Anyone trading options here?

[TheFalls]

This stuff puts betting on sports to bed. I got in the game for the first time a month ago and closed my position today...but I sweat it the whole time. All day, every day.

I'm buying straight up naked OTM puts on ETFs. I'm looking for a 5% move down before Trump wins the election or Hillary is sent to the pen.

 

[Recon792]

Sept and oct are usually very volatile months --
if you want excitement check out the 2x volatilty ETF - UVXY - --
wild moves intraday the last week.

 

[TheFalls]

ya...volatility is finally back. I would have to go long that ETF...which is fine. I would have to buy puts on an inverse vol ETF.

 

[Recon792]

ya...volatility is finally back. I would have to go long that ETF...which is fine. I would have to buy puts on an inverse vol ETF.

you could buy calls and puts on UVXY--
calls if you think vol will keep rising and puts if you think vol will go down.

 

[Ricboff]

sept is a DOWN month historically. If the market stays the course by say mid Oct, its Hillary in the bag. if not,be weary...imho. A Trump nomination will provide a correction , take advantage. Both cartoon characters ...but does it really matter at this point?

 

[TheFalls]

you could buy calls and puts on UVXY--
calls if you think vol will keep rising and puts if you think vol will go down.

wow...ya, I could do that. Would be like 10x leverage or something unreal. I may do it

 

[Recon792]

wow...ya, I could do that. Would be like 10x leverage or something unreal. I may do it

more like 100x leverage.......gamble it up my man!!!!

 

[TheFalls]

sept is a DOWN month historically. If the market stays the course by say mid Oct, its Hillary in the bag. if not,be weary...imho. A Trump nomination will provide a correction , take advantage. Both cartoon characters ...but does it really matter at this point?

Since 2000, it's been down 57% of the time in September. Only 31% of the Octobers during that same stretch... I would have figured that was reversed.

It's been down 50% of the time in Sept and 75% of the time in Oct in election years since 2000.

Very good chance to fall precipitously imo.

 

[Ricboff]

yup. Thanks for the factual information


i have no clue who will win this years nonsense. I strongly feel the market has ALREADY taken the old lady in. If Mr Trump wins? LOOK OUT. ...........waiting to pounce, just in case they elect the idiot narcissist ....

 

[niltes]

I trade options all the time. I rarely buy and usually only sell.
buying options is like being a bettor and selling is like being
the house. if you must buy, buy only when the time
premium is low. conversely only sell when the time premium
is high. I use options to hedge positions and mitigate risk.
I do sell naked options when I have an opinion. my favorite
position is selling naked tesla calls after the stock has had a runup
as it is consistently way overpriced. my second favorite position
is to sell naked puts after a sell off in companies that make money,
pay dividends, and trade at low PE ratios. think apple or gilead
for example. hope this helps.

 

[Ricboff]

I trade options all the time. I rarely buy and usually only sell.
buying options is like being a bettor and selling is like being
the house. if you must buy, buy only when the time
premium is low. conversely only sell when the time premium
is high. I use options to hedge positions and mitigate risk.
I do sell naked options when I have an opinion. my favorite
position is selling naked tesla calls after the stock has had a runup
as it is consistently way overpriced. my second favorite position
is to sell naked puts after a sell off in companies that make money,
pay dividends, and trade at low PE ratios. think apple or gilead
for example. hope this helps.

tremendous way to generate income in a portfolio. Always the house...

 

[Illini]

I trade options all the time. I rarely buy and usually only sell.
buying options is like being a bettor and selling is like being
the house. if you must buy, buy only when the time
premium is low. conversely only sell when the time premium
is high. I use options to hedge positions and mitigate risk.
I do sell naked options when I have an opinion. my favorite
position is selling naked tesla calls after the stock has had a runup
as it is consistently way overpriced. my second favorite position
is to sell naked puts after a sell off in companies that make money,
pay dividends, and trade at low PE ratios. think apple or gilead
for example. hope this helps.

You can lose your house if something crazy in a stock happens overnight, and many have. You have to at least buy some protection for pennies in way out of the money options. Naked selling is scary.

 

[niltes]

naked selling is scary and there is no way of protecting oneself
easily if/when a stock/commodity gaps in the wrong direction.
naked selling is not for those faint of heart or light of
bankroll. but prudent well thought out positions offer sizable
returns and an acceptable risk/reward ratio.

 

[PatsFan1283]

I've bought some OTM calls on blue chips but I found the market to mostly be efficient unless you really do a deep dive and my knowledge of technical analysis isn't great.

Getting the stock called away from you can be a headache with taxes as well.

I can see how selling naked tesla calls could be a goldmine if you can stomach the risk. That thing could drop 20% at the open any day of the week.

 

[TheFalls]

I trade options all the time. I rarely buy and usually only sell.
buying options is like being a bettor and selling is like being
the house. if you must buy, buy only when the time
premium is low. conversely only sell when the time premium
is high. I use options to hedge positions and mitigate risk.
I do sell naked options when I have an opinion. my favorite
position is selling naked tesla calls after the stock has had a runup
as it is consistently way overpriced. my second favorite position
is to sell naked puts after a sell off in companies that make money,
pay dividends, and trade at low PE ratios. think apple or gilead
for example. hope this helps.

Are you selling covered calls?
When I bought my first lot of puts a month ago...I got scabbed on my buy in by almost 8% on the premium!
I put a limit on every other transaction from there out.
I also had a case on Monday, where my stop/limit got blown by. I set the limit at the stop, which would normally work in the middle of the day for an equity...but obviously not the options. That needs to be set lower.

Do you have a model, or are you able to run quick scenarios on your platform? I can only trade through Schwab...and they don't want to give me their StreetSmart edge platform...so I'm pretty handcuffed.

I'm not on margin...but I do like the idea of selling calls in general. We do that inhouse at my company.

 

[niltes]

covered calls and naked options. always use a limit order, the market makers will rob you blind otherwise.
I have opinions and use options to make or protect a desired position. you need to have a margin
account and be approved for advanced option trading for anything naked. interactive brokers gets
phenomenal executions (infinitely better than the tdameritrade account I use for another purpose)
and much lower transaction fees.

 

[KingEleven]

sounds complicated or is it like most things in that it sounds more complicated than it is when you are not familiar with it?

 

[niltes]

one can keep option positions simple or complicate them into one giant clusterfuck.

 

[Illini]

naked selling is scary and there is no way of protecting oneself
easily if/when a stock/commodity gaps in the wrong direction.
naked selling is not for those faint of heart or light of
bankroll. but prudent well thought out positions offer sizable
returns and an acceptable risk/reward ratio.

Sure there is. Buy a way OTM option for pennies. Risk of selling naked is unlimited. You can't take unlimited risk ever, that's dumb.

 

[niltes]

if one could not take unlimited risk EVER; then there would not be an option market, PERIOD.
when one buys an option, who offers you unlimited upside? someone or some entity must be
fading every long option position. it's the market maker or people like me willing to absorb
large risk for a generous return. the option market makers are some of the most sophisticated
investors on the planet. they run complex and dynamic algorithms to determine fair value
at any particular moment and usually only complete trades that offer positive equity.
meaning that the other side of the trade gets the worst of it. I respect your opinion
illini, but in this case you are biased and not informed.