put plays but we are selling them. Once filled we might use some of the proceeds to get into calls. We want to ease into this there will probably be boatload of questions after the plays are issued.

SOL I'm thinking of selling a put on WMT but it commits 100 shares which means tying up 11-12K of cash if the shares get put to me. That's a lot more commitment then a 1/4 lot limit order of $2500. Can you comment on the risk/reward of that? No real way not to play 100 shares.

[SOL]

Technically based on last update aren't Red plays are on hold?

Yes, they are, but individuals are free to act independently. in the next update, we want to issue 1 to 2 put plays but we are selling them. Once filled we might use some of the proceeds to get into calls. We want to ease into this there will probably be boatload of questions after the plays are issued.

SOL I'm thinking of selling a put on WMT but it commits 100 shares which means tying up 11-12K of cash if the shares get put to me. That's a lot more commitment then a 1/4 lot limit order of $2500. Can you comment on the risk/reward of that? No real way not to play 100 shares.

Yes it is a lot of capital and from a risk to reward perspective it would limit your ability to deploy additional lots if your lot size is 10K. So the best option would be to buy deep in the money calls, on down days. For example the 115 or 120 Jan 2024 calls



This way you would commit 1700 or 2K to control 100 shares for over 18 months. However, low-risk traders should not use this strategy to buy more options than they would share. Medium risk-takers can deploy up to 35 to 40 per cent of the capital they would commit to buying shares. So in this case they would aim for 2 options at most

The only other alternative would be to sell the put and then use down days to slowly deploy all that premium into purchasing far out of the money calls with at least 9 months of time premium

[Triplethought]

Yes, they are, but individuals are free to act independently. in the next update, we want to issue 1 to 2 put plays but we are selling them. Once filled we might use some of the proceeds to get into calls. We want to ease into this there will probably be boatload of questions after the plays are issued.

SOL I'm thinking of selling a put on WMT but it commits 100 shares which means tying up 11-12K of cash if the shares get put to me. That's a lot more commitment then a 1/4 lot limit order of $2500. Can you comment on the risk/reward of that? No real way not to play 100 shares.

Yes it is a lot of capital and from a risk to reward perspective it would limit your ability to deploy additional lots if your lot size is 10K. So the best option would be to buy deep in the money calls, on down days. For example the 115 or 120 Jan 2024 calls



This way you would commit 1700 or 2K to control 100 shares for over 18 months. However, low-risk traders should not use this strategy to buy more options than they would share. Medium risk-takers can deploy up to 35 to 40 per cent of the capital they would commit to buying shares. So in this case they would aim for 2 options at most

The only other alternative would be to sell the put and then use down days to slowly deploy all that premium into purchasing far out of the money calls with at least 9 months of time premium

Thanks Sol. I put in a limit order to buy a WMT call $110 EXP 01/19/24 @$24. My understanding is that If I get it I'm risking $2400 to be able to buy 100 shares of Walmart at $110 for the next 18 months. If the market (or Walmart) tanks for extended period I lose it all. If market recovers I think Walmart should recover (who is poised to take away market share from Walmart?.... unless it's online sellers like Amazon). I've not done well with calls. Let's hope this is an exception.

[SOL]

Based on this idea I just sold 1 PUT CYBEROPTICS CORP $35 EXP 11/18/22 @$3. I was surprised it executed immediately so I probably paid too much. Received only $300. So next phase should be to purchase calls? What date and strike would you be looking at?

Don't be in such a rush to give away puts for so cheap. You sold it way too cheap. The current bid is 3.10, and the ask is 4.40. At the very minimum, you divide the spread in half and add it to the bid; in this case, it would be 3.10 plus 65, which means you should have asked for 3.75 on the low end. If filled, 375 would be added to your account. My limit order is still waiting to get filled as I am asking for 3.90. If filled, I will only deploy part of this into calls as I don't want to give up all my premium on short term calls. So iI would aim for Nov 45 or 50, but I would not pay more than 3.60 and 1.90, respectively. Be greedy when you buy or sell options. Another way to bank slow but sure gains would be to buy back the puts when they show gains. In this volatile environment, you can keep jumping in and out. On up days sell covered calls. On down says sell puts. However, never overcommit funds to a given position.

[Yodean]

In this volatile environment, you can keep jumping in and out. On up days sell covered calls. On down says sell puts.

Yeh, been doing this since the last week of April. Consistently very profitable, whether the markets are up or down.

Even switched some of my core GBTC position to BITO so I could SCC and SCSP the snots out of the latter. Unfortunate that GBTC doesn't allow options trading. Did the same with ETHE - switched to a Canadian spot ETH ETF that will allow me to "Wheel" the sh*t out of it, lol.

https://twitter.com/i/status/1526848236815884288

[Yodean]

The only other alternative would be to sell the put and then use down days to slowly deploy all that premium into purchasing far out of the money calls with at least 9 months of time premium

I'll continue the theme of thread drift here.

I know it depends on the specific stock, as well as the technical pattern, capitalization size, etc., but for ITM LEAPs, would rough guidelines be as follows?

-set strike for about 10% - 30% below current price; personally, I try to find a decent support level using TA and set the strike just below;

-buy 1 call or so for each 100 shares you would normally buy for a position trade;

-expiry 1 - 2 years;

Questions:

-When to take profits? I know this depends on time to expiration (theta) to some extent but some rough guidelines may be helpful.

-Is it beneficial in certain situations to SCC on your ITM LEAPs? If so, when? Or is it just too gimmicky.

