Saturday, September 1, 2012
Hi all, a lot of questions on the blog regarding which brokerage is best, cheapest, fastest etc.
I have been with Schwab, Fidelity, Ameritrade etc. At this time I trade with two brokerages. Most of my trades are with TradeKing because of the rates. I do manage two accounts that are with Ameritrade and I like their platform. I also seem? to have faster trade executions with them. Maybe I put in a more reasonable attempt? But 75% of my trades are with TradeKing. I get no kick back for recommending them..lol (wish I did). But the rates are 4.95 and .65 per option. I look around every now and then and have not found anyone to beat them. They have next day fund transfers of money. Decent online help when needed. They seem to have a fair amount of tools for you traders that look at that stuff. I trade most days quite few options and never use any of the tools. Most of you that have known me for a year or two know that I don’t use vix, (I have no idea how to use Gamma, Theta, Alpha etc. I never look at the Delta or the Implied Vol. For those that do use all of the Greeks etc. TK seems to offer it?
The opening and closing and rolling out is very simple and intuitive. They make a four
legged trade very simple. So if you are looking around you might check them out.
For those that have been trading AAPLE, it sure has been an upward road. The premiums are good and the upside is still to come. The new phone and other products will just keep producing money. I do think that a pullback could happen as it has gone up a hundred points in the last month or so. But for every seller there is a buyer waiting to jump in on any correction.
I appreciate you traders that always jump in to help new traders or anyone with a question. It is a pleasure to exchange ideas with you.
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64 comments:
Isn't IB cheaper for options than Tradeking? I'm trading options with them and they're pretty good.
Here's an overview of the biggest brokers and their pricing: http://www.finviz.com/store/stock-brokers.ashx
Tom, that list of brokers commissions is not quite accurate for IB. The $0.70 they show is about right for the average price, but the minimum of $1.00 is not. I put on a call spread last Thursday at IB with two contracts. Total commissions for the buy side was $0.03. Total for the sell side was $0.02. I find that the commissions vary depending on where they can execute the trade. IB is good at finding the low commission exchange but also getting the best premium price. If the trade executes on the CBOE, I get the highest commissions but still they are something like $2.50/contract. Executions on BATS seem to have the lowest commissions. I alway use their "smart router" with a limit order price and let it find the best place to execute.
Interesting - I am going to call tradeking first thing tuesday. I like their platform as well but their calculation for maintenance is higher. i know most brokerages will negotiate trading costs depending on the number of trades you are making. i'll see if they will do anything about the maintenance. here is what they have on their site.....
OUT-of-the-Money PUTS Initial+Maintenance:
The greater of: 30% of the underlying MARKET price plus the premium minus the out-of-the-money amount
OR
15% of the underlying STRIKE price plus the premium
TradeKing maintains a minimum margin requirement of $100 per uncovered short options contract.
the per contract rate is sometimes negotiable, depending on the size of your account and trading volume. if for instance another broker is $0.15 they may split the difference to get your business. i have seen ToS do that, though I opted to stick with TK in the end. i don't know if TK will do it.
For everyone trading AAPL, there is a great article on SeekingAlpha.com that raves about options on Apple and talks about various strategies.
Enjoy..Jim
http://seekingalpha.com/article/843251-2-strategies-for-making-extraordinary-returns-with-apple-options
well, i heard back from tradeking. response from them is below. doesn't sound like i can get them to adjust the maintenance held on naked puts. i'll be switching. someone posted optionshouse which looked good on quick glance. tax ,have you decided where you're switching to?
Thank you for contacting TradeKing. Your calculations are wholly accurate, and I apologize for any confusion in the short term. The difference is that AAPL options are actually held at a higher requirement, 35% based on our risk management and margin department's thresholds. We've had the request, and are looking into putting higher short option requirements in a list form on the site (similar to how you can currently find higher requirements on stocks), but at this time the only means to calculate this is based on the trade preview screen, which did show you our correct current requirement. In this case, dividing that requirement by 100 for the per share requirement, adding in your our of money amount (65.24), subtracting out the premium, then referencing the remainder to the market price, in this example 233.72 / 665.24, or 35%.
