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Every week someone is kind enough to post the graphic from earningswhisper.com for upcoming earnings. While I find it a great starting point, the list isn't well suited for option spreads without a lot of gutting. I usually do this and keep it to myself, but thought I'd share and see if there's any interest moving forward. My reasons for cutting out companies may not match your own, so I listed the reasons why I removed it.
|Symbol||Report Day||ATM b/a spread||Reason|
I’ve been trading for around a year, and have been working with options for around 3 months. I understand some things including theta, delta, IV, etc but some of the lingo you guys use is just foreign to me. Any help?
I received a professional opportunity recently at a place that's seriously considering me. I got it mainly because they liked me but my drawback is I came from the stock world and they are strictly options, which has always been a testament to my learning disability. I am terrified that I may mess up this opportunity and asking for help from real life friends who seem to understand the material gets me ignored because of my learning difficulty or because they don't think its worth their time. I was wondering if someone can help tell me if I have it correctly wrapped in my head so far.
If I wanted to go long spy (this would be a day or week swing) I'd go to the OCT 19th options and current price is 292, the bid ask on the call side is 3.00/3.07 on at the money options. If I think it will go up I can buy the 292 strike or go for cheaper out of the money options like the 293 strike w/ 2.43bid/2.47ask if I think it's volatile enough to go higher just to get a cheaper priced option? Or does it not really matter?
In the previous question I'd also pay the premium each time because that'd put me in negative theta time decay correct? If so if I was to short sell a put would it achieve the same effect only I'd be positive theta and time decay on the option would be in my favor along with the price moving up? I'm having trouble understanding why the risk of short selling is worse because wouldn't either way still just put you naked on the option?
At this moment I'm looking to gear myself towards double calendar spreads because the firm doesn't do holds longer than 30-days. This firm focuses on scalping options but that's not entirely me at the start point. I want to opt for a risk averse method to establish a base from which to stand on. I figured this would be my safe bet plan to build up some buffer in my company account as well as keep their clients happy and stay invested (It's a small fund with a lot of small investors). Then in a few months after I can do what I do best and branch out to doing some directional trades. The only reason I don't want to do it off the bat is because I don't think their giving me very much buying power in the beginning for obvious reasons being that they don't know me yet.
I trade under the tastytrade mentality. Basically selling options all the time, keeping a small short portfolio delta, looking for high IVR with high nimber of ocurrences.
This works fine for me but I feel like my returns are too small. I often get crushed in a few stocks that start trending hard and the net short position is a pain in the ass in a heavy drifting market.
My main positions are short strangles and backratio spreads. I also have a few vertical spreads, short puts etc.
I would like to know how you guys manage to buy options and stay profitable? My understanding is the overpriciness of options makes it very hard due to implied volatility being higher then actual realised one. Especially on the put side.
I am open to expanding my mindset but I find it very hard to transition to a different approach to traidng options so I am wondering what are your experinces and different ways people achieve profitability.
Apologies for my bad english trying my best here 😂
I am rather new to the options and investment community, and I was wondering, with SPY options being relativity cheap and liquid, wouldn't long-term ITM or ATM SPY calls, traded up near the one year mark, mathematically always beat the market by a strong margin, even accounting for time value loss?
I was reading this: (your thoughts on the article would be good to hear as well)
Thinking about a long call for GM- $50 in Jan 2021. Thoughts?
I started this play off by writing the 1880p-1900p-1970c+1990c iron condor this morning for a $9 credit when the stock price was $1940. But later added more short delta when it dropped below $1920. Total credit now is just under $19 so I ingnored the losses on the put side for the probability calculation as I can almost always close it for less than the credit I recieved.
|Strike||Type||Exp Date||Avg Unit Cost||Quantity|
Pop: <73% (ignoring puts)
Profit Target: $400
Max Pofit: <$3700
Max Loss: <$6200
Adjustment Price: $1950 (Add more long delta)
I started with an iron condor because I didn't know which way the stock was going to trade today. If amazon mooned to $1950, I would have added more long delta instead. I expect to reach my profit target on Tuesday if it trades flat or continue to go down.
Looking at some spreads for the end of the month and came across a put spread that offered a lot of extra premium on the short put. It's a good bit in the money. Has anyone managed these with any success since early assignment is probably likely.
I did find this article.
But they make no mention of assignment risk.
edit: I'm speaking in general as I've come across this before, but one that caught my eye in particular today was actually a diagonal.
