Hi all; I just opened some new positions that seem safe.
I did a put spread on AAPL. AAPL trading at 382.3
I bought to open the 9/9--360
I sold to open the 9/9--365 for .11
that gives over 17 pt cush, with more or less 2 days to go. A ROI of +2%
I also did the same type spread with V, trading around 87.5
I bought to open the 9/9--80
I sold to open the 9/9--82.5 these were done for a credit of .05 = ROI of 2%
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There seems to be some good late week trades out there.
108 comments:
MA and WLT went crazy. AMZN almost neutral all morning, ready to take off?
Results for Month of August
Week 1 - SPX put spread 1165/1160 -1.2% After commissions
Week 2 - SPX put spread 965/960 - 1.2% After commissions
Week 3 - SPX put spread 1130/1125 -2% After commissions
Week 4 - AAPL put spread 360/355 - 1.4% After commissions
Total Return After Commissions = 5.8%
@ Fulgore - Good stuff!
Assuming this week works (i think it will)
For me it look slike it will be a 12 weeks now at approx 0.75% per week (3% a month) using SPX with a cushion of usually 10% from Monday Open.
rhmoptions
@Patrick, Can you send me an email. I have some questions about IB platform.
Sorry Patrick - fulgore1234@hotmail.com
Congratulation! Fulgore and rhmoptions, good job :)
Thanks Hannah. The post is just to show what is possible with a crumb method.
for RHM and Fulgore...can u guys tell us how many contracts were you trading thanks
I've been selling naked puts on PCLN, AAPL, AMZN, GOOG, NFLX, & BIDU for an average of 0.75 % a week as well. I usually try to get premiums between 0.4 and 0.95 for each contract.
@doctorali
Right now only 5-10 typically. I want to run this thru June to end of Nov , modify adjust to see it "works" thru many different markets then slowly expand my contract number
Regards
Rhmoptions
@doctorali
I am using 15 contracts right now. There are a couple of reasons i have explained in some older posts. Basically I don't have tons of capital right now and also because of the $5 spread that is used.
fulgore and rhm thanks for replying.The reason i was asking because once u go to 100 and higher contracts, getting filled up so deep out of money on monday and tuesday might be a problem.
@doctorali
Yes. In a normal market The spreads I typically get at 10% away are usually 25pts (2500 per spread), the 5pt spreads dissappear as u get far otm.
100 contracts (250,000 in maintenance) is a way off for me but yes i agree.
I have done 20 contracts twice and the fills were OK.
Rhm
@doctorali,
Thanks for the comment, I have considered this and will take positions above / below my target strike to even out the contract.
This AND also I will diversify my investments to other index / stocks.
I was checking TOS and this time all strikes for SPX September are listed in increments of 5. I see volume on strikes even as far away as 750. Not sure how to pick correct strikes that are being actively traded today. Anyone has this problem? I wish they provide a last sale timestamp as an additional column so that we know that strike is being traded.
Fulgore, and RHM too, good going on the SPX! I too have had these SPX crumbs (120-150 pts cushion) of 2% ROI a week, especially with this volatility.
Fulgore, I see you've been getting 4% ROI the past few weeks...Nice!
It is definitely better if you can get to the $25 spreads between each strike price as apposed to the $5 spreads, and still get your target ROI, as you will need less contracts and therefore incur 5 times less in commissions!
Keep safe crumb traders!
25 points between strikes is a big spread. I agree that you can lock in higher $ return but the ROI % may be lower since you need so much more maint and your risk of loss is that much greater. But, clearly it's working for you.
Hi all,
I've been trading so little lately, I have not had much to offer.
Re contracts - before my 7/1 meltdown, I had no trouble getting 200-400 contracts filled at OH. I did NOT use AON. I only used $5 spreads. Sometimes the fill would take 2-3 partial fills.
I'm still selling(very few)credit spreads on AAPL and GOOG. I'm so glad I got out of the calendar spreads. The time and price losses killed me (again). It looks like AAPL is gonna open down another $6 this morning. Geez!!