We do recognize that our requirements are more conservative even than some of our competitors in our sphere. Unfortunately, we do not have a means to lower these on a per account basis. While portfolio margining is something we've in the past, and continually explore, at this time there's not yet a concrete plan to introduce the service. I truly regret if this renders us not a good fit for your needs in a brokerage firm, and please don't hesitate to let us know if you have any additional questions or concerns.
i think I'm staying put for now. It will be an auto roll into OptionXpress. Commish are high at 1.25 per compared to what everyone else has been saying. That will give me some time to figure out where to go. When/if I do switch it will involve 11 accounts. I'm trading for every family member under the sun plus my biggest client. Oh well.
Jim the Texan
Read the Seeking Alpha article on AAPL. He stole Jerry's primary aapl trade that bugger. I think a lot of us are in that very trade.
Tax,
If you consider switching to IB, look at their "Friends and Family" account capability. I trade for my own account and for those of my two adult "children". I have all three accounts linked under a "Friends and Family" account. This has several advantages. First I can see the status of each account very easily. Second I can prepare trades for each account and then execute each one almost simultaneously so they get similar prices, which if I do it right are all good prices. The other reason I do this is IB has good security protection, but that precludes my children from just giving me their passwords to trade their account. With the Friends and Family account setup I can trade their accounts, but if something should cause me to not be able to trade, they can immediately have access to the account to make necessary trades. If you are a professional advisor they also have a similar service for professionals.
eoption.com is cheap ($3 per trade +10cent per contract) and they are legitimate.
Optionshouse They charge 8:50 plus .15 per contract. Just opened account and will see how they work. Downside... It takes a week for money transfers to settle. Also have promotion for 100 free trades. Good rates on spreads as well and of course margin is good.
Regarding Brokers, this is a quote someone posted on another forum today, it's part of an email sent out by a service that puts out trade ideas:
We had suggested that all members were able to get executions at the 0.30 credit. We watched time & sales real-time as all of the orders at 0.30 were filled.* However, there are brokers that can hold orders "in house," which means they are not out on the electronic systems and available for all to execute with. That is a negative because executions become more difficult to get.
An example of this is TD Ameritrade, the parent company of thinkorswim (TOS). We found out that many of our members that use TD Ameritrade or thinkorswim had more difficulty getting executions today. We assumed that all orders had executed at the 0.30 credit price as was visible on the electronic "time & sales" platform. However, we were informed by some of our thinkorswim members that they did not get executions at the 0.30 credit price (or received only partial fills).
Is there an advantage to trading through a broker like Interactive Brokers in getting executions more easily? Yes! While a broker like thinkorswim is great in many aspects, what we saw today with executions is one disadvantage to using them.
I've heard all the negatives regarding IB, I've been with them now for around 4 - 5 years and not experienced any of it. The main issue people might have is if you regularly push your margin to the limits and get margin calls, IB don't do margin calls, they just liquidate positions (apparently this wiped out a lot of people during the flash crash). You can set a "Liquidate Last" on any positions you choose so it does give you some control. It's not an issue for my trading style, I'm never over 40% margin.
Damo.
good to know...that's something that's pretty tough for an individual to pick up on.
tax - if you're there i was experimenting with a weekly spread on SPX yesterday. i couldn't get it filled with enough cushion that i was comfortable - but had the order in pretty close to the bid. couple of questions for ya...do you often get the bid price on those? and what is the reason for the 20-25 pt spreads rather than say 5 or 10? do you like the extra space if the trade goes bad, or is it easier to get filled? thanks for the hand holding if you have a minute
First off I want to thank everyone for their input on brokers. I rolled to OX and will figure out what to do next.
gbarb - I usually DO get filled at the bid, but will normally add .05 less than 1/2 the diff between the bid & ask. That is a start point. If I don't get filled within 5-10 min, I will adjust the price unless the market starts to move in my direction. As for the spread points, NDX only comes in 25 point spreads. I usually do 10-15 points on the RUT and 15-25 points on the SPX. I find the larger spreads allow me to get my 1% target roi and get further away from the index. The downside is if the market goes against you, you get absolutely no help from the long option because it is too far away from the index.
