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Options Trading (1 Viewer)
- Thread starter TripItUp
- Start date
Just peeked at AAPL options for this Friday. They report after close today and have had quite the run-up in the past month (up over 10%) to breakout to new highs. I was surprised at how muted the premiums were. Granted, it is a very short time span of just four days, but you get the earnings catalyst by tomorrow. It is trading around $149 premarket.
I'm looking at options that are about $5 out of the money (or about 3%), calls with $155 strike prices and puts at $144. Those calls are listed at $0.92 and the puts cost the same. As an owner of 200 shares of AAPL, to me it is a no-brainer to buy two puts as downside protection if it's only going to cost me $200. By the same token, with the breakout having happened, I wouldn't mind some exposure to the upside with a couple $155 calls.
My trade will be an uneven AAPL strangle of four $144 puts and two $155 calls for July 30, spending about $550 (each contract costs $0.92).
While I have you, also looking at PINS which reports soon too. For these, I plan to buy two in-the-money PINS calls for September 17th with strike of $60. Those are trading at about $17.50 which represents roughly $15 worth of intrinsic value (since PINS is trading around $75) and only $2.50 worth of time value. If you buy the out-of-the-money calls, you're paying a lot with no intrinsic value so I'm buying fewer contracts (just 2) but in-the-money and so getting some leverage. That is, access to 200 shares for $3500 rather than buying the stock outright for which I'd only own about 45 shares, or a 4x leverage play. Also getting a couple months of time with this one.
I'm looking at options that are about $5 out of the money (or about 3%), calls with $155 strike prices and puts at $144. Those calls are listed at $0.92 and the puts cost the same. As an owner of 200 shares of AAPL, to me it is a no-brainer to buy two puts as downside protection if it's only going to cost me $200. By the same token, with the breakout having happened, I wouldn't mind some exposure to the upside with a couple $155 calls.
My trade will be an uneven AAPL strangle of four $144 puts and two $155 calls for July 30, spending about $550 (each contract costs $0.92).
While I have you, also looking at PINS which reports soon too. For these, I plan to buy two in-the-money PINS calls for September 17th with strike of $60. Those are trading at about $17.50 which represents roughly $15 worth of intrinsic value (since PINS is trading around $75) and only $2.50 worth of time value. If you buy the out-of-the-money calls, you're paying a lot with no intrinsic value so I'm buying fewer contracts (just 2) but in-the-money and so getting some leverage. That is, access to 200 shares for $3500 rather than buying the stock outright for which I'd only own about 45 shares, or a 4x leverage play. Also getting a couple months of time with this one.
Bob Sacamano
Footballguy
I have too much AAPL exposure, so prob won't tail the Call side, but I may have to look at the Puts. Running to earnings, beating, and then sliding seems like the most AAPL thing in the world right now.
I'm not usually one to buy insurance on my holdings, selling covered calls now and then, and never buying puts as protection. So far so good as it's down 2% today and I got four of them for Friday. I still think it can go either way at earnings but the premiums are cheap enough that I'd recommend protecting your AAPL position by buying some puts.
Bob Sacamano
Footballguy
Same. I bought 12 $142s @ $.96. If commons increase $2/sh tomorrow it's a total wash and I'll sell the puts net positive. If it declines, I'm protected.
Sold my puts this morning to recoup all of my principal (on both the calls and the puts) plus a little sugar. I'm shocked to see it drop like that, given the strong numbers from yesterday. So much so that I couldn't help but buy more of the Friday $155 calls for three cents, what the heck.Bob Sacamano said:
Bob Sacamano
Footballguy
I closed out this morning at $1.30. Left a little on the table, but I can live with that. Was happy to see it bounce back later in the day.
Bob Sacamano
Footballguy
I got slammed on these today along with my AMZN call. The biggest down day I have ever had, by several percent. So I bought more PINS calls and one more AMZN call, of course.
KGB
Footballguy
Current options...
Both with earnings coming tomorrow and the next day...
LESL - 08/20 - $25 call - $1000
BABA - 09/03 - $205 call - $13000
LESL - 09/17 - $30 call - $6000
LESL - 09/17 - $35 call $2300
BABA - 01/21/22 leap - $215 call - $4000
BABA - 06/17/22 leap - $250 call $3700
Both with earnings coming tomorrow and the next day...