Be careful out there!!
rick
@Bald - Glad to see you back. AAPL should still outperform most equities during this downturn, which won't last forever. (I hope)
@All, I took the vertical put spread 1020/1015 today for .15. I am angry for a couple of reasons.
1. It got filled right away. This tells me I could have gotten .20. Note to self always up your premium to the next amount. If it doesn't fill then bring it back down.
2. Is 128 points of cushion till Thursday night good enough? and will it last until Friday AM??
I will keep a close eye on this. If by Thursday night I am within 40 points of my strike price I WILL close this position no matter what, no questions asked! (you have to be firm with yourself).
We all know that the SPX can move 40 points overnight no problem on some bad world news. I will not have my portfolio threatened by anything and will close this within 40 points. My assumption is the market will be up and down 200-300 (the DJI) this week but will level off to where it closes today (Monday)by Friday.
-Obama has already spoke.
-Europe is all over the place and this is bringing down the market. Do I think Europe will drop the US market 100 points on the S&P this week, doubtful (but still weary)
-Will congress pass /reject the job bill this week? I think they just might. If it passes I don't think the market will react in a positive manner too much. If it doesn't pass, we drop down. How much? Well if we knew that we would be rich now wouldn't we?
Anyways all I know is I will be watching my position closely as always and if I feel threated I get out, simple as that.
Good trades this week all. Keep the greed to a minimum!
@All, Addon to my above comment.
I just checked my financial transactions on my ToS platform, they did give me the .20 NICE! I love ToS sometimes! But comms hurt, I hope IB does this!! or I hope at that time I will be smart enough to up my premium :)
@All wow down 230 on the DOW and about 22 on the SPX today on open. Down and up all day today. The end of the day had a HUGE ralley !!!!!! wow. SPY closing up 8 points and DOW closing up 70.
Good for me for my position :)
@Fulgore
Yup fun day. I opened up a 985/970 spread for 0.20. Its a relatively conservative play but a 15% drop is not likely even if greece hits the skids. 177 pt cushion 3 + (overnight) days should be ok. Yours look okay too.
cheers
RHMoptions
Another waiting game..'til later in the week for me. With this market anything could happen within a couple of days, it seems. Have learned to be patient and limit the number of days of exposure. Sold AAPL calls expire this Fri with nice premiums. Hope to reestablish next week to keep nibbling away at the basis of the underlyjng bots.
fslr close to the bottom? Sold 75 put for 24 cents. Have some spx 950/925 for 25 cents last week.
@Jerry Looking to roll Sold Sept 17 AAPL 390 Calls sold against Jan longs. Right now there are attractive premiums for Oct 22 expiration but those expire after earnings report on Oct 18. Do we want to sell calls thru this next declaration? Or is it better to wait 'til the new weeklys tomorrow? Probably won't do anything til all the time value is wrung out of the sold calls on Fri afternoon anyway but just trying to figure out which way to jump next.
Hi Safe, I have gone back and forth on this same problem. Often I find when reviewing my records that all too often I have taken the next week at a small premium, with the thought that I can sell several times and ride the 'run-up. I have found that 90% or more of the time I would have been better off to just take the next month premium. So that said, if i were you I would, as you said let the time factor leak out as much as possible and then jump to Oct. I have done that will all of my Calendar call-spreads.
Yesterday i opened some Jan 2013--380 /and sold this Oct 385. The paln being that witha 5 pt separation i will always have those 5 pts in the bank. To open that it cost around 67 to buy the long calls and i sold the oct for 16. For a debit of around 51. But i can sell aapl calls for the next 15 months or 60 weekly’s.
Hope that helps
Jerry
Very much...thanks. This is my first time thru this thicket.
Today I opened 60 of the aapl 365/370 vert put spreads for this Friday. I got .07 for a net of around 1.3% for a two day trade.