Just trying to make sure I am doing my math right.
Bought 100 shares of ABC at 1.80 for a total cost of 180.
Sold an in the money covered call for .35 for net credit of 35. Strike 1.50
I am expecting to get called away so I should have 180 - 150 = -30 cap gains on the shares offsetting 35 in premium collecting leaving my tax liability at 5. Is that correct or am I messing something up? Getting stock called away is the same thing as selling the stock in the eyes of the almighty IRS, right?
I've heard that the time values of options are "priced in" over weekends, but then when i look at options profit calculators, it seems as if the value of your option decreases over the weekend despite a closed market... does anyone have a good breakdown of this? thanks in advance
This is just a simple PSA to all rookies who do not understand why people make calls that reduce the profits on their trades like myself.
In my experience, I have been trading options on premiums for 3 months, and up until this week I have not had a single losing trade and I made a lot of money(relative to my portfolio). However, it hit hard this week with the way tech stocks have gone. I would consider myself risky with my plays and swing trading or long calls. If I played an actual play such as a straddle this week, I would have saved myself a lot of money.
Micron is set to announce their earings for the quarter in a couple hours. I'll put on this trade in a about 20 minutes or so (to avoid sudden price swings). I already collected about $100 in profit from a $45-44 ratio put spread that I closed this morning, puting this on for a lower initial credit, but potentially have a bigger payoff tomorrow. I'm choosing a butterfly instead of an iron condor because I want to be able to close this spread for a credit tomorrow. I have a neutral to bearish bias, if you want a neutral to bullish bias, consider buying the $46 put so you can collect a higher initial credit ($75), but will have a slightly higher exposure to the downside.
|Strike||Type||Exp Date||Direction||Unit Cost||Quantity|
Initial Credit: $13
Max Loss: $486
Max Profit: <$314
Any Profit: 71%
I could not get filled with the $40 put, and decided to leave it off due to time reasons. Hopefully the stock doesn't tank too much. I collected $56 in credit. My Pop is slightly higher at 72%, but math is about the same except for max loss, which is now about 8.4k.
Locked in a profit of $175, could have got more, but I'm short enough gamma on amazon weeklies as it is.
If I am thinking correctly. This would be a bearish strategy since I am taking in a credit on the call spread and buying the put spread with 2.50 in between the put strikes. My max profit would be the width of the put spread plus the credit received from the call spread. Correct?
If thinkorswim says an option contract has a 50% chance to be in the money, if I pick a credit spread strategy that gives me anything over 1:1 on my money, will this generally work?
I thought Delta could only be -1 to 1. Even if the number here on my TDA app is factored by 100 to represent the 100 shares, the value is still above 100. Not understanding why DELTA is reading as 178.
This is a VERY VERY simple calculator that I made on Python and honestly it can be even made in Excel if you wanted to. It doesn't calculate future option prices or use the Black-Scholes model. It's extremely simple and nothing impressive. It's a tool I use to not get greedy and stay disciplined (even though I love r/wsb). This calculator is for those that don't have enough funds (like me) to sell or exercise options and just trade on the premiums.
There is no GUI because I like seeing the past calculations and I personally think it's fine like this. Also, it's not impressive enough of a tool to warrant the extra time to make a GUI out of this. Feel free to make suggestions or let me know about any bugs.
EDIT https://repl.it/@ranacenas/OptionCalc for those that want to try it right away on your browser instead of downloading it. Just click on run and it should work.
From the readme and wiki:
A simple calculator that can run on the terminal for ease of input to calculate options trading scenarios
DISCLAIMER: THIS CALCULATOR DOES NOT PROVIDE ANY ADVICE, RECOMMENDATIONS, OR CLAIM TO PROVIDE ANY ACCURATE INFORMATION. THIS CALCULATOR IS NOT LIABLE FOR ANY LOSSES INCURRED AND SHOULD BE USED AT YOUR OWN DISCRETION. BY DOWNLOADING AND RUNNING THIS PROGRAM, YOU AGREE TO HAVE READ THIS DISCLAIMER AND ACCEPT TO USE THIS PROGRAM AT YOUR OWN RISK.
If you don't have Python 3 in your computer, download python 3 here https://www.python.org/downloads/.
