Fills

[Yodean]

I just opened a TI Dead-Butterfly spread on VALE. Sold a May 20th $17P for $95, bought a September $19C for $91. After commissions brought in $2.70 net credit.

Henceforth, FreedomNinja ---> OptionsNinja.

[AstuteShift]

Eric going balls deep into advanced option trades, fantastic stuff!

[Eric]

Henceforth, FreedomNinja ---> OptionsNinja.

In that case I nominate LoriPrecisely to be given the title of FreedomNinja (or PissedOffMamaBear).

[LoriPrecisely]

Henceforth, FreedomNinja ---> OptionsNinja.

In that case I nominate LoriPrecisely to be given the title of FreedomNinja (or PissedOffMamaBear).

Thank you, Eric. I would be honored to be the successor of your nickname.
I will also aspire to your new nickname. I printed the three articles I found on TI website, watched the videos Sol recently suggested, and I have been watching a lot of other YT videos to learn more. I plan to follow your suggestions closely for my first options transaction. I am currently awaiting approval from Schwab for options trading.

[scott]

Henceforth, FreedomNinja ---> OptionsNinja.

In that case I nominate LoriPrecisely to be given the title of FreedomNinja (or PissedOffMamaBear).

Thank you, Eric. I would be honored to be the successor of your nickname.
I will also aspire to your new nickname. I printed the three articles I found on TI website, watched the videos Sol recently suggested, and I have been watching a lot of other YT videos to learn more. I plan to follow your suggestions closely for my first options transaction. I am currently awaiting approval from Schwab for options trading.

A couple of options, depending on where you live would be .45ACP or .40S&W, not generally profitable, but a decent hedge.

[LoriPrecisely]

A couple of options, depending on where you live would be .45ACP or .40S&W, not generally profitable, but a decent hedge.
[/quote]

I hope to never need one of those things. I hate the sight of blood. A taser would be more to my liking. Strike from a safe distance and run! Or, maybe I should learn karate.
Anyway, back to options...I will stick to $$$.

[Yodean]

I just opened a TI Dead-Butterfly spread

@OptionsNinja: quick question from an OptionsNoob - does is make any significant difference if one is selling a covered call past a date when a stock splits?

I SCC'd AAPL sept22-170 today as part of my continuous cash generation strategy.

Been SCC'ing daily to death ... generating significant revenue ... feel a bit like a hamster on a wheel, but it's working, thus far.

[LoriPrecisely]

I just opened a TI Dead-Butterfly spread

@OptionsNinja: quick question from an OptionsNoob - does is make any significant difference if one is selling a covered call past a date when a stock splits?

I SCC'd AAPL sept22-170 today as part of my continuous cash generation strategy.

Been SCC'ing daily to death ... generating significant revenue ... feel a bit like a hamster on a wheel, but it's working, thus far.

Eric and Yodean, Did you guys take a course to learn how to do this? I have found a girl, Rose Han, who teaches a 12 weeks options program for a fee of $997. She used to be a stock broker. She talks about risk-defined trades where she will sell $100 put and buy a $95 call of the same stock to reduce her risk. She usually chooses the 70% probability range. She uses QQQ for regular income. I am thinking of buying her course. I am also reading all the articles on Investopedia and Options Alpha. I want to learn this.

[Yodean]

Eric and Yodean, Did you guys take a course to learn how to do this? I have found a girl, Rose Han ...

@FreedomNinja: no, lol, everything I know about options - which is very little - I have learned from BJ (BossJedi), the TIT publications, and studying the posts from subs like OptionsNinja, ExcelNinja, and YY, as well as a few YT videos.

I generally learn faster and in more depth, in most things, from doing, as opposed to theory - I don't paper-trade, lol.

Occasionally I get knocked down - following this general philosophy - but I am pretty good at getting back up. Usually.

