Options Trading (2 Viewers)

[Caveman33]

Jumped back in yesterday with a put spread on AMZN 5/6 and put/call spreads on AAPL 5/6.  I closed AMZN early with 250% gain and closed both sides of AAPL with 20% loss.  I considered keeping the AAPL put spread open but I've decided to be more conservative.  When I'm loose, I lose and when I'm tight, I also lose but I guess that's hindsight.  I was too slow and missed a great 0dte opportunity on NVAX.  I entered a limit order for .50 on puts at $50 strike, but the share price started slipping.  My target was $48, it dropped all the way to $45.

I did have 10 calls on TQQQ 5/6 strike $42 execute at .65 while at lunch.  My operating theory is that the market will go up on Monday and also go up after the Fed raises rates $0.50.  But even with a 4% weekly gain in S&P, these calls would still finish OTM.  Might not have been a good purchase, I'll see on Monday.  I'm going to start tracking my performance.  Starting with 5K in purchasing power, my goal is to turn it into 20K by the end of August.

 

[Caveman33]

Yes, TQQQ was a bad decision.  High risk with limited reward.  I think I'll swear off the leveraged ETFs for good.  Sold at .75.  It still may end up ITM if the market goes gangbusters this week but there should be better ways to play that possibility.

1 put spread 400/350 executed on PANW 9/16 at $5.25.  Their earnings may be fine this month but I felt this offered a good return in case of a real recession this summer.  Their customers seem dissatisfied with the tech response time lately but it may be an industry wide issue.  I don't know that they are actually losing customers as a result.

MTCH, BGFV and SBUX have earnings tomorrow.  My limit orders did not execute.  I want to do a 6 month put on MTCH and a May call spread on BGFV.  I'd also like to bet both sides of SBUX 5/13.  So long as they are not reporting before the open, I will have another chance tomorrow.

 

[Caveman33]

10 call spreads 79/81 on SBUX 5/13 at $.34.  I suppose I'm lucky that the put spread did not execute. A positive forecast at the conference call tomorrow plus momentum from the Fed decision may allow me to close for a 300-400% profit.

1 put spread 60/45 on MTCH 12/16 at $3.40.  The CEO announced they will step down but stay in charge of the board.  I believe they will reveal the numbers tomorrow morning.  Looks good for shorts so far.

I did not get in on BGFV.  It moved up too quickly and ER quickly brought it back to its share price from a couple days ago.  It is still heavily shorted with a low market cap.  I wanted to buy ZIM and sell weekly calls but that also moved up too much.  I had a call spread for ABNB 152.5/162.5 but I didn't like that the options were overpriced according to the calculator so I cancelled before it could execute.  CHGG seemed too obvious yesterday.  They snitched on their core customers, of course their business is going to struggle.  But I didn't act.  I swear I'm like 80% on all the moves I don't make.  Frustrating.  For tomorrow, I've looked at RUN, SFM, SRE but my feelings are not strong enough to justify any positions so I will likely just watch what happens with the Fed.

 

[Caveman33]

Just bought 4 puts on NVAX 5/6 strike 55 at $1.00.  Share price is dropping as expected but the puts haven't appreciated much.  I hope to sell 2 for $3.00 within the next 15 min and then let the other 2 ride.

 

[Caveman33]

Added 4 more puts on NVAX 5/6 strike 55 at $0.28.  Also 10 call spreads 79/80 on SBUX 5/6 at $0.22.

This is not going well.  So many missed opportunities and poor decisions.  The fund will likely be printing a loss this week. Still plenty of time to turn this ship around. 

If the up/down theory holds true, the market will be green tomorrow. My extended viewpoint is still bearish.  I believe the bottom is likely 6-12 months and 40-50% away.  I assume that HFT and more active retail traders are causing increased volatility.

It seems like most NVAX holders are looking forward to next week's ER.  I doubt they will be selling tomorrow unless the whole market is down.  I expect the ER to disappoint based on weak European numbers but the forecast might give cause for optimism.  There are many reasons to doubt NVAX but on the positive side they do have a protein based vaccine similar to traditional flu vaccines and I think the covid virus will continue to be passed around for the foreseeable future, barring some new development.  I received two shots a year ago, then got the virus 6 months ago and most likely have it again right now.