I have been placing my spreads on Tues/Wed and getting my required cushion. In fact I just placed an NDX spread Wed at 2PM got 1.2% roi with 67 points of cushion for a Thurs exposure with a Fri AM settlement. I find you can do that with NDX. I stayed away from SPX this week because it is a Fri PM settlement and with the ECB & jobs report, I didn't want to run the risk of a market disappointment.
Remember that 95% of my trades are on the put side. I seem to always get burned on the call side. Hope this helps.
thanks...yes, it helps a ton. it is nice to have a place to ask questions, not having anyone that i personally know to ask about this stuff.
Is there a logical transition from selling naked puts into other option strategies ??
For example... naked puts to calendar spread to vertical spread to IC to butterfly...etc
I'm looking to slowly work my way up in complexity using one of my secondary accounts.
thanks in advance
Hi Taxman, I did my first NDX put spread on on Wed. 2675/2700 for 0.40. NDX was at 2767. I did the trade with IB. Commission was $7.59 for 5 contracts. Thanks for all your previous comments on the indexes. Avelino
Avelino
Did exactly the same trade but got .35. Great negotiating. Also figured the NDX wouldn't correct 67 points in a day and a half.
Just a correction on OptionsHouse. I have been with them for years and it is 5 options for $5. Common stock is $3.95. Margin interest is 4% on my account. I also have an IRA in TDAmeritrade that I will be moving to Optionshouse due to trading costs. OptionsHouse will allow you to sell cash covered naked puts in your IRA.
It looks like you can choose your plan with optionshouse. either 5 for $5 or $8.50 +.15/contract. I opened an account and just need to get the funds in.
I rolled around my AAPL's today. Went from today's 655 call to Sept 22nd 665 call for debit of 3.05. Added 10 pts to the spread against my Jan 555 - so 3.48 pts/week.
Then, rolled the Jan 555 up to Jan 620 and took in 51 pts. With that cash I BTO Jan 600 and sold the Jan 630 calls for 21 pts. That'll get me more ROI than letting the 555 sit there. Jerry, you said that's what you have done when it runs away but it took some time for it to sink in.
Then rolled up my Jan 555 to Jan 620 and used the cash to open a new Jan spread....BTO the 600 and sold the 630.
Fellow traders,
This blog is a great source of information for a new trader. I definitely benefited from reading it on a regular basis. So I would like to offer something in return.
In my quest to understand options and become a better trader, I've developed a little program to help me visualize how changes in volatility, underlying stock price and days to expiration affect option premium (a curse of being a software developer.)
I hope at least somebody will find it useful. Here's a download link to this program. I will keep it alive for the next week.
http://www.options-edu.com/freedownload/NSTC_Position_Analyzer_Setup.exe
UserId: freedownload
Pwd: freedownload
I would be interested in your feedback about usefulness of this program, its usability, and features, as well as any issues you might find using it.
Enjoy.
Alex
Gbarbs, that is exactly what I do. I am constantly rolling or at least comparing different strategies. It is a constant decision to roll out current short side into Jan and take the cash to open new positions or sit on current ones. Usually after several pages of work, it comes out about the same.
I have rolled a lot of current positions into Sept 22’s. It is tough to just sit and watch for a couple of weeks but it pays pretty good so I will slap myself when I get yancy to trade.
Good ideas and thoughts all. Keep it coming.
Jerry
Alex,
Thanks for sharing your program. I downloaded it but can't get very far in using it. (I have been a professional programmer so am very computer literate.) After I installed the program I let it start from the last step of the installation. It opened an Excel page and displayed a message asking if I would allow macros. I responded "Yes or OK". Then I got a message that said something about "data missing". I assumed that you probably removed all your personal data and so there was no data in the file so I ignored it. Then the Excel page was shown, but I wasn't sure what to do with it. I tried to put a symbol in cell A4 but I could not write there. I noticed that the file was marked as "read only", so I saved it as a new file name. I tried again to put a symbol in A4 but I could not. I then moved down to A5 and I could enter a symbol so I entered AAPL. I tried clicking on "Yahoo" in cell A1, thinking it would go to Yahoo and pull in the AAPL data, but it did not. I then put a call in columns E thru J. Should column G use C for Call or use the whole word Call. I think "Exp DT" must be the expiration date. I assume this must be the Saturday after the third Friday for monthly options. But when I put the date in, it showed it in number format, not date format. I clicked on the "Validate Expiration Date" but nothing happen. Is the spread sheet going to calculate the Greeks when I get the rest of it working or do I need to manually enter them?