Safe; I didn't mention that I have started using a new guideline of when to roll up when going to the next week. I will try to let the stock get around 20 pt above the strike that i am currently using and then jump up 5 pts when rolling out. If you let the stock get away from you in price, the delta etc. starts limiting the 'time' premium. It is just a guideline but it seems to be working with aapl so far.
You are correct that this week I expect big things for AAPL but I am not going to turn down 19pt per option, especially when I have around 100 of them. Good luck with your decision.
One thing I've noticed with long calls is that the time decay can be deceiving. Instead of buying Jan 2013 at 380 with a delta of .60 you can buy the Jan 2012 335 at the same price with a delta of 0.78. Rolling every two months or so my experience is that the time decay in dollar is very similar compared to the LEAP.
But there are two advantages with the shorter term one, first you are deeper in the money so it is easier to roll out and up and if the stock goes down you can keep selling calls longer, all the way to 340. Second, the higher delta means you benefit from 78% of the increase instead of 60%.
Trying out the diagonals again.
I have opened a long call for CAT at 70 expiring Feb 2012 costing approx 1950. I have sold a Sep3 weekly 87.5 for 50.
@Nic Good points. I wonder if these advantages are somewhat offset by the closer expiration of the long, ie time value begins to erode more quickly and sooner? Just trying to think this thru. Thanks.
@All my SPX vertical put spread 1020/1015 looks good right now. SPX trading around 1200. This gives me a 180 point cushion for 1.5 days of trading. This is pretty much a sealed deal (don't wanna jix it though).
Now at this point some people would close this position and open another for more profit. This is a consideration but with my current comms I pay IT IS NOT. Once I switch brokers I may look at this more closely (rolling up). But as Jerry says 90+% of all his losses come from rolling up.
Good trading all
Safe, the odd thing is that the time decay sets in more noticeably in the last 60 days and heavily in the last 30 days, but before that I really can't see much of a difference in decay between one that is 3 months out and one that is 2 years. In my tests the leaps actually dropped more in absolute dollars, although it was less percentage wise.
If using options as a substitute for the stock it is crucial to keep an eye on the delta, as the difference between 0.80 and 0.60 is $2 on a $10 increase in the share. Time decay will eat about $3.50 every month, so if you take a stock like AAPL that the last couple of years have gone up about $10 bucks a month you will only see about half of that increase if you use options, and that is if you're deep in the money with a delta around .80, otherwise even less.
As you can see, selling calls against this when you're expecting AAPL to go up is contra productive as you will just end up negating the value increase in your long with your now in the money short.
anyone have nflx puts? Not me.....phewww. Down to 170! I'm staying away.....far away. Riding aapl now. Straight up long calls. Have not sold against yet. Considering 400's now. RK
Thanks Nic, what you say makes a great deal of sense. I'll look into it further myself tho I already own some AAPL leaps into 2013. Maybe I'll run a couple of trades side by side and watch closely. Of course as they say, 'past performance is no indication of future results.' or something like that.
Nic,
I have been following your cal spread analysis with great interest. My experience has always been bad with cal's. Decay and price drop derailed all my attempts. However, my longs were usually only 6-9mths out. I didn't have the capital for enuf contracts to make it meaningful with 2yr leaps.
My thoughts are cals, like naked puts, can offer diversity with short term wins...but in the LONG term, you cannot beat the vert spreads for safety, ROI, and likelihood of weekly income, week after week after week.
...my 2 cents... probably worth much less!!
rick
Rick,
My experience with weekliy spreads have quite honestly been terrible. Even though there have been many weeks when everything has been smooth sailing, I've had several close encounters and one or two almost disasters. From where I look, there just isn't enough cushion to handle anything unexpected, and we all know it happens. Once you realize that it's getting to tight it is usually too late, and you're either looking at a loss that wipes out months or even years of crumbs, or you try to roll or sell one leg or other emergency action that borders to pure gambling. I know there are folks that are doing just fine, such as Fulgore and Jerry, but in Fulgore's case the difference may be that he is trading in smaller volumes that are easier to get filled further out, and with Jerry I just don't know, but he probably has a gut feeling for the game after 13 years that I simply don't.