SBUX seems to be coming off the ER well.  People are optimistic about their successful growth in China and the return of the original CEO.  But there are worrisome market catalysts next week and SBUX is not immune to going down with the market.  There is a reasonable chance that I whiff on all these options.

 

[Caveman33]

Sold 8 NVAX at $1.45.  Timed that well, the one good decision last week.  +100 TQQQ, +648 NVAX, -220 SBUX, -45 fees= 5,483 settled balance at the end of the week.  I still have SBUX 5/13 call spreads which I would like to hedge with QQQ or SPY puts and the PANW and MTCH put spreads are long term holds.  That leaves about 4,200 in purchasing power.

I need to cut down on fees.  In retrospect, spreads may be justified if a particular strike price is overvalued but I'm usually better off with just calls and puts.  

I plan to start buying Dec puts on USO.  Futures prices are already in backwardation which may be good for USO but I expect prices to go much lower.  OPEC is planning to increase production 432,000 bpd every month until the end of September.  Just as a global recession puts a crimp in demand, many of these countries will be desperate to pump to bring in some revenue.  On the other hand, there is recent talk of a diesel shortage and many analysts are predicting huge prices per barrel of oil.  The oil producing countries will certainly try to avoid over supplying the market but I'd like to bet on prices coming down.

 

[Caveman33]

Things are not going well.  The market had already plummeted when I woke up.  Even crude oil was way down.  I couldn't justify getting into any of my desired positions.  And then I talked myself into going long on NVAX.

Bought 2 calls 9/16 strike $100 at $5.65 and $5.25 and sold 1 call 9/16 strike $115 at $4.20.

As expected, the ER was disappointing.  This company has a terrible history and the insiders already sold their shares when the SP was pumped. Tomorrow looks bad, these calls are likely losing at least 65% of their value, and I'm not sure that I want to buy more.  Based on the $2.50 earnings and the future $40 SP, the current p/e is around 4 and given my belief that covid will require boosters every 6 months for years to come, there is still more potential here.  The FDA is scheduled to meet in June regarding NVAX and I assume they will approve the vaccine, as it has been approved everywhere else and NVAX did receive over $2 billion in warp speed money, the most of any company.  Their vaccine appears to work nearly as well as the mRNA options so it is baffling that the company has bungled the roll-out so spectacularly.  And who knows what happened to the much hyped combo shot with Nanoflu.  The stock will probably rise again but too many people have been burnt in the past for it to benefit from a good pump.

I had a limit order on AXP puts as I was thinking that lenders will likely suffer from future defaults and less borrowing.  It did not execute, but the painful thing to see was the crash of UPST after their poor guidance.  I was only vaguely familiar with the company but now it seems so obvious.  In comparison to SOFI and LendingClub having some credit standards, UPST will lend to nearly anyone.  Might SOFI suffer the same fate tomorrow when they report?  They already chopped their guidance last month and UPST's negative ER has brought SOFI down further.  I doubt that puts on SOFI will be +EV tomorrow.

I also bought 3 calls on SBUX 5/13 strike 77 at $0.40.  Barring a huge bounce from the market, the SBUX calls are trash.  I really need a bounce to psychologically allow me to buy more puts on a variety of things.  Scared money don't make money.  Looks like I'm stuck on the sidelines.  

 

[Caveman33]

NVAX went for a wild ride.  Down 20% and then a steady climb to finish around even.  I'm not sure what to make of that but it is cause for some optimism.  I will definitely sell before the next ER and probably before June 9th, when the FDA meets regarding their EUA.

It looks like the Spelunking Fund will be back to 5K at the end of the week.  I'm not managing it well.  Probably best to step away from the screen and only periodically look for good long term entry points. I wonder if ATVI offers relatively safe value.  Buying shares now has the potential for a 25% return if the acquisition by MSFT closes as scheduled.  The March 2023 calls strike 85 at $3.50 are another intriguing option.  Buffett being involved adds credibility to the deal.

I gambled on volatility in my personal account.  I bought 10 5/20 SPY calls strike 406 at $4.70 and 10 5/20 SPY puts strike 386 at $5.00.  It was quickly up 10% but I'm holding for more and it finished the day even.  QQQ may have been a better choice, I'll review the difference afterwards.  Seeing everyone talking puts and calls on Reddit has me slightly concerned that the rest of the week may be relatively flat with <1% zig zag moves. Everything is "priced in."  But I have plenty of time to worry about that next week.