I am using Excel 2000. Could that be the cause of any of my problems?
Could you please give me any hints on why I am stuck in the above? Also it would help if you could write a few sentences more about how to use the tool.
Dave H.
Dave,
1) I have not tested it in Excel 2000. I didn't even know there was a converter for Excel 2000. It's a macro enabled .xlsm Excel file. It's designed to be used in Excel 2007 & 2010.
2) There's a User Guide in the directory. I would encourage you to read it. Just click the Help button. It will open it.
Alex
Alex,
Thanks for the response. It seems that with Excel 2000 the file is 80% working and the missing 20% is crucial. After I read the user's manual, which is a very nice manual, I see that the things missing are:
1. The buttons R, A1, A2, A3, A4 do not show up when using Excel 2000
2. Likewise, the drop down menus do not show up for the data server type and for the "validate expiration date".
Given those problems, I can't get past the start gate so if I am going to use this I will have to pay up for Excel 2010. Up until this time Excel 2000 has done everything I needed so I never upgraded Excel.
Dave H.
Alex,
I have 2010 and i get a compiler error in Module8 when opening the file.
Dave,
I've uploaded a .xls version that should, in theory, open in Excel 2000. Give it a try.
http://www.options-edu.com/freedownload/NSTC_Position_Analyzer_Setup_2003.exe
UserId: freedownload
Pwd: freedownload
badata2d,
please uninstall the program and download and install a new copy. Let me know if you are still experiencing this problem.
support@options-edu.com
http://www.options-edu.com/freedownload/NSTC_Position_Analyzer_Setup.exe
UserId: freedownload
Pwd: freedownload
Alex
Alex,
Thanks much for providing the .xls version. I uninstalled the previous version and installed the .xls version. I let the installer launch it. I then got two error pop ups, which I think are the same as I got when trying the first version:
1. The first one was from Microsoft Excel and said "File error: data may have been lost." I clicked "ok" to end that box.
2. Then I got the second one, which came from Microsoft Visual Basic. It said "Run-time error '1004': Application-defined or object-defined error". There was a "continue" button but it was greyed out. So I clicked on the "End" button.
The excel file opened but it was missing the same four buttons and drop down arrows as the first version displayed. So unfortunately this one does not seem to work.
Dave H.
Dave,
I'm afraid there's nothing I can do about this. Microsoft enhanced VB between 2000 and 2003 exposing new methods and properties of the objects. I guess I will have to list Excel 2000 as unsupported version (:
I know that upgrading Office just to run this little app is plain silly, but, as a FYI, I purchased Office 2003 on eBay for $30 for this project.
But thank you for trying it.
Alex
Alex,
Thanks for the further thoughts on Excel 2000. I became a full time investor in 2004 when the company I was working for went out of business. But one advantage was that I inherited several computers that I had been using. I recalled one had Excel 2002 on it so I put your .xls on that computer and it started up showing all the buttons and drop down arrows correctly. I then set up a Put and a Call and clicked the "R" to load the data from Yahoo. This all seems to have worked correctly with all the columns calculated correctly, at least at a first glance. So I think you can list this version as working on Excel 2002 or higher. I already uninstalled the original version so I can't verify if Excel 2002 would have worked with that but I suspect it might have.
Thanks again for sharing your work.
Dave H.
Tax - I'm looking at the weekly index spreads. You mentioned you'll enter the trade around a delta of 5. Is that for the closest strike or do you take the difference in the sold and bought?
For example SPX the deltas are listed for 1375 .02, 1385 .03, 1395 .06.