In general, currently still prefer to SCP or buy shares outright, then SCC the snots out of them.

[Triplethought]

Based on this idea I just sold 1 PUT CYBEROPTICS CORP $35 EXP 11/18/22 @$3. I was surprised it executed immediately so I probably paid too much. Received only $300. So next phase should be to purchase calls? What date and strike would you be looking at?

Don't be in such a rush to give away puts for so cheap. You sold it way too cheap. The current bid is 3.10, and the ask is 4.40. At the very minimum, you divide the spread in half and add it to the bid; in this case, it would be 3.10 plus 65, which means you should have asked for 3.75 on the low end. If filled, 375 would be added to your account. My limit order is still waiting to get filled as I am asking for 3.90. If filled, I will only deploy part of this into calls as I don't want to give up all my premium on short term calls. So iI would aim for Nov 45 or 50, but I would not pay more than 3.60 and 1.90, respectively. Be greedy when you buy or sell options. Another way to bank slow but sure gains would be to buy back the puts when they show gains. In this volatile environment, you can keep jumping in and out. On up days sell covered calls. On down says sell puts. However, never overcommit funds to a given position.

OK thanks. Put in limit order CALL CYBEROPTICS CORP $50 EXP 11/18/22 at $1.90 per your guidelines. So if it executes I spent $190 of my $300 premium on the put. I *kinda* get the play. If 11/18 the stock were from $35.01 to $49.99 I would pocket the $300 on the put and lose $190 on the call. If 11/18 the stock were less than $35 (say it was $33) I would be forced to buy 100 shares for $3500 so I'd be paying (3500-300+190)=$3390 for the stock. If on or before 11/18 the stock were above $50 I'd keep the $300 AND make money by (typically) selling the call before it expires.

[harryg]

Rough guideline for ITM leaps is



Nah




Just buy the shares





© 1997 harryg Simplified Guide to the Markets








Personal opinion only, of course

[Yodean]

Rough guideline for ITM leaps is



Nah




Just buy the shares





© 1997 harryg Simplified Guide to the Markets

Fair enough. Rationale? I like to have multiple "options" ... lol.

[Yodean]

OK thanks. Put in limit order CALL CYBEROPTICS CORP $50 EXP 11/18/22 at $1.90 per your guidelines. So if it executes I spent $190 of my $300 premium on the put. I *kinda* get the play. If 11/18 the stock were from $35.01 to $49.99 I would pocket the $300 on the put and lose $190 on the call. If 11/18 the stock were less than $35 (say it was $33) I would be forced to buy 100 shares for $3500 so I'd be paying (3500-300+190)=$3390 for the stock. If on or before 11/18 the stock were above $50 I'd keep the $300 AND make money by (typically) selling the call before it expires.

You're learning fast ... I suspect these option strategies will end up being more profitable for you than trying to rent out your commercial real estate.


https://twitter.com/i/status/1528511094897135619

[Yodean]

Just realised that this is not strictly buys and sells, my excuse is I was only responding. Look forward to meeting you in the doghouse.

Lol, if I am not destroying threads or annoying someone, somewhere in the world, I haven't been true to myself. Can't have that ...

https://twitter.com/i/status/1528375672896356352

[SOL]

Based on this idea I just sold 1 PUT CYBEROPTICS CORP $35 EXP 11/18/22 @$3. I was surprised it executed immediately so I probably paid too much. Received only $300. So next phase should be to purchase calls? What date and strike would you be looking at?

Don't be in such a rush to give away puts for so cheap. You sold it way too cheap. The current bid is 3.10, and the ask is 4.40. At the very minimum, you divide the spread in half and add it to the bid; in this case, it would be 3.10 plus 65, which means you should have asked for 3.75 on the low end. If filled, 375 would be added to your account. My limit order is still waiting to get filled as I am asking for 3.90. If filled, I will only deploy part of this into calls as I don't want to give up all my premium on short term calls. So iI would aim for Nov 45 or 50, but I would not pay more than 3.60 and 1.90, respectively. Be greedy when you buy or sell options. Another way to bank slow but sure gains would be to buy back the puts when they show gains. In this volatile environment, you can keep jumping in and out. On up days sell covered calls. On down says sell puts. However, never overcommit funds to a given position.

OK thanks. Put in limit order CALL CYBEROPTICS CORP $50 EXP 11/18/22 at $1.90 per your guidelines. So if it executes I spent $190 of my $300 premium on the put. I *kinda* get the play. If 11/18 the stock were from $35.01 to $49.99 I would pocket the $300 on the put and lose $190 on the call. If 11/18 the stock were less than $35 (say it was $33) I would be forced to buy 100 shares for $3500 so I'd be paying (3500-300+190)=$3390 for the stock. If on or before 11/18 the stock were above $50 I'd keep the $300 AND make money by (typically) selling the call before it expires.

Pretty close. If you are filled on the call yes, 190 of the premium would be used to pay for the call leaving you with 110. If the stock starts to trend upwards, say if it hits 45, your call will rise in value, probably close to a double depending on how fast it hits that target. So you could sell your call for 3.80 and then close your put position out. At 45, you could probably buy the put back for under 1.00. What I am trying to say is that you have no obligation to wait until expiration. You could also weave and bob. When the call rises in value sell it; when the put drops in value, buy it back and then rinse and repeat

My goal here is to teach simple but advanced options strategies to several subscribers with the hope that they start to contribute and help other newbies.