I went from pure stock trading to options about a year ago after reading about Jerry's 'crumbs' method over at TradeKing and was fascinated, and for a long time that served me well although I got a scare now and then. Please don't take this the wrong way Jerry, and we're all adults making adult decisions, but the preaching in those days were far away from today's fast weeklies and calendar spreads. I think some of those early followers assumed these new opportunities would be reasonably safe in a similar way, but some of us got a rude awakening.
Anyway, the reason I do find calendars/diagonals interesting is that I'm actually trying to get away from the weekly spreads, and find something that more relates to mid or longterm investing. I want to use options as a substitute for stocks, since I can obviously buy more of the options. My bet is that Apple will be a good stock to buy and hold for yet another year, but the leverage with options is better. My analysis has really been focused on the best way to get options to behave as close to stocks as possible, which unfortunately requires a focus on delta, and obviously time decay.
Those 6-9 months calls you lost money on, did you sell them? What is of interest is what they would be worth if you still had them. I really don't see these as diagonals, I see them as long term holdings of options, but instead of leaps I buy shorter term 2-3 months out that I continuously roll. I then sell weeklies against them when it makes sense, and never when I expect a run up.
It actually seems to be working.
I like 'em both but I find the weekly spreads a little adrenaline filled for my tastes. That said, I seem to look late week to 'spend' any maintenance available for a quick crumb or two if available. Invariably one of these starts looking iffy somewhere along the line and I bale out early at a loss or hang on with white knuckles. So I must like the gamble but I really need to discipline myself to not do this. Halfway thru my first calendar LEAP and so far so good. Seems less stressful and perhaps more profitable. I even sold some calls below my strike using maintenance when AAPL dropped several weeks ago to good effect. Jury still out for me on this. All accounts up somewhat in the 3 mos I've been involved with these spreads. Previous experience just bot puts when the market went to heck in '08. Made a little then but gave back most when market stopped going down. I am seeking a method for consistent appreciation over the long haul.
Official SPX settlement price for September monthlies: 1216.74
I sold 1110 SPX puts for .10 after market close yesterday...just for an overnight trade. They finished 116 points OTM. What happens the rest of the day does not matter. I kind of like that AM settlement thing.
Roadking2 - yes, I owned some NFLX puts and it was not a pleasant thing to wake up yesterday and see NFLX down 28 points in pre-market trading.
@DaveG---How do you sell after the market closes? Just wondering.
safensimple: Options on the SPX will trade for an additional 15 minutes after the market closes. I have been filled several times on limit orders that have sat in queue all day only to be finally filled after the market closes (during that additional 15 minutes of trading time). You can get some pretty good fills sometimes in that AMC action as the spreads will widen and fluctuate very quickly at times.
DaveG, thanks, I'll try it some week. I like the overnight idea. I assume this is only on monthlies?
safensimple, the AM settlement is unique to the monthlies. You have to remember, once you enter a monthly SPX option trade in this fashion (AMC Thursday), you're totally at the mercy of the market. Because of the AM settlement, you cannot make adjustments to the trade. In the trade I just did, I gave myself ~100 points of cushion. The question you have to ask yourself is, do you think the market is going to open down 100 points the next day (Friday). It's possible, yes, but very unlikely, especially the way the market is trading this week where it seems that no matter what, it's going higher. This is the first time I've made an SPX trade this way (open a short position in AMC trading the day before an AM settlement). I may do this same type of trade next week on the weeklys (that expire PM), if I can get 100 points of cushion on a .10 premium and the markets are bullish or not overtly bearish.