If you did a spread from 1375 to 1395 is your delta 4, or 6?
thanks for your help
Gbarb
I use the delta of the short strike, so in your example of 1395 short, 1375 long the delta would be 6. remember SPX settle Fri close
I placed some NDX 2675/2650 spreads this AM for .30 with 106 points of cush. Waiting to see any aapl/ndx reaction to I-5 rollout to place other NDX/AAPL trades.
For any one looking to ultimately do this for a living a PM account should be at the top of your gole list. If your doing any kind of volume TOS/TD will talk to you. I'm with TOS pre TD and pay .75 no ticket and 1.5 over fed for margin.
I still have a 15.00 assignment fee but just asked my TD rep to see if he could do any thing with it and he felt he could. That was Monday have not heard anything yet.
for anyone with out an account now sign up with TOS through Tasty trade and get a free sub to Tasty plus I think 300 in free trades. It's a Win Win all IMHO of course....
On the AM settlement, is that settled based on the opening price on Friday? I searched the CBOE website and googled and can't find the answer to this basic question....when is AM settlement?
Gbarb
All AM index settlements are calced the same way whether weekly or monthly. Here goes. Take NDX. NDX is an index made up of 100 stocks. Settlement is calced by taking the OPENING price of all 100 stocks and plugging it into the valuation formula for the NDX index. It is NOT the opening print of the NDX since all 100 stocks do not open exactly at 9:30AM. Some open at 9:30 and the second trade of the morning could be up or down. That is why the settlement number is NEVER the same as the index opening value. It usually takes till late morning to get the values.
Go to www.cboe.com, click on the Quotes & Data drop down to Index Settlement Values and the very first blue line says weeklies. Further down they give you monthlies.
thanks again. i could not find that anywhere. many places said AM settlement but i just couldn't find the explanation. think i got it now. next wednesday...
Alex
I downloaded the program. I am using excel 2003. When I try to download TOS , I receive a compile error in module 3. Could it be that it does not work in excel 2003?
I would like to share my options trade for the week. So here goes. It was wed and AAPL just announced Iphone 5. I sold 2 short strangle 635/690 for 1.70 total when APPL was at 661. Things were going well and then the last 15 minutes AAPL shot up 7 points. Thinking AAPL would level out the next day, i held overnight. Now its about 7am and AAPL Has gaped up to 678. (Reason why i hate no options extended hours). So Im starting to get more nervous for every point. So AAPL opens and my 2 Short Calls are worth 1.70 EACH! I was down about 270. Instead of closing out I rolled my 635s to 660 for 50c credit. My plan was if AAPL get to 681 I would be out, of the calls, and if the calls would give me a chance to get even i would not be greedy and take it. So i sit in front of the screen all and there was a little dip after QE3 was announced and i was able to get filled @.70. (which as you know by friday those calls were worth 7 bucks a piece )So my 635 and 690= to a 3 dollar loss, but i still had those 660s which i held till 3pm on friday and closed them out for 95 dollars profit. Any thoughts on how you would have handled this problem?
AndyB, send me an email at support@options-edu.com
Alex
What is everyone trading now? Jerry, are you still buying AAPL at these levels, or are you still holding from earlier purchases and selling against those calls?
I've got a couple of APR 13 630 calls that I am selling weekly shorts against. Currently holding this week's 695.
Keep waiting for a pull back in AAPL to buy some more longs, but it never dropped after the iPhone 5 announcement. There was a moment just before the announcement where I saw it drop below 660, and I thought "is this a good time?" It was, but as usual I hesitate and missed it!
Mike
b1llmoo, I have not taken apart your trades but now that they are done, they are done. But for my trading here is some of what I would have not done.
1. Don’t try to outguess a happening..ie; earnings, reports of new phones or QE3 etc. For all traders out there following some of these trades, it is a losing proposition. Don’t guess!!! Trading options has enough built in guessing. Don’t add to it.
2. If you have set up a trade that allows for ups and downs, that is ok. But don’t open a trade right before an event and especially an event that if it goes wrong it will hurt your profits.
You wrote of your hope that AAPL would hold on the next day. When you find yourself ‘hoping’ for something to happen or not happen on a short term trade you are trading wrong. If it is going against you, my advice is to close. If it is going bad now, just wait it can and probably will be worse the next day.
