Interim Market Update July 28, 2022

[LoriPrecisely]

I think I am ready to try something new in regards to buying Calls.
I just need a little affirmation that I have this right.
Anyone is welcome to chime in.

I will buy a Call for AMAT with Jan 2023 expiry.
Current market price is $106.
I chose strike of $115.
Cost is $8.85.

Then the goal is to wait for the value of the stock to increase, which will in turn increase the value of my option, then I sell the option at a profit.

[AstuteShift]

I think I am ready to try something new in regards to buying Calls.
I just need a little affirmation that I have this right.
Anyone is welcome to chime in.

I will buy a Call for AMAT with Jan 2023 expiry.
Current market price is $106.
I chose strike of $115.
Cost is $8.85.

Then the goal is to wait for the value of the stock to increase, which will in turn increase the value of my option, then I sell the option at a profit.

This is a call debit spread. You cut theta decay with selling the 115 strike in exchange of less profit to the upside

A more advanced take is, for example, selling naked puts and buy calls. This is an explosion bullish bet and it can lead to big profits. Just an example lol

Personally I like debit spreads and credit spreads. Simple

[PuppBaby]

I think I am ready to try something new in regards to buying Calls.
I just need a little affirmation that I have this right.
Anyone is welcome to chime in.

I will buy a Call for AMAT with Jan 2023 expiry.
Current market price is $106.
I chose strike of $115.
Cost is $8.85.

Then the goal is to wait for the value of the stock to increase, which will in turn increase the value of my option, then I sell the option at a profit.

This is a call debit spread. You cut theta decay with selling the 115 strike in exchange of less profit to the upside

A more advanced take is, for example, selling naked puts and buy calls. This is an explosion bullish bet and it can lead to big profits. Just an example lol

Personally I like debit spreads and credit spreads. Simple

I don't have much knowledge in AMAT, I prefer lower average cost per contract. I'll share what I have planned which is almost ripe for trading.
UUP $29 Call for Mar 17th 2023. Current cost is 0.86 per contract.
I am waiting for UUP to drop below 28.10, currently its at 28.15.

I have found a rhythm that works for me, I only use options as a supplement with 10% of my funds reserved for it and averaged down 1/3rd lots similar to my stock account. I find the most difficult thing about option trading is selling. It's hard to cut a loser and harder to sell a big winner bc you always want more and seldom does it pay.

[SOL]

. I find the most difficult thing about option trading is selling. It's hard to cut a loser and harder to sell a big winner bc you always want more and seldom does it pay.

Kudos for being brutally honest, now the image you chose fits perfectly. When it comes to winners here are some ideas

1) Only go for great gains if you are willing to accept larger losses don't mix and match.
2) If new to buying options, then start small as in start by purchasing options on stocks, etfs that have lower premiums but reachable strike prices

The best way is a hybrid trade, combining the ART of selling options with the risker part of buying options.

For example, sell AMAT 85 or 90 put and use part of the proceeds to purchase say a call with a strike price that is a bit higher than you would normally go after. Usually, the put should have more time premium and the call should have less; this is based on the above scenario. Now if things go according to plan, the option will start to rise, and the put will lose value. You can then either wait for the premium on the put to drop and match the premium you paid for the call, in this case, you now own a call for free. Or buy it back when it pays for 50% or more of what you paid for the call so now got into that call at a 50% discount.

As always start small and work your way up. When selling puts only sell them on stocks you don't mind owning

[MarkD]

sold a TQQQ put Aug 5 2022 33P @ 0.85

[jlhooter]

Change of strategy for options traders that are willing to take the risk.

In a market that was trying to put in a bottom, which was the case from June to mid-July, the best strategy is to sell calls on up days and puts on down days.

When the momentum shifts to the upside, as is the case now, the best strategy, albeit with more risk (no free meals in the market), is to use down days to sell puts and use some of the funds to purchase calls. One should scale back on selling covered calls when the momentum has shifted to the upside. Then when you recouped the premium you used to purchase the calls, buy back the put position. In essence, you now have a long position (via the calls), which did not cost you a penny.