hi dave did u do spreads or just sold puts and how many contracts got filled
thanks
doctorali, the trade I'm talking about is selling naked puts (not a spread trade). There is virtually no chance of getting a fill of .10 or even .05 on a spread trade 100 points out AMC on Thursday before an AM settlement the next morning. Even on the weeklys or quarterlys (which expire PM the next day), I don't think it's possible. Hell, if it was possible and one could get even a .05 fill, I would be "backing up the truck" and putting on as many of those as I could get filled. You bring up an interesting point though. I never thought of doing that (a spread trade). Next week Thursday, if the conditions are right and I do the .10 naked put trade, I'm also going to try to get filled on a spread trade 100 points out @ .05 premium (but again, I don't think it's going to fill). As far as the number of contracts I did, it was 5. I mean, where else can you get paid $50 overnight for doing absolutely nothing. Total amount of actual exposure to the normal, trading market hours for that trade was zero (in AMC Thursday and out on virtually the opening bell Friday). I'm no "Warren Buffet", so I appreciate every little crumb income I make in all my various crumb trades.
STO aapl 425 calls at close today (Friday) for next week. Did not fill my entire order but I'll take it. Have a feeling that the 370/365 puts will be something I will look at closely as well.
nflx and rimm players are moving into aapl now? Not playing with these names at all. Too much of a gamble IMO.
RK
Did a 170/175 Call spread on NTFX this AM for .15 around 9am. With the current buzz and market moving with me I was pretty comfortable that stock would not rally 10-15 in the remaining open hours. Didn't seem too speculative to me. I kinda like the Friday trade because you have a good vantage of the market for that day and very limited exposure.
Pqcific Daylite Time so 5 hour exposure.
@Nic
So the skeptic became the true believer eh? I totally hear you as far as the unwanted adrenaline rushes of the weekly vert.spreads go. I did fairly well with those all in all but it always comes back to the risk/reward ratio for me and it is very difficult to countenance now the prospect of risking thousands for a gain of hundreds.
What sunk me was my stupid monthly auto-traded index-based spreads plus a couple of very unfortunate plays right ahead of the August niff-naw. And then I had a chance to recoup a good deal of those losses, but I sabotaged myself by selling extremely ill-timed monthlies. All in all I am still up and rebuilding here. Despite all I am still well in favor of calendars/diags and I completely agree with what you say about seeing this whole thing as a good replacement for long-term investing.
Oddly enough I have done the best with SLV over the last few months. I've probably just been lucky but it has been very consistently bouncing between the high 30s and the low 40s for some time now.
@Jerry You obviously have a different take on this calendar spread strategy. From the education platforms like at TK they suggest that it is appropriate for a pretty level market, not for an explosive up or down. This seems to be the consensus for cal spreads but they are talking about maybe one month out. Is the advantage of using the LEAPs that you can just recoup your original cost over time because you've got so much time? By the way I rolled my AAPL'shorts' using the monthlys up and out to Oct 22 for nice premiums but now I'm concerned about how to get out if AAPL skies.
One year Crumb Method Anniversary!!
Best to you all.
What was your roi for the ltm Hannah?
Hi Phil,
ROI for ITM? I don't do in the money. Occasionally I may long a few puts or calls atm.
It varies with otm puts/calls/spread.
Using SPX, 0.5 to 2% per round of transaction. Lately I usually go for 1025 or under 1000, from 4 days to 10 days or just sitting idle doing nothing - to alleviate the pain of not trading, I did some more creative (lol)paper trades or study??
I find naked put has better ROI going further out with more cushion, if you get it right. But divided by time is about the same roughly. I am not one to go petty detail about ROI -- as long as I am above water and breathing. Last month it was about 4%ROI but I kept more than 50% cash.
Being super conservative after three major draw-downs in Feb, April and May, I am up a humble 11% year to date.
thanks...i meant for the Last twelve months, but you still answered my questioned. 11% beats the broader market so nice work!
Thanks Phil, hope you did well too.
Happy for those who hold AAPL :) and CMG.
Congratulations Hannah. Good work! Holding AAPL in calendar spreads so most of the good is very diluted as deltas seem quite similar. Luckily bot one back this AM because the delta was upside down, with the short loosing more than the long was gaining. So going naked on 100 shares looked pretty good for one day. altho I'll probably wish I'd rolled it instead. Still trying to grapple with this delta thing in the calendars.
