Stock market.... What are you doing?

[CHCRandy]

what is the NRZ IPO? you know that stock inside and out

watched this tastytrade video on wide wing iron condors. said take off at 25% profit and move to next tradem 90% win rates. craziness. I have ICs I need to close Monday

Doc, I am trying to figure out this IC trading strategy. What does Tasty say at the 4:30 in that video? I am trying to figure out where 84% OTM probability is. I can't seem to figure out how to know where that is. How do you know where to put the short strikes on the put side?

I ran an IC mock trade on AAPL.......seems almost impossible to lose money. Is that the idea with these? Kind of just like selling a put credit spread, just you are covering the long side as well with calls? It almost seems like you are betting the stock just stays in a channel and dont have huge moves either way, is that the idea? Then let time decay to get you at a certain % of gain and close it?

I like these, but man my brain hurts trying to play them out in my head.

 

[hoosierdoc]

you nailed it. max profit when stock stays in the range..the goal is profiting from theta decay. Ideally big IV contraction to lower premium.

I am seeing the 19 Mar $120 strike with a 15.22% ITM probability. last price 1.07. sell that one, buy the $110. credit $0.50 on put side.

on the call side probably 155 for a 12% ITM, or go higher if you think it has more upside potential. -155/+165 has a credit of $0.60.

that's only credit of $1.10 and collateral needed of $1000 (width of wings, can only lose on one side). that ROC isn't good because IV rank is low now. only 13%. If IV bumps the premiums jump and you lose money.

look at RMO. IV rank 65% now. +10/-15p credit of $1.22, -25/+30c credit $0.75. total credit $1.97 with $5 collateral, or a 39.4% return on capital. that put side is higher % ITM around 38% though. if you dropped to 7.5/12.5 It drops to 22% ITM but credit drops to $0.45 on put side, or $1.20 total on $5 collateral. now you're down to 12% return but it's in 40 days, or 110% annual. the goal is take the trade off at 25-50% profit.

the 7.5/12.5/25/30 has a theta of .019 I think. so every day you should make $1.90. just on time value going away. at 20 DTE if stock doesn't move it should be $38 profit on $1000 collateral, or 3.8% gain, which is 69% annual.

TT wants you to only put on IC if IV is above 50. that's probably too conservative IMO. if you do a skewed one you can play some directional gain also. I did RMO at 10/15/25/30 because I think it can pop. it's an EV battery company. I went closer to ITM on puts because I think less downside risk. my theta is $2.6 on the position. so in 20 days I should make $52 if stock doesn't move, or 5%. which is 93% annual.

 

[hoosierdoc]

if you sell an IC the day before earnings when IV is really high, you can go fairly wide due to higher premiums and get pretty far away from stock price. as long as stock doesn't jump past your position you'll likely earn money overnight as volatility will contract sharply after earnings release and premiums will drop, letting you buy to close cheaper.

it's 4 trades though, so a but harder to execute. I drop price a nickel or more from the mid price to help it get filled. make sure there's volume at the strikes you're trying to fill

 

[hoosierdoc]

I did AMD the day after earnings because it didn't move at all with earnings. normally ICs like high IV as it makes money on theta decay AND IV contraction. can do them around earnings or other announcement to get the IV contraction and make money without waiting for theta decay, which is a slow grind.

I put the trade on Jan 28 for $3.35, as of market close on 5th it's $2.05. I should close it. 39% gain in 8 days and stock hasn't moved, or a 12% return on capital ($1000 collateral needed for $10 spread). that's 540% annual

I did a 19 Mar 67.5/77.5/100/110, stock was around $89 and it's there now. I haven't made that much on theta, it's only $9 right now. most of that gain is IV contraction I think

 

[CHCRandy]

Man Doc, I like these. I just need to learn a little more about it. I will review your posts and do mock trades and see if I can figure out all that you said. So what trades like these are you in right now?

I would love to get brave enough to put lots in these trades. Could be amazing. Options are really starting to get popular with retail traders. For years there were not many of us buying them, now my entire room buys options.

Man, thanks for all your information and thoughts on this stuff. That was very helpful, what you posted.

 

[hoosierdoc]

I have one on BYND with earnings coming in. 110/140/210/240. the group I'm in did them as a jade lizard but I didn't want the buying power hit. $7.15 credit

NVDA 19 Mar 480/490/620/630 $3.15

SNOW 19 Mar 220/250/410/420 $6.70

snow I went wide just to reduce buying power hit. hoping to do one on ACB in AM

 

[hoosierdoc]

beyond excited about SENS.

the pot stocks fell apart. I did a lot of puts on SNDL and got assigned. so I'm selling calls Tuesday.

 

[Libertarian01]

Well, I am disappointed.

I open the TD Ameritrade account, I get some money put into it, only to find out I cannot do what I want to do...

My goal is simple, have money taken out of my checking account every time I am paid, put it into an investment company, automatically apply that money equally amongst a list of stocks I have chosen. That's it.

However, I am not putting in enough money to buy one (1) of every stock, so what I want will require buying fractions of stocks. I finally come to find out TD Ameritrade won't allow me to do that. So now I must do more research into who will allow me to purchase fractional shares and go with them.

I was so looking forward to doing this in one easy step. Alas, my lack of research has bitten me. Live and learn.