When the market is in a downward phase, and you don't want to sell your stock. Then use up days to sell covered calls, and use part of the funds on the same day to purchase puts. When you recoup the funds you used to purchase the puts via a drop in the call premium, buy back the calls and now you have a position that is hedged for free. Make sure you understand the nuances of these trades 1000% before initiating one

Sol,
Took me a bit, but I get it now. Thanks.
Market shifts up: down days: leverage the STO Put Premium to BTO Call for a net credit. On an up day BTC Put for enough premium to cover the BTO Call for free. Example:
Down Day: STO P: $10; BTO C: $5; net: $5
Up Day: BTC P: $5; net $0 but hold BTO C for free.

Opposite true for Markets shift down; example
Up Day: STO C: $10; BTO P: $5; net: $5
Down Day: BTC C: $5; net: $0; hold BTO P for free

My mind is blown!! Thanks for this.

The best way to learn is to ponder over something repeatedly, then see the light, and now you learn to catch your own fish for life. Someone steps in and helps you all the way, but you learn nothing, and you keep having to buy the worms in an attempt to maybe catch something. Congrats

Sol,
I have a number of plays setup and ready to go, but only if my thresholds are crossed. Of the 10 plays I teed up, I will see which I actually play if any. There has been a significant succession of up-days, so waiting for some down days to activate SCSPs. The plays of interest are AMD, AAPL, AMZN, GOOGL, INTC, NVDA, PEP, QCOM, TSM and TXN. I have also mapped these SCSPs to buying Calls. No rush on my end, so we will see which plays I will be in.

[Yodean]

I just need a little affirmation that I have this right.

I will buy a Call for AMAT with Jan 2023 expiry.
Current market price is $106.
I chose strike of $115.
Cost is $8.85.

No right or wrong - if it's profitable, it's right - if not, hopefully you learned something. Ms. Market is never wrong, but traders often are.

Your trade is a simple long call option - it's basically a bet that before Jan '23, AMAT will test or go higher than $115.

I think it's best to understand the concept of theta decay (you may already know this) and how to do some technical, trend, and sentiment analysis on your own when making trades like this.

AstuteShift, MarkD, and I have all mentioned it previously - you can learn a lot about investing by playing poker.

For any options trade, I phrase it in simple terms to myself - if I can't even do that, then I'm pretty sure it's a shi*tty trade. Even when I do it, it may still end up being a bit smelly ...

[MarkD]

https://imgur.com/a/fEy09oz

An example of a daily chart I peruse to determine points of potential trend change (hoping the image uploads correctly). 13556 is the next spot I would look for trend to change (confluence of several volume indicators).

[SOL]

Sol,
I have a number of plays setup and ready to go, but only if my thresholds are crossed. Of the 10 plays I teed up, I will see which I actually play if any. There has been a significant succession of up-days, so waiting for some down days to activate SCSPs. The plays of interest are AMD, AAPL, AMZN, GOOGL, INTC, NVDA, PEP, QCOM, TSM and TXN. I have also mapped these SCSPs to buying Calls. No rush on my end, so we will see which plays I will be in.

The key to success in any venture is to move slowly until you feel comfortable, then you can pick up the pace. When playing with options it is always best to start small and then slowly scale up.

[LoriPrecisely]

https://imgur.com/a/fEy09oz

An example of a daily chart I peruse to determine points of potential trend change (hoping the image uploads correctly). 13556 is the next spot I would look for trend to change (confluence of several volume indicators).

When you say, "trend change", you are thinking that once it hits 13556, it will start a downward trend?
I am waiting for the slight resistance in the first two weeks that Sol is expecting, then I will buy more stock. Then, you think 13556 indicates "time to sell"?

[LoriPrecisely]

Sol,
I have a number of plays setup and ready to go, but only if my thresholds are crossed. Of the 10 plays I teed up, I will see which I actually play if any. There has been a significant succession of up-days, so waiting for some down days to activate SCSPs. The plays of interest are AMD, AAPL, AMZN, GOOGL, INTC, NVDA, PEP, QCOM, TSM and TXN. I have also mapped these SCSPs to buying Calls. No rush on my end, so we will see which plays I will be in.

The key to success in any venture is to move slowly until you feel comfortable, then you can pick up the pace. When playing with options it is always best to start small and then slowly scale up.