@Safensimple
Thanks.
I have been kind of looking at different angles at this calender diagonal stuff; like you said - kind of hard to sell short at right time/price. Right now, you should at least breakeven or have some profit after such run? Wondering if I get some calls with delta=1 and wait for capital gain, then sell at the say $20-30 higher strike with about same cost that I paid. Then I got the calls for free (ideally)...Big dream lol
Right now, many are calling for selling aapl naked put at 365 and below. The volatility is increasing as the earning is drawing near. But earning report is before Oct expiration, which I don't favor. Yet another leg down?
@Hannah Yes as long as the deltas (and the stars) are aligned ie short moving slightly less than the the long, all is ok tho its hard to see the advantage when the stock is appreciating so fast. I don't think AAPL is slated for another leg down but then we are not supposed to be prognosticating in this game, just covering our bets. So what to do? I don't really know so I'm trying several different things, hoping they all work out. A fools bet perhaps?
aapl simply ripping higher. Oh what a difference from just a month ago. Not even sure how to play. I think at 445 or so.....I'll take some off. I took a big risk and it paid off huge. I had half my capital in the jan380's and jan400's. still holding on to 425 weekly sold calls. thought about bailing out though. for now...I'm waiting. There must be some upward resistance somewhere?
RK
@ Roadking I've got some AAPL365's uncovered and one 395 uncovered. They are doing wonderfully yesterday and today. My covered calendars are another story, with very similar deltas, the gains are miniscule. Might 'uncover some more this pm or tomorrow (ie buy back the sold calls). Coming into earnings on the 18th Oct. so maybe this runup will continue for awhile. 445-465?
@All,
I took the 1120/1115 SPX put spread today for .10.
This gives me 80 points of cushion for 3 days.
VIX was below 30 during the trade and just spiked above by the end of the day.
Will keep an eye on it.
After hours SPX down 1.00 not bad
I would like to make a suggestion.
IV for LNKD is incredible, but the stock is acting fairly normal at this point. VEGA is high, and the option prices are incredibly high for such a cheap stock. You can get 4.00 for a fairly out of the money call.
I've been selling puts/calls in papermoney on TOS. Using LNKD, I have made 40% my starting capital (100k) in less than 2 weeks.
APPL isn't that good of a choice because it costs farm too much bp to sell an option, you aren't maximizing your return.
anon,
you are selling the monthlys on LNKD right? WAY too much time for me. Anything that is thirty days away has you pinned.....at least for me anyway. Different strokes for different folks.
With AAPL you can be sure of a few things. 1. high liquidity, so if you want to buy or sell...bang..its done.
2. weekly opportunity to sell calls and puts. keep lowering your cost basis. RK
also, LNKD might seem calm right now, but that stock can really whip around. Selling options naked in the name is asking to go BK. just remember these words when the stock gaps.
I found that its important to close your position often. Its ok to buy a monthly..but if you make a solid profit, close out.
For example, I had 5 calls sold at 4.5 each in LNKD for 90.25. Over 2 days, the thing dropped heavily. I made 50% of my premium as the price dropped down to 2.25ish. I sold, and bought back in for the 90 call, and invested my profits and sold 6 calls for 3.6 each.
I got lucky, and it dropped again, and I made another 50% of my premium and cashed out.
Anybody else wondering what's happened to our fearless leader? Hope all is well in 'Jerry's world'.
anon,
so what is your strategy if a position goes against you? take the loss...wait it out?
@safe
Jerry is probably relaxing on the beach with a few adult beverages.
I would take a quick loss based on an educated decision as to whats going to happen with it.
One of the benefits of playing the monthly's is that you have a lot of time and time decay is seriously on your side.
The only way a stock will really destroy you is if news is released. If you see something comes out that is really going to adjust stock price against you, get out and sell the other side, imo.
