My theta game has been weak lately. I've got like $600 in premium from Sofi $7.5CCs for October that will be nice. Unsure if I am efficiently selling calls because it seems like I only do it 4 or 5 times a year, but I also don't like capping my upside when my holdings are beaten down for no reason. Payo I've got another $500 in premium presuming it is below $7.5 which seems safe right now. I might dump if I can get 50% gain before next earnings.

I've also changed my strategy a little bit too. I used to sell fairly close to ITM calls against half my position and roll if needed otherwise that was it. Due to my expectations about markets dumping I've been doing that for 1/2 to 3/4 total position and selling further out(4-6 month) leaps that are deeper OTM just to capture a little extra added value because why not. The money isn't crazy, but should net a decent amount of premium with little risk.

I tried adding some CSP premium too, but literally all 3 I chose are basically tits up. SOFI $5 (cuz I fuking hate myself), BBBY $4, and DNA $3. I will say it kept me from buying any of the 3, so at least there is that.

Because if it were so simple everyone would be rich. I'd guess 99% of average traders lose on options in the long run. The lure of easy money will get to you. Your option strategy works until it doesn't. Lol. And when it doesn't it will probably happen just when you thought you had it all figured out.

To understand why, you need to understand Greeks. So in your example the September 16th strike does not pay off as much because Theta will Decay the value of the contract. As a contract gets closer to expiration the greater Theta will play into the contract value. So therefore your longer dated contract loses value by Theta to a lesser degree. That is why the profit margin is greater. Keep in mind most people get fooled into thinking, gee I have lots of time left on this contract I might as well hold it. That usually signals the end of their option trading career. Repeat that several times and you will go broke. Stop loss and money management are much much more crucial when trading options versus buying stocks. Time Decay will erode the value of your contract and before you know it it will be worthless.

As a general rule I would say most people should not venture into option trading. Most people do not have good money management. Most people don't use stop losses. Most people can't separate emotions from their trading. If you can't do any of those you will lose a ton of money on options. A safer strategy would be to sell contracts. Covered calls, cash secured puts are good strategies for stocks that you want to hold long-term.

in hindsight i see that i didn't mention what types of options i was talking about. the post you quoted of mine, i was talking exclusively about CSPs. so in that regard, i was hoping they expire worthless.

my strategy is basically this: let's say there is a ticker that has heavy support at $25. i will buy a couple CSPs at $15 for example for $800-1000 premium, for 2024. in a market like this where volatility is high, i will wait for the stock to hit $30-35 and close it out early for 30-50% profit. if things go sideways and support breaks, i can just hold until it price recovers. and if it doesn't recover, i am happy to own the stock at $15 less the premium.

i was just not aware that long dated CSPs can be as profitable as shorter term when closing early.

A couple of things to consider that might be helpful for you. Number one, avoid selling contracts on red days or in periods of decline. If you do you are much more likely to wind up rolling your calls or assignment. Number two, consider selling contracts 30 to 45 days out at 30 Delta. Most option Traders consider this to be the sweet spot. Remember though, your goal is not to hold until expiration. Again most season option Traders would probably take profits at 50% on those contracts.

Yes in that case you are absolutely right. Why don't more investors use this method? It's especially ideal when you are considering getting into a stock at a particular price.

I guess the other possibility is FOMO. Some people might fear if they write a contract and the stock pops before expiration they will miss their entry. This is where I think T&A comes in. You have to be able to determine for yourself where you think the price is going to move. That will give you a strategy on strikes and entry. Even if you're wrong your conviction will help you get through some of that emotional stress.

*sellI don't think I can agree with avoiding selling contracts, especially puts, on red days all together, but otherwise all of this.

You can put on a 30 delta 45 DTE CSP ~8 times throughout the year, readjusting to the market as necessary. Compare that to a single 2 year long CSP. And if the market moves against you, on the shorter term you can take assignment and wheel or you can roll out in time to collect more premium. On the longer term option you may be sitting there for a while waiting for it to come back with no real options to do anything about it (except maybe sell calls against it).

Yes, you're right. As I was writing my reply I was thinking mainly cc because that is the bulk of what I write. Ideally I would sell puts on red days and cc on green days. But i write regardless.

And when I say avoid selling calls, I mean from the perspective of caution if you have no general idea of where price action will go. I tend to write weeklies on Monday morning 30 minutes after the bell as that's where swings peak and dip. So if you're not careful that volatility can catch you off guard. So for example a 20delta call could swing to 30delta and for me 7dte is a little too close for comfort. So in the moment of heavy decline after the bell I would not write calls as I anticipate there could be a possible reversal. In those instances I would try to let the dust settle and then reevaluate.

The caveat is you need to know general price movement on your underlying security. I sell tsla contracts every week. It is volatile. Therefore I choose strikes accordingly. I have other positions that I can sell cc also but because I'm not as familiar (and the premium is less) I avoid selling contracts unless I'm very comfortable with the movement.

Only sell CSPs on red days. Usually hold CCs till I get 50-75%, but end up holding longer in circumstances such as poor market performance and being unwilling to rewrite further out calls when share price is down significantly. Seems like I’ve been caught in a loop of selling my CCs a month before earnings then after earnings spike sell more. But obviously only selling 4x a year isn’t ideal.

STO TSLA SEP02 280c x16 yesterday.

BTC today for 6K net

STO
TSLA Sep09 270cc x13
TSLA Sep09 280cc x3

Could be a wild ride but I'm hoping volatility takes a break on this condensed week. Looking to net just over 9k for the week.

Tsla recent double top I think will signal at least a near term decline with a possible target of 256 at .236 Fibonnaci. Macd headed towards 0 so I expect any bounce here will be small. Short term outlook neutral leaning towards negative.