Ideally, the CPI comes in low tomorrow and the market rallies 3%.  I'll sell the calls for 200% profit and then the PPI on finished goods come in high tomorrow and the market reverses and I'll sell the puts for a small profit. Yes, that sounds good.

 

[Caveman33]

Down 15% now.  Assuming IV remains steady, I need a 2% drop just to break even.  Not looking good.  Such large losses from big tech and yet the S&P only went down 1.6%.  I figure the market will zig zag tomorrow and spend most of the day + or - 1%.  If I hold until next week, I'll be down 50% so I think I should accept the 20-30% loss and roll the remainder into later dated options.  When I bought these options, the IV was around 42% and it's now 34%.  Makes sense since the CPI was an anticipated event for fools like myself.  I almost doubled up on the 5/27 options today.  I was on tilt, of course, but it may have worked out because at that moment 5/27 had an IV of 25% and then quickly jumped up to 33%, in line with the rest. I noticed the put/call combo appreciated by about 10%.  Looking at the SPY option calendar, 6/13 has IV listed at 25% but the actual prices aren't matching.  The calculator finds both 6/10 and 6/13 to have IV around 28-29%.  I need to play around with it some more.  Here's to a bloodbath tomorrow.  Either in the market or my account.

 

[Caveman33]

And there it goes.  I had multiple chances to make a profit.  Execution prices on both calls and puts came close.  It hurts to not be at my computer to make adjustments during the last few hours of trading but that doesn't change the fact that I am not good at this.  The family office is in disarray so I am closing the fund.  Taking a big loss has amplified my bad instincts and I will likely chase it with larger bets until the well runs dry.  Such foolhardiness is not suitable for most people but I think it is appropriate in my situation.  It might take a few days, or minutes, until I identify the right opportunity. 

 

[Caveman33]

Gambled back into the black.  The IV on SPY was 29% yesterday.  In this current market, I think anything below 30% is pretty good. Something is likely to spike the IV up.  I held 60 June 3rd puts overnight which fortunately worked out.  Today, instead of selling my strike 387, I sold strike 385.  I lowered my price from $6.70 to $5.40 because I was nervous.  15 minutes more would have been another 8K. Oh, well.  I also bought 10 June 3rd calls for $5.00.  IV is now at 32%.  

When I was scalping yesterday, 10% was my sell point.  Since this current position is fairly balanced, I will hold and hope to get 25-50% on the calls if SPY can bounce back up to 391-393 today or tomorrow.  The Fed is releasing their minutes from the meeting earlier this month.  I'm still a bear but I believe the Fed is full of doves and all the recent doom and gloom in the media is certainly a contrarian indicator.  I'll probably wait a few days and look for IV below 30 before gambling again.

 

[Caveman33]

My June 3 SPY put spread between 185-187 has severely depreciated.  It is currently valued at $0.  I put in orders for puts and calls today but I set the prices poorly.  The June21 QQQ puts executed immediately at open and are now down 10%.  The calls are moving further out of range.  I'll wait and hope for a dip to balance.

I'm targeting $285 and $330 for QQQ June21.  IV has been decreasing the last few weeks.  It is still historically high but I expect the realized IV to exceed current expected.

 

[Caveman33]

Sold 4 June21 QQQ puts +37% and 10 at +40%.  Bought 40 June21 QQQ calls at $1.24.  

I'm leaving limit orders for 25 June21 strike 285 QQQ puts at $1.25 and 20 June21 strike 435 SPY calls at $0.80

 

[Caveman33]

Bought 20 June21 strike 435 SPY calls at $0.69 and sold 10 at $0.99.  Sold 20 June21 QQQ calls at $1.69.  

Tastyworks has an annoying feature where they randomly change parts of orders when I'm editing and if I am rushing, this leads me to make mistakes.  I fell into a quandary on Wednesday when I was trying to buy calls on DMTK, a company with biopsy vaporware.  Their tech and marketing appear to be garbage and I expect them to continue their descent towards bankruptcy but I liked the possible returns on a quick rise in the junk QQQ sector.  Unfortunately, when I was conducting one of my limit edits, the order changed from buy to sell and immediately executed below the market rate so I ended up selling 35 June17 calls strike 7.50 at $0.12.  It is a very illiquid option and I was likely down ~25% right away.