Hope that helps as we all have to learn how to limit risk. Glad you only had 2. I HAVE to follow guidelines as I often open a hundred or so and losses become outrageous if not limited.
Kauai- good to hear from you.
Yes I am all in with AAPL. So far so good ..LOL. All of my positions are for this Jan and this weeks 690. What I have been doing is to sell at the same strike for a while and if I cannot keep up with the rapid movement of AAPL. I then roll those out to the Jan, usually same strike. So I will end up with strikes from Jan-565 long to the Jan 630 short. I just forget them and let them sit there and wait for parity in Jan. I have strikes similar to those all over the map. When I roll them out I receive a credit and use that to open new ones. Lately long the Jan 650 – this weeks 690. I have well over 200 of these spread out over several strikes.
Regarding when to pull the trigger and when you miss the boat.. lol. We all do that as we will know in a very short time what we did or didn’t do was right or wrong. My thoughts on AAPL is that there has never been a stock like this. It will end as all do, but until sales drop off or some new product blows them away I am riding this train. ROI so far this year is over 100%. This type of trading may not be for all but the prems are great and short play or longer there is money to be made with AAPL.
Jerry
Jerry
Do you have a rule in mind that you would exit those January spreads?
I am in a couple of those and all looks safe and sound. I am just trying to establish an exit plan ahead of time so I can make an unemotional decision if that time comes. I should have figured that out before entering, but what can I say, I was emotional and excited about AAPL
Kauai - I am doing a similar trade with BP where I bought a Jan call and sell weekly's against it. That has been working well since it has been oscillating up and down the weekly cash flow is reducing my basis.
Also had a RUT Sept monthly condor get threatened. I set it up in early August when RUT was under 800. I had 865/875 on the call side. Last Friday I moved that out to October 880/890.
Since it was so far from the put side I closed that out, and was planning to sell a weekly put spread on the RUT since the funds are already tied up for the October call spread.
gbarbs; I don't really have a plan regarding when I would close or roll etc.
I have confidence that the long side (the bought Jan strike) will hold up and I also feel good that AAPL is heading towards the Oct earns and then the Jan earns and the continual addition of new products will sustain the price. If necessary i might roll down the sold side in any given week as i have around 40+ points of cushion to play with. But most times that I do that I end up sorry?
Chas - here is what tax responded with when I asked similar question not too long ago....
My take on credit spreads.
I trade mostly index spreads, SPX, NDX & RUT. I will but do not like to trade spreads on equities because they get whipsawed to often with EPS, headlines, upgrades/downgrades. 90% of my spreads are bull puts. Most of my loss trades are call spreads. You can get further away from the index on the put side than on the call side. I also trade primarily weeklies. My parameters are as follows.
1. I place trades on Mon PM or Tues to minimize exposure. If there are substantial economic report activity have waited till Wed. Like last week with FOMC & ECB
2. My deltas are below 5.
3. My target roi is 1-1.5%
4. I will consider closing the spread when delta gets near 20-25.
5. I try to stay below support/above resisitance levels.
6. I adjust my distance from index based upon recent volatility and weekly numerical moves of the index.
7. My spreads are 20-25 points with 10-15 contracts.
I do sometimes place an IC to take in aditional premium with same maintenace requirement
i'm in a similar boat as you...putting all the pieces together. i was going to do some backtesting using thinkback for that same question....if you look at the difference in the cost today from delta 4 to delta 27 on NDX....
The 2790/2805 spread would get you credit of .10 (delta 4). This is <1% ROI so its probably not the best example but the 2835/2850 would cost 2.40. That'd be about a 15% loss.....I'm using the strikes between bid and ask - maybe its worse if you are closing in a hurry and have to do a market order.
I am sure there are many other variables which is why I wanted to do the backtesting...
You guys would really be doing your self a favor getting a free two day membership and watching the 4 part market measures on SPX strangles spreads and condors.
https://www.tastytrade.com/tt/shows/MT
Thy don't do weeklies as it way to high a risk I closed out my Sep. positions two weeks ago!