LESL - 08/20 - $25 call - $1000
BABA - 09/03 - $205 call - $13000
LESL - 09/17 - $30 call - $6000
LESL - 09/17 - $35 call $2300
BABA - 01/21/22 leap - $215 call - $4000
BABA - 06/17/22 leap - $250 call $3700
Those are some big boy trades. I already owned some BABA calls so not getting any deeper into those, although they are on sale today. I don't like the LESL calls that are only six weeks out and with a strike price of $30 or $35. Those are too far out of the money and too soon expiry for my blood. But I did tail your LESL 8/20 $25 calls (which for some reason is your lightest position). Bought them at $1.40 this morning. Good luck.
KGB
Footballguy
KGB
Footballguy
Bossman
Footballguy
FBRX is paying very well for both puts AND calls....
September 7th is a key date that sends this to the moon or into the toilet.
There must be a way to take advantage by playing both sides ... where both sides are paying so well.
I sold $15 and $17.50 Sept Puts. Paid me very nicely.
stock is trading around $28 today
How can I get some of that call money?
September 7th is a key date that sends this to the moon or into the toilet.
There must be a way to take advantage by playing both sides ... where both sides are paying so well.
I sold $15 and $17.50 Sept Puts. Paid me very nicely.
stock is trading around $28 today
How can I get some of that call money?
Rattle and Hum
Footballguy
Am I seeing this right, an expected move of $19 on a now, $27.32 stock? That is 323% IV, lol. Good luck.
Bossman
Footballguy
Exactly.
Which is why the options are paying so well.
There is a lot of money to be made here ... One way or the other.
Sand
Footballguy
Realized variance is historically less than IV, so on the odds this could be a good moneymaker. But that is an eyewatering amount of variance and I suspect the statistical long term is many, many bets.
This is really an incredible find. I know nothing about the company but I see a share price that has not been below $23 for a full year. I understand that 9/7 is a major event and this thing could go south immediately thereafter, but to pay a premium of $3.70 on the September $15 puts is out of this world. Since I have not done due diligence (and I'm quite busy), I sold two puts just to net some premium and black dot it. Thanks for the heads up.
To claim some call-side premium, you could 1) buy 100 shares and sell a covered call (a moderately bullish position) or 2) sell a call credit spread (a bearish position). You do that by selling a lower strike call, say the September $30 calls for $9.30 and buy ones that are further out of the money, like the $40 calls for $6.50. Nets you $2.80 but you're risking $1000 if the thing shoots up. Granted, if it shoots up, the puts you sold will expire worthless netting you a lot of profit but probably not enough to offset this loss. Seems to me that you need to pick a side (bullish or bearish), and if you're gonna sell options to collect premium, selling puts will place you in the bull camp while selling calls will make you a bear unless you own the underlying shares.
Bossman
Footballguy
I'm surprised that the put prices are holding steady dispite the stock price going up .... and a week closer to strike date.
Id like to sell more ... But it's hard to be confident when the put prices are so juicy. That said, might sell more Monday if I'm not shorting meme stonks.
It doesn't matter if it goes up 10% or down 10% between now and September (unless the vibe is that news leaks). All of this premium is baked into the 9/7 event.
Rattle and Hum
Footballguy
Expected move was $5.30 or $51.90 . Interesting how accurate those values were thus far but I do not know its overnight low tick. Good luck, Bossman.
FreeBaGeL
Footballguy
Caveman33
Footballguy
Yesterday I bought Nov 12 $32 puts on BLNK which have been up 100-200% today. Maybe I should hedge by selling some $30 puts but I still think this has 10-15x potential. BLNK is a sham EV company with poor technology so they almost certainly won't receive anything from the infrastructure bill. Bad earnings on Thursday could quickly send them back down to $25-28. True value is probably $1/share at best.
JerseyToughGuys
Tough Guy
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Caveman33
Footballguy
I was a little off. Calls are looking great, 5-10x. I should have played both. I want to restrict myself until I get a WeBull account funded. I'd like to play futher OTM lottery tickets and don't like it when fees account for a sizeable percentage. WeBull may hide their fees by giving a worse execution price, though.
Rattle and Hum
Footballguy
Tastyworks is quite palatable with free closing commissions. Charts stink though. HMU if you ever want to compare spreads to make sure WeBull is not spreading too wide.