Dont get me wrong, Weeklies are good for APPL and GOOG. But LNKD is workin.
FOAC announcement - investors didn't like it. SPY sharply down.
I don't think it will be for long. I think it will fill this valley by the end of the week. But we will see.
Keep an eye on your positions!
@anon, choose whatever works for you. That is the best style of trading. The only opponent you have is your own greed. Concour that and you will be with very few option traders.
Fulgore, for what it is worth, my charts show that the monthlys on SPy/SPX have turned negative, very much like 1994, 2000, and early 2008. I would be very cautious as the fundamentals of the market are poor and there is lots of potential negative news coming (Europe, banks, earnings, retail, Crude, Obama, Super committee, etc.).
Hi JL, thanks for the heads up. Seems the message was positive from FOAC but not enough and the markets took a big hit.
SPX down 35 points and another 5 after hours. SPX running at about 1160. I have 40 points of cushion till the end of the week. I don't like this much so depending on how tomorrow goes I may close my position. If the market is up as we have seen in the past few weeks there will most likely be a sell off at 3pm. If so this would be ok with me BUT if the market is down before 3pm this would be a big sign for me to get out. I will keep a close eye on it.
SPX down $4 after market hrs (10:20 pm EST).
There is a huge support level at 1160. If this breaks tomorrow Fulgore will be out for sure.
She's A tankin!!
SPX down 29 points pre market.
Not looking good. I will be out of my position when possible today.
@Fulgore Hope you got out safely...
Picked up a 430/435 AAPL call spread at .15 this AM which surprised me. ROI=2.5%
I'm out. Loss of course, but better than a full porfolio hit.
Loss sets me back about 1.5 to 2 months. You will have these.
Learn from them. Check the economic schedule. If any announcements like yesterday is coming up use a stock like AAPL for that week.
Its just money and its the learning experience that will make you wealthy.
I'm still new at this compared to many other people on this blog and so I need some battle wounds ! HA.
We will take a look at it again next week !
Hello everybody my name is Pascal I'm from the Netherlands (EU). I just read the book that Jerry wrote about selling putt options and have to say it looks like it can be really profitable so I'm going to give it a try. I also saw that he wrote about this blog so i started reading and I see that there are a lot of nice people being serious about options so i thought why not join! By the Way, English is not my first language so please forgive me if I make a lot of mistakes in my writing. Right now I sold puts on the AEX and on Linde AG expiration October 21 which should make about 6.5% profit and give me about 26% off cushion. If you have any questions on a Dutch/European perspective. Feel free to ask.
Welcome Pascal!
Don't worry about your English, spelling, etc...
Looks like you're doing OK with it.
Best of luck with your trades.
All I fear that Jerry may have taken a very large hit from NFLX's plummet. That stock was one of his favorites and the recent moves would have wreaked havoc on anyone selling naked or put spreads.
Fulgore - If I may ask, what price did you close the spread for? About 60 cents or so in the morning?
I just checked now and 1120/1115 is around 2 dollars.
Good luck to you in the future.
Very painful market for put credit seller like us. We earn for many weeks for small profit, and we return all the profit on one day like this. Hang in there!
number 1 rule....PROTECT yourself. Nas down 102! Everything is selling off. Reminds me of 2008. There is no place to hide....like you are stranded in the desert with a thunderstorm striking bolts of lightning all around you.
You must know how much your are willing to risk....set your mark and get out! DO IT...don't think "ah...this will turn" It could get much worse....MUCH worse.
Call spreads are where to hide....at least for now. Anybody ever heard of a runaway bull market? Especially if one keeps the expirations near. Thurs/Fri only for me right now. Good advice Roadking. If you feel any anxiety about a position close it NOW!
@ All my spread closed at .70 around. I wanted .60 but it started running away from me.
My 1080/1065 spread I put on Monday still looks okay. Wild week
Rhmoptions
Fulgore,
.70 is not too bad. I had one explode on me to over 2.00 one time. Only took one hour and bam..my trade was getting crushed. The numbers start getting real out of hand. Don't look back.....move on and play again. A loss is a loss and we all have to deal with them.