I don’t remember- do you have 1,600 Tesla shares or are you only partially covered?

1651 or something like that. I added some before the split hoping for a pop but looks like I will be waiting for that to happen.

Personally I wouldn't sell naked calls and my broker doesn't recognize pmcc as covered.

subbed

Is the regular stock market and investing thread down for everyone else? I haven’t been able to view it in days.

Carbon had to make a new one. Only one disappeared for some reason.

Can someone plz link the new regular investing thread I couldn’t find it on the finance sub

here

https://forum.obnoxiousbrutes.com/showt...hp?t=181694583


wtf is going on with this forum.

previous thread was deleted for no reason.

Crazy week. Rolled out to next week Sep16 and added another contract to 280.

This is purely the result of selling calls on red days. What I warned against a few posts above. The only upside is my T&A tells me this pop is temporary. Whether I am right or wrong will remain to be seen. But that at least gives me conviction on my play and keeps me level headed.

Admittedly not the best money management but that's how I do it, seeing that it is a long term play and I can roll this out for however long it takes. Downside is opportunity cost.

In the past I would have taken the loss and sell contracts like usual, making up for the loss over time. I now see that as a mistake. Rolling is a much better, safer outcome when dealing with big unexpected price movement on short contracts (with caveats, of course).

Been selling weekly calls and puts on MSTR for months now, sheit is scary because this fookin thing than go to zero if Saylor goes to jail or something, but these premiums are insane, can make $500-1k easy per week on just ~25k investment.

At least when you roll you only lose a week's worth of premium. I was a dumbdumb and rolled my Sofi $7cc from Aug to October for a small credit, but if I held to the bitter end I would have actually let it expire worthless instead of delaying the premium gain by 6 weeks- sold the $7.5ccs today leaving only like 25% of the contract value remaining. I think w/rate hike coming it'll bounce pretty hard once people start realizing interest incomes from banks are juicy when gov't borrow rate is 3-4% vs <1%

That opportunity cost can feel painful when you are selling contracts as primary income. If this rolls out two more weeks then I will be 'losing' money.

Another crazy week. Tsla decoupling from broader market and holding tight(er).

Rolled my 270cc and 280cc out to Oct21 to wait out the storm. Added a net credit of 24k on top of my initial 9k. This volatility and upward price movement bodes well for premium...assuming I can get out of this unscathed.

I'm Back.

Not as well as my 6 doors with an average of 2.99% on the mortgages.

Those are 30 year+ investments regarding sofi and pltr. Forget that I recommended DE. LMT, WFC, at points where they're now 10% yields on initial investments and 2x+ the price? Tell me more about how TSLA traded in a specific band for years before 10x.

How's the weather in your area?

TSLA SEP23 725CSP expired worthless
OXY SEP23 60CSP x10 closed for minor net

Had GOOG SEP23 101csp but rolled out to SEP30 101 for net credit of $1.30 (?)...can't keep track

TSLA 270cc and 280cc that I rolled out to Oct21 now looking much better. A little soapbox here...these contracts were deep deep red BUT based on my T&A I held the course. Times like these, you need conviction in your position (and the fortune of willing to hold long term) in order to weather the storm. The only reason "I" could hold the contracts is I believe, rightly or wrong, in my analysis. This is why heavy positions need to be rooted in YOUR OWN due diligence, otherwise you may be forced to make a poor decision because you don't know what to do. Granted, my methods are not the most sound, as I've written in the past. However, I'll keep working at them until I can come up with a more refined method.

Next week could see more volatility. Would be surprised if we see a decent bounce but overall I think at the very least we chop sideways but think we are headed for a test of the lows on SPY which in turn will bring on even more volatility to TSLA.

On the positive side, I've reached my 2022 trading goals ahead of schedule inclusive of trading fees, though I cheated a little with a cash infusion which allowed me to sell more contracts. Note YTD is all realized gains, with about 95% through option trading.

had oxy sep30 56csp x10 and expired worthless for net of roughly 1K

goog sep30 101csp deep red so rolled to a leap sep2023 100csp.

STO
OXY june16 62.50csp x10

OXY $60 CSP is almost free money since Buffet will just keep buying. I want shares bad for the end game when he just buys the whole thing.

'Why did you roll so far out? It's not so red you couldn't have just rolled out to the next month.

very good question. I think we may be at or near bottom. Goal is to maximize price movement through options...not recovery/break even and not necessarily holding until expiration.

this is something I've been thinking about lately...
long dated strikes have higher delta than close dated strike (for the same strike). If I'm going to roll, why not roll to higher delta if I think there will be a dramatic price movement?


If my goal is to utilize delta to my advantage, then longer dated strikes have greater profit potential, assuming theta does not play a significant factor, i.e. fast and dramatic price movement.

GOOG
oct2022 delta is .3548
sep2023 delta is .5781

therefore for every dollar movement, the difference is $0.22 for the two given dates (obviously delta changes as the price moves)
therefore, potentially I would have greater yield with the sep 2023 contract AND the oct2022 profit is capped at max premium of $2.15. The sep2023 contract becomes more profitable when price moves above +$3.72, not accounting for theta.

anyways, just something I've been thinking about as I learn more about options. The key here is to lower my risk when markets are up or down BUT also not to overthink things.
NOTE- I wouldn't use this strategy if I thought there would be a price decline or sideways movement.

LOL. someone needs to check my sh!t because my calcs are all wrong! Delta spread is not as wide as I stated. Part of what I wrote still applies...I 'could' still profit more with the long dated csp if there is a dramatic move that exceeds the max premium for the short dated contract. As well, I am still comfortable that there will be a larger upward move in the near/mid term.