Desert_Power
Footballguy
Worth mentioning that Tastyworks has a $500 bonus when you deposit $10k going right now. I signed up this week.Rattle and Hum said:
Caveman33
Footballguy
Caveman33
Footballguy
What options are you guys currently trading? I have to take a break until next week while I wait for funds to transfer. I do want to pursue more calls rather than puts in the future but Peloton sure looks like a juicy put opportunity. They announced plans for $1B dilution and share price jumped up 15%. Seems crazy but at 54.85, it's still short of the 58 that it initially fell to after the bad ER. I expect some moves between 48-58 over the next few days. I like to watch the action and set limit prices. If the stock moves up at the open and seems to hold above 55, the 54 or 54.50 Nov19 puts may get to around a $1 and will likely offer at least a 100% return within a couple hours on a dip. A lot of what ifs and conjecture behind my thoughts.
Desert_Power
Footballguy
PTON took it again today, but I think it is a great option for selling a put.Caveman33 said:
Caveman33
Footballguy
You want to sell a put? So you would be forced to purchase the stock if it continues to decline? I don't know, I thought the unusual bounce after announcing dilution presented a good opportunity to buy a put. Long term, I have no clue what to expect from PTON.
I'm generally bearish but that mentality mostly caused me to miss out on 5 amazing years. I really failed to appreciate how juiced and essentially rigged the market has become by the FED policies. I don't think there is any reason for that to change but the Evergrande situation could develop into something interesting next year.
INTC seems like a relatively safe bet but the call options are substantially overpriced according to the option calculator. So I may just park the bulk of my money in shares. I will feel like a fool if I end up riding a downturn after sitting out the past 5 years so I want to limit the downside.
Caveman33
Footballguy
I played a 0DTE spread on NVAX bought 170 put and sold 167.5 put for .47. I'd like to sell half at 1.47 and the spread reached above that but my order did not execute. I assume this is not specific to tastyworks, executing spreads with the best possible price appears more challenging.
Caveman33
Footballguy
Alright, let's get back in the game. I was smoking MJ and incurring losses while high. (Calls on PLBY, wtf was that?) Now I'm detoxed, ready to go and off to a bad start. I entered a put spread on QQQ 4/20, sold 341 and bought 342. Had a limit order for .22 but when I needed to edit the number of shares, tastyworks reverted it back to market. I didn't review and it instantly executed at .28. Oh, well.
Al Czervik
Not wearing pants
Been learning and refining my chart reading and technical analysis over the past year. Initially started by day trading momentum plays on small caps and have moved to day trading options. Only play a handful of large cap weeklys with 1-3 dte (staying away from 0dte for now).
Caveman33
Footballguy
I like to gamble so options are fun. I don't trust the broker execution prices, though. I recommend using limit orders but I think they still skim profits on the arbitrage whereas regular shares of stock are executed fairly. Puts on NFLX was a money play this week. It looks like their earnings stumble will help my QQQ put spread turn into a double tomorrow. I'm not so sure I would bet against TSLA tomorrow.
Caveman33
Footballguy
I bailed on the QQQ put spread at .44. The trade midpoint was flipping between .47 and .48 when it executed. Just another example of the screw job these brokers pull on execution price. All around it was a bad trade by me so I should be happy with a small profit. Now I'm trying to put that into TSLA 4/22 put and call spreads. I figure a 10% move after earnings is likely so I'm going with 1045/1050 for the call and 900/895 for the put. Set my limit order at 1.75 but will probably have to bump it to 1.95 to get execution. Max profit on either side is 5.00 though 2.50 seems more reasonable if the share price moves close to either end so I think this is a profitable play.
Caveman33
Footballguy
The TSLA iron condor executed at 1.85 but I had to change the call spread to 1050/1055. Seeing the after hours action move between 1020-1040 isn't great. Hopefully the market is green tomorrow and I may be able to secure a 50% profit or look to at least break even.
CVNA looks like a good opportunity. I wanted to short/put this 5 months ago when it was 300+ but I never got my timing right. Today it went into earnings at 92.50, had a huge loss exceeding the already large expected loss and they announced plans to dilute. Somehow the mention of dilution sent the share price climbing. If I remember correctly, the CEO is crooked, the company is loaded with debt and they can't turn a profit in an amazing used car market. If it's still green tomorrow morning, I will look to buy some puts.
CVNA looks like a good opportunity. I wanted to short/put this 5 months ago when it was 300+ but I never got my timing right. Today it went into earnings at 92.50, had a huge loss exceeding the already large expected loss and they announced plans to dilute. Somehow the mention of dilution sent the share price climbing. If I remember correctly, the CEO is crooked, the company is loaded with debt and they can't turn a profit in an amazing used car market. If it's still green tomorrow morning, I will look to buy some puts.
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