Wow, JL, that is a LOT of Put assignment cash!!
The only thing I don't like about doing long term Puts is tying up my cash in Put assignment. I know I can close out early, but have not ventured in that direction yet. Just watching the options premiums change right now.
The AMAT Call I have been watching increased by $1.50 today, because AMAT rose by $5.
I think I have to learn to trust my intuition more.
I hope we do see a slight pullback soon, so I can get in.
Otherwise, I should just get in now.

[MarkD]

https://imgur.com/a/fEy09oz

An example of a daily chart I peruse to determine points of potential trend change (hoping the image uploads correctly). 13556 is the next spot I would look for trend to change (confluence of several volume indicators).

When you say, "trend change", you are thinking that once it hits 13556, it will start a downward trend?
I am waiting for the slight resistance in the first two weeks that Sol is expecting, then I will buy more stock. Then, you think 13556 indicates "time to sell"?

Most important word, "Potential". Lot of volume converges at that value. Volume by price (bars to the left), Anchored VWAP (dashed pink from ATHs), Peak Expansion Energy (solid red line). This tells me there's a lot of o/h resistance at that value. Might be the interim or not. Watch price at that area imo. And price is a range so not a fixed value.

That area of price might represent the ST top Sol is anticipating before surging back to ATHs on some indices/equities.

[jlhooter]

Sol,
I have a number of plays setup and ready to go, but only if my thresholds are crossed. Of the 10 plays I teed up, I will see which I actually play if any. There has been a significant succession of up-days, so waiting for some down days to activate SCSPs. The plays of interest are AMD, AAPL, AMZN, GOOGL, INTC, NVDA, PEP, QCOM, TSM and TXN. I have also mapped these SCSPs to buying Calls. No rush on my end, so we will see which plays I will be in.

The key to success in any venture is to move slowly until you feel comfortable, then you can pick up the pace. When playing with options it is always best to start small and then slowly scale up.

I am absolutely moving slow. I have since eliminated NVDA INTC and TSM and I am only playing PEP at this time. I am patiently waiting on the right moves on the other potentials but if I do not get into any of the rest no big deal. But to be clear I am absolutely comfortable and with no feelings about it. This stategy makes clear sense to me and is yet another tool in my little red toolbox. Thanks again.

[outof thebox]

Sol,
I have a number of plays setup and ready to go, but only if my thresholds are crossed. Of the 10 plays I teed up, I will see which I actually play if any. There has been a significant succession of up-days, so waiting for some down days to activate SCSPs. The plays of interest are AMD, AAPL, AMZN, GOOGL, INTC, NVDA, PEP, QCOM, TSM and TXN. I have also mapped these SCSPs to buying Calls. No rush on my end, so we will see which plays I will be in.

The key to success in any venture is to move slowly until you feel comfortable, then you can pick up the pace. When playing with options it is always best to start small and then slowly scale up.

I am absolutely moving slow. I have since eliminated NVDA INTC and TSM and I am only playing PEP at this time. I am patiently waiting on the right moves on the other potentials but if I do not get into any of the rest no big deal. But to be clear I am absolutely comfortable and with no feelings about it. This stategy makes clear sense to me and is yet another tool in my little red toolbox. Thanks again.

As SOL says slow but sure then move to sure and steady and I will add once you get a feel for the markets or a stock, them you can move into rock and roll mode when the time is right.

[jlhooter]

The key to success in any venture is to move slowly until you feel comfortable, then you can pick up the pace. When playing with options it is always best to start small and then slowly scale up.

I am absolutely moving slow. I have since eliminated NVDA INTC and TSM and I am only playing PEP at this time. I am patiently waiting on the right moves on the other potentials but if I do not get into any of the rest no big deal. But to be clear I am absolutely comfortable and with no feelings about it. This stategy makes clear sense to me and is yet another tool in my little red toolbox. Thanks again.

As SOL says slow but sure then move to sure and steady and I will add once you get a feel for the markets or a stock, them you can move into rock and roll mode when the time is right.

I feel like I get an understanding at some point but dont fully know until I buy and make mistakes and learn from them. It is part of my 'educational budget' for now.