Download the file and open it using python (right click and click on
Enter "pd" when prompted to use this calculator. The purpose of this calculator is to display profit/loss scenarios for various numbers of contracts bought. Upon typing 'pd' and pressing
enter, it will ask the current price of the long call/put, then the price you hope to sell the long call/put. By pressing
enter, it will execute and display the net profit/loss, cost of the trade, and the gross cost when selling for each number of contracts in
numcon_pd (see settings below)
enter pd or pp pd What is the price of the option? 1.75 What is the price you want get out 2.45 1.0 contract(s). Profit $ 48.10 buy cost: $ 185.95 Sell Cost: $ 234.05 2.0 contract(s). Profit $ 116.10 buy cost: $ 361.95 Sell Cost: $ 478.05 4.0 contract(s). Profit $ 252.10 buy cost: $ 713.95 Sell Cost: $ 966.05 10.0 contract(s). Profit $ 660.10 buy cost: $ 1769.95 Sell Cost: $ 2430.05
Enter "pp" when prompted to use this calculator. The purpose of this is to display the price to sell the option to make a profit set in the
profit_goals variable. It will ask the price of the option, how much you would want to make, and the number of contracts you plan to buy/own. Once executed, it will display the cost of the trade, the price to break even, the profit, and the price to sell the option.
enter pd or pp pp What is the price of the trade 1.75 How much money do you want to make? 500 How many contracts? 3 The cost of this trade is $ 537.95 To break even, sell at this price $ 1.836 Sell at $ 3.50 to make $ 500 Sell at $ 2.00 to make $ 50 Sell at $ 2.17 to make $ 100 Sell at $ 2.34 to make $ 150 Sell at $ 2.50 to make $ 200
To change the settings, simply open the python file in an IDE, code editor, or on Notepad(if you don't have any IDEs or code editors) and change the values. When changing the settings on Notepad, ensure that you save the file as a python file by adding ".py" at the end of the file name. It is important you don't change any other code other than the settings to ensure it runs correctly and smoothly.
The only variables that can be changed in this program are
com_base is the base commission for most brokers. If you're using robinhood, you can set this to 0.0.
com_per is the commission per contract most brokers charge. Current default setting is 1.0 for $1.00.
numcon_pd is a list of integers that represent the number of contracts in a scenario. So, if you are wondering how much an option trade would cost you and by how much a profit/loss would be depending on the amount of contracts you buy, the program will display and calculate it for you.
profit_goals is a list of integers that the program will use to calculate the price to sell the long option. For example, the current list is 50, 100, 150, and 200 therefore this program will use this list to calculate at what price to sell the long option to make $50, $100, $150, and $200.
So I had a 123/124 bear call spread for .90 credit exp sep 21.
Now yesterday TLRY halted before close and all options went to 0 so that means I received the 8kish of credit on the short call and lost the 8kish on the long call.
I woke up this morning assigned on the short call. My account was a credited 12.4k. I still have the long call worth 10.7k ish.
My account value was 2.5k yesterday and it shot up to 14k then to 25k.
My question is did the option buyer exercise after I had received the 8k credit? Why am I not short 100 shares on my account like no indicator? is it because of the long call collateral? why is my account up 25k.
I talked to many banks in Austria and it seems i cant buy options from american option chains (lets say weekly issued options for example). Most options for europe suck in a) price, b) realtime and c) there are not many.
For example amazon calls I own atm. https://i.imgur.com/Hss0Qtp.png
Strike is 1980 and the only page to look at this calls is giving me an option in EUR (which is right) but it also shows the stockprice in EUR (which is wrong). Why are European Issuer like this? Is there no professional Option trading market?
I would love to find an european broker who is able to sell me US option chains and shows me realtime values. Like Robinhood but it doesnt need to be free!
suppose i’m bearish on a stock that has a lot of movement and therefore very high IV (150-350%). if i’m predicting impending doom, is selling a call spread a better option than buying a put in order to take advantage of a volatility crash after the bubble bursts and the chaos subsides?
i guess i’m assuming that i would hold the put or the spread for equal (or nearly equal) amounts of time. is that the only confounding factor?
I understand the how to set up the call butterfly
Buy X contracts at say $111 calls Sell 2X contracts at $112 calls Buy X contracts at $113 calls
But my question is - what’s the point // thinking behind this strategy? Also when would you utilize this?
Thanks to anyone who could explain
Okay, let's say I sold an iron condor on SPY.
So I have sold an OTM call, sold an OTM put, bought an OTM call, and bought an OTM put.
Now, say SPY is still trading within the profitable range for me, so all options are OTM. Their ex-dividend date is 9/21.
What is the likelihood of me being assigned early, and would I be responsible for a dividend?