@rihmoptions How much did you get for your spread and what is it worth today? Hopefully we won't see a continuation tomorrow. Nike reported AH and is up 4+. During the month of Aug the market snapped back a bit after a huge down day. We'll see.
I have been keeping my eye on SLV and AGQ. Still looking for AGQ to get below 150. The gold/silver selloff might be one to play to the upside in the future.
I guess Jerry forgot about us??
later, RK
@rk. I got 0.15 on the spread, trading now at approximately 0.60. Should be OK I do not expect a Huge drop Friday.
Sorry I apologize my spread is 1020/1000 not 1080/1060 . Got 0.15 looks like its about double that now. Having issues with my android optionexpress app
Rhmoptions
@Ed. Tank you.
@ everybody when the market is moving like it is it is doing now and you have no clue where it is going. It might be good to use a straddle, I mean for example if the market is 1200 buy a putt and a call on 1200 same expiration date. Buy it a couple of months away though because if you buy to close you have a lot of decline in time value.
I got rid of 1025/1050 with same credit 0.25. Just remember an extensive leg down and up in August. No guessing.
@Pascal Don't know much about straddles. We're pretty much spreaders here tho would love to find out more. Have you done them, how does it work, or ow did it work for you?
I did some paper trades on long /short straddles for a couple months. The problem of long straddles is if the stock rises, the call gains less(could be significantly less) than the decrease in put value and vice versa in general. If you could time it right, sell call at rise, and sell put at down, then it works. Just my 2 cents from paper trading and observation. Short straddle is expensive and don't think I am that crazy...
I done a couple of straddles lately because the market is moving up and down so fast and that's usually when they work if you use it at a quiet market it doesn't, if you want to make them work you should keep in mind two things
1.if your sell or buy a straddle, I usually buy them, on for example 1200 buy it exactly at 1200 that's important for point 2
2. When you buy or sell them the put or call should have almost exactly the same delta.
Remember straddles only work if the market moves up or down a lot you need that big movement so the delta can change enough into a profit on your options.
To answer the question did they work for me lately.yes they did especially the last couple of weeks with the big movements but that's about only time I used them.
I'm really hoping nflx did not wipe jerry out. He hasn't commented since that stock got decimated last week.
I'm hoping likewise. He has always been so supportive of us in our miseries and naive questions. Also, I remember he was big into AAPL which might still bale him out tho its not done too well just lately. Commiserate with us Jerry, we understand.
He's probably on vaca.
I did pick up some SPX 1060/1055 yesterday after i took a loss.
they will expire today to seal one of the wounds.
will wait till wed or thurs next week to make a move I think.
That would be wise
So what could it be. Medical crisis. Family crisis. Auto accident. Legal crisis. Financial meltdown (nflx hypothesis), tired of questions. just too busy.....whatever. I miss the interaction, I miss the information, I will continue to trade and post here but don't see how this can persevere without him. Thanks Jerry for all the advice and for giving me the courage to try this!
So far 14wks in a row and okay with SPX trades. Today i opened up an early 990/970 spread for a small 0.10. I wanted to keep alot of distance so a smaller ROI this week.
Good Luck everyone
rhmoptions
safensimple said:
"So what could it be. Medical crisis. Family crisis. Auto accident. Legal crisis."
I have no insight what the reason is but I've often thought about might happen if something like that happened to me. Selling NPs/NCs/ICs/spreads is totally different from what most people do -- buy stocks and hope they go up.
Especially now with weeklys, we could be out of commission for a day, and end up being long/short a huge position that we didn't really want. And do any of us have someone that could look at the account and have a clue as to what is the correct move? I know I don't!!
I've often thought it would be nice to find someone that trades like this so we could cover each other's back. But there doesn't seem to be many of us.
Nice rhmoptions. I had put an order for 970/960 for .05. It didn't get filled.
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