Yesterday was good since I held more calls than puts but these stupid DMTK options are an anchor.  I should probably just take the loss of around 100%. I cannot risk selling the rest of my calls without first resolving DMTK.  A surge in junk QQQ could see DMTK gain 20% in a few days and then I'm down about 1,000%.  The most frightening scenario would be DMTK announcing that someone is buying the company at their share price from 8 months ago, $30.  My whole account would be wiped out by a $400 misclick.

 

[Caveman33]

Alright, sold the last 10 June21 QQQ $285 puts for $10.  The remainder of my calls are worthless but I got out of that stupid DMTK situation.  IV has jumped significantly.  I think I'll wait until after the upcoming Fed meeting to gamble more.  I also have a flight booked for a new city in a couple weeks.  Probably best to wait until I get settled in a room.

 

[pecorino]

I haven't posted in here a while, mostly been watching the carnage without trying to trade options on top of my long positions. The only options trading I've been doing have been two-fold. One is selling covered calls. I've recently closed all of those positions, thinking that the market could post some pretty aggressive positive moves from here and I don't want to miss out on those. Feels like very meager scraps when your stocks tank but at least you pick up some coin by selling covered calls. I've soured on them, in general, but in a down market they do provide some cash, almost like a bonus dividend.

Mostly over the past several months, I have been buying protective puts which tend to be at-the-money SPY puts for about one month out. Because of the bearish sentiment and big swings in the market, those puts have been expensive and I can't afford to buy with any volume puts that are longer term. The upshot is that (unless you're holding a lot of cash) most of us are long the market. If you want to hedge and protect your holdings, you can invest in puts. If the market goes down, your holdings lose money but the puts gain money and the goal (at least for me) is a wash. I've found it terribly difficult to figure out the right mix of long positions and SPY puts. This is what hedge funds do, and they have infinitely more resources than we do. Plus the puts are really expensive, as I said.

All in all, I have not done well with these trades but figured I'd share my experience. Seems to me that the best way to make this work is to really push in your chips. Meaning, if you're bearish the market, you need to have a big tilt towards puts and much reduced long exposure. I was never comfortable doing that. Those hedge fund guys must have titanium testicles and I admire their guts to tilt their holdings so that they'd benefit from a market like this. Heard Ackman netted billions this year which I do not doubt. The retail trader lacks the wherewithal, the education and probably the gumption to pull it off. GLTA.

 

[KGB]

I haven't posted in here a while, mostly been watching the carnage without trying to trade options on top of my long positions. The only options trading I've been doing have been two-fold. One is selling covered calls. I've recently closed all of those positions, thinking that the market could post some pretty aggressive positive moves from here and I don't want to miss out on those. Feels like very meager scraps when your stocks tank but at least you pick up some coin by selling covered calls. I've soured on them, in general, but in a down market they do provide some cash, almost like a bonus dividend.

Mostly over the past several months, I have been buying protective puts which tend to be at-the-money SPY puts for about one month out. Because of the bearish sentiment and big swings in the market, those puts have been expensive and I can't afford to buy with any volume puts that are longer term. The upshot is that (unless you're holding a lot of cash) most of us are long the market. If you want to hedge and protect your holdings, you can invest in puts. If the market goes down, your holdings lose money but the puts gain money and the goal (at least for me) is a wash. I've found it terribly difficult to figure out the right mix of long positions and SPY puts. This is what hedge funds do, and they have infinitely more resources than we do. Plus the puts are really expensive, as I said.

All in all, I have not done well with these trades but figured I'd share my experience. Seems to me that the best way to make this work is to really push in your chips. Meaning, if you're bearish the market, you need to have a big tilt towards puts and much reduced long exposure. I was never comfortable doing that. Those hedge fund guys must have titanium testicles and I admire their guts to tilt their holdings so that they'd benefit from a market like this. Heard Ackman netted billions this year which I do not doubt. The retail trader lacks the wherewithal, the education and probably the gumption to pull it off. GLTA.

Someday im going to learn more about what you are doing. im afraid id get my *** handed to me if I half *** it

I only have 1 trade going right now and its small potatoes.

CCL call $7.50 june 16th 2023

up 46% so far though!