I'm a big believer in learning a few basics really well before progressing - the whole "it's better to practice one kick, one thousand times, than one thousand different kicks, one time" - so besides participating in the official TIT options trades, I am only SCC'ing (Selling Covered Calls) and SPTO'ing (Selling Puts To Own, or cash-secured puts).

I have a lot of large positions in many different stocks, so I have found the SCC strategy quite useful for generating cash continuously, as well as for risk-managed profit-taking.

I'm not planning to do more with options other than the above for the foreseeable future, until I've accumulated hundreds to thousands of trades SCC'ing and SPTO'ing on my own.

[Eric]

@OptionsNinja: quick question from an OptionsNoob - does is make any significant difference if one is selling a covered call past a date when a stock splits?

I SCC'd AAPL sept22-170 today as part of my continuous cash generation strategy.

When splits happen or businesses get spun out the options get adjusted so there will be the old options adjusted for the split and new options representing the normal 100 shares post split/spinoff. I'm having a hard time finding one of pulling it up on Yahoo finance but in Schwab (which prevents screenshots) I can see there are two different options for T (AT&T) for October... There's the new "T" option which is for 100 shares of AT&T, then there's what Schwab calls "T1" which are old existing options prior to the spinoff. "T1" is for 100 shares of AT&T, 24 shares of WBD (spun out of T) and apparently $4.57 cash.

Don't forget to be tactical in your option trades. You would have made far more option premium if you sold those APPL $170C last Friday when APPL was trading at $165 vs today with Apple going down the drain in the mid $150's.

Sell the covered calls on an up day/week/month etc. And sell cash secured puts on down days/weeks/months; you'll get paid a lot more option premium.

[Yodean]

Don't forget to be tactical in your option trades. You would have made far more option premium if you sold those APPL $170C last Friday when APPL was trading at $165 vs today with Apple going down the drain in the mid $150's.

Sell the covered calls on an up day/week/month etc. And sell cash secured puts on down days/weeks/months; you'll get paid a lot more option premium.

Noted. Thanks for the advice.

[froggo]

https://youtu.be/gG7965Deehw?t=00m52s

love impractical jokers... lol

[Eric]

Noted. Thanks for the advice.

The beautiful thing about options is that you have so many...um...options...

I'm just making up a number... I assume you got paid $7.50/share for selling those APPL calls. If APPL drops to $150 you might be able to buy back those sold calls for $5/share-result: Profit. Then you can wait for APPL to go back up to $165 and you can sell $170 calls for $11/share, or sell $180 calls for $7.50-result: Profit.

Here's where it gets nutty, and this is not even a complex strategy... Say you don't make any adjustments and simply ride these covered calls towards expiration. If it looks like the shares are going to get called away and you decided that you want to keep them, all you have to do is roll the old calls into new ones and you'll get paid again!

Right now on Yahoo finance APPL is quoted at $159.02. Just to illustrate how my previous paragraph works let's assume you sold $157.50 strike options for this Friday...as of now it looks like shares would get called away. You can buy back those May 6th $157.50 calls for $3.55/share, then turn around and sell May 20th $160 calls for $4.20/share!

In that scenario, just by selling 2 weeks more time you got paid $0.65/share for breaking your promise to sell at $157.50 and offering to sell at a higher price ($160) in the future! You could work the strike price way up if you went further out into the future... imagine this:

Yodean: I know I promised to sell you my APPL on May 6th for $157.50/share but I no longer like the terms of that deal so here's the new deal: I'll sell you my shares in August for $175/share ($17.50/share more than the original deal).
Stock Market: SWEET DEAL! Pay me $3.55/share to close the contract for this week and I'll pay you $5.15/share for the privilege of buying your shares in August at a much higher price.

Of course if APPL is massively overbought and the masses are euphoric maybe you do let the shares get called away...'cuz you've got options. The puns are getting bad.

[froggo]

froggo fill:
2/5/22, buy, GPN @ $122

[Yodean]

The puns are getting bad.

Thanks for the detailed option scenarios - I am studying these examples and doing these types of trades now on an almost daily basis.

Good punning is funny.