You say you watched all fore parts did you also see the Karen interview? If yes to all of the above and you still want to do weeklies
all I can say is good luck and stay small. What typically happens is you get it working get complacent and do 100 contracts and Mr. Market bites you in the ass.
Between Karen, Tom and Tony they have a rumored 250 million gains in there careers. I'm taking the proven path.
Current positions SPX short Oct. 1525 calls Nov. 1270 puts SPY Short 133 puts Nov. 156 calls. By Dec. I will be all SPY or IWM the bid ask in SPX I find to hard to make adjustments.
SPY I rolled my puts up and got a good fill doing the same in SPX 2 days now and I'm still waiting.
The Karen interview in case you missed it.
http://www.youtube.com/watch?v=cXy9HoWX0es&feature=my_liked_videos&list=LLuzn70mg9bz5vhtBUblastg
I'm with Raging Bull Winkle, Tasty Trade has amazing info! I didn't really understand risk until I started watching TT.
I thought there was too much risk trading the longer durations but it's actually the opposite, the longer duration gives you more time to be right. Risk is controlled at order entry with correct position size.
Damo.
Check out :
http://nanseninvestments.com/
for longer term spreads strategy and much helpful info, for free.
Hey Damo could not have said it better.
Jerry
On AAPL - I had rolled down that weekly short side early on and regretted it. Since then have learned a lot and have been more disciplined with this trade.
We'll see where AAPL is tomorrow but I peeked at rolling my 690 to next week for 4.50 credit or dropping down to 685 for 8.25 (3.25 of TV).
I am thinking I'll drop down since it is at least 3 points of TV and more than 10 pts cushion. After chasing it all this time I'll kick myself if I get too close and drops down too far below my strike.
RBW, Addict!
Hi my name is Gary and I'm a total junkie! :+)
Tom called Wauconda a hot bed.
So far I have found 5 local to me that are Tasty members and this is a small town.
Nice, I haven't even found any other option traders here in NZ.
Damo.
I would like to share my trade this week. I sold a broken winged condor. 5x RUT 825/835/870/890weekly, on tues morning for .75credit with RUT @856. Delta on the put side was 6 and 10 on the calls. On wednesday at 10:30 I exited the trade for a profit of 174.
Hey RBW. I signed up for the 2 day free trial. I have been watching those videos on youtube for months. The price is to high to subscribe for me. I watched the Karen video. In the video Tom says She was doing short strangles. Not condors. I watched it a couple of times. Maybe that why he was saying she can stomach alot of risk. Do you agree? Or do you think she was doing condors. Being Naked the Margin would be so high.
Karen and myself in fact do naked strangles. yes the margin is high goes back to the saying it takes money to make money. Being naked is way easier to tweak the position or roll compared to spreads.
Having a PM account helps a lot but still takes a fare amount of money. If you want to know in your account if you can do it look at the front month one strike in the money strangle and see if you have the margin to do one or two.
I think I still have a gift membership to give away but you need to promise you will use it I only have one or two left.
Look for a Gary on there face book page and PM me your e-mail address and I can get you one.
Chas go to Tasty Trade get a two day pass and watch all the market measures. Learn what 1 - 1.5 and 2 standard deviations are and how to find them, also watch anything on volatility. Then watch the 4 part segment on SPX strangles. watch it at least two times.
Also watch the Karen interview at least two times one before market measures and once after. Trust me the light bulb will switch on..
SD and vol are way important to learn as it changes so dose the bell curve they are plotted on. Today Vol is very low and the curve is very tight so my size is a bit smaller than what
it could be.
One thing that was not clear was when they talk about being "challenged" what this is went the underlining touches or trades at one of you short strikes.
One thing I can add they don't talk about is you must stress test your account. Do you have the margin to sell an Oct. in the money strangle?
If you can sell two don't go and sell 20 at a 5 delta. If the 5 becomes 50 your dead meat! You need o be able to take it and roll. Being naked is the best play but as you will see on the
Market Measures their is money to be made at 1 SD in condors. Just set the goal to become PM ASAP
Like Karen stated once the money comes in you ain't getting it back.
Time for a new post
Jerry
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