Regards,

Doug

 

[hoosierdoc]

download the "think or swim" app to your phone, or their regular app. easy as pie to make trades. it's not automatic but not that difficult. sorry it didn't work as you had hoped.

I got my email about my SNDL being assigned. boo.

I'll be selling puts on SBE Tuesday morning

 

[hoosierdoc]

OOF. what a day

 

[smokingman]

I am making a few changes in the morning.

I am picking up....

TZA
SPXU
SQQQ
SDOW
EDZ
and TWM. Those are cheap insurance at the moment.

The way I see the markets at the moment is like an office building.
I was late getting back from vacation but did notice the burning smell when I got to my office, almost like toner was burning.
I had quite a bit of work to catch up on. This made me late for lunch and most have already gone out to eat.
As I leave for lunch I notice the office beside mine is on fire,I think it was the printer. I quickly gather my things and head out. It looks like the fire suppression system is not working as the sprinklers have not kicked on. They may, but I pull the alarm on my way to lunch anyway.

I wonder what the office will look like after lunch.



Someone on INGO made this a while back.

I had a great day.

If the market falls 10% I will make roughly 2000 times my initial investment.I am only up 20% from my initial investment in the above stocks as they went down after I purchased them daily until Wednesday and Thursday,but I was in the right place at the right time for a down turn.

SQQQ for example I purchased at $12.18,and it had hit 162.15 last year when the market was down. It could do that or higher if we have a real drop.

 

[hoosierdoc]

are you overall leveraged for a down turn, or just have positions that benefit from that direction?

with such a bull market it's hard to be betting against it. I just need to not bet for it so hard

 

[smokingman]

are you overall leveraged for a down turn, or just have positions that benefit from that direction?

with such a bull market it's hard to be betting against it. I just need to not bet for it so hard

I am not using leverage personally. However, every ETF on that list does(most 3x a few 2x). I understand exactly what i can lose, and that is my initial investment. The only way I lose 100% of that is if an ETF closes. Even with over a year of positive stocks, none of those ETFs went under.

I like letting the EFT leverage, buying it cheap, and getting the benefit of 3x leverage without risking more than my initial investment.

I consider those ETFs insurance against a steep downturn as well,and not just a bet there will be one.

 

[Kirk Freeman]

Still rolling on with the SEPs-American, T. Rowe, BlackRock, Chase. That Chase EFT fund (5142) is knocking it out of park. It is Jacks or better to open, but closed my eyes and did it. Paying off.

I have a bridge fund (TOD) now as in my line of work and position I cannot "walk away" there will be a gradual spooling down. So my bridge (aggressive American portfolio fund) is my bleed down until total decommissioning of me.

I am a "fire and forget kind of guy" (send the check in, forget about it, throw away the quarterly reports) but still do limited hands on stuff. Continue to speculate in cryptocurrencies (which I should look at more, lol), doing quite well, may be an early retirement (well, who knows).

 

[AtTheMurph]

A good read

 

[rooster]

Anyone reading what doc is doing but have no idea how to start? Get a TD ameritrade account like he recommended and then go to the learning part. There are dozens of hours worth of options education. Additionally you can start with a paper trade account on THink or swim. Let’s you test your strategies. I still use it to run some testing on new or more complex strategies

 

[CHCRandy]

I had the best day I have ever had in the stock market on Wednesday, up over 10%. This is not to brag but to educate. I made more Wednesday than I made in a year when the wife and I married in 1987. Now for the bad news, I lost more Thursday and Friday than I made in a year when the wife and I got married. Yeah, that's right, I lost everything I made Wednesday on Thursday and Friday. Still up about 35% for the year but was up almost 50% for the year on Wednesday.....but man this market can sure humble you. SO this week I had my biggest winning day ever followed by my 2nd and 3rd worse losing days ever. Roller coaster ride really messes with my head!

Sometimes I get to the point I just want to let someone else deal with it. I get frustrated.....but then I suck it up and come back. I just don't know how to quit while ahead. This can tear up your head if you let it.

The bad part is I don't know how to fix it. My problem started when I went back and looked at some stocks I have owned the last year. I had SNDL at .25, BIOL at .35, IBIO at .35, SUNW at .80, CHEK at .30.......and I owned 10's of thousands of shares of each of them. I sold everyone of them when I was up between 30-50%. Makes me sick....SNDL alone I had 25,000 shares at a quarter, sold at 45 cents and then it goes to $4! IBIO went to $6, SUNW....is $15. Now my problem is I hate to sell and lock in profits out of fear of them running 1000% and me missing it again.

I have to change my thinking....and let bygones go bye bye. But not sure how to do that......

 

[CHCRandy]

With people starting new accounts.....keep in mind you can open a Roth account and avoid taxes on your gains. The downside is you can't get your money until you are 59 1/2 years old....without penalty fees. And you can't short stocks in a Roth account.....if you like to short.

 

[Pepi]

With people starting new accounts.....keep in mind you can open a Roth account and avoid taxes on your gains. The downside is you can't get your money until you are 59 1/2 years old....without penalty fees. And you can't short stocks in a Roth account.....if you like to short.

Don't you have to wait 5 years before you can draw from it?

 

[hoosierdoc]

Wednesday and Thursday were bad, gained half of it back Friday. it's sad when you add a cash infusion and your account ends up lower

I have 50% of my account value in cash. my stock buying power is 90% of that, options buying power 45%. so I like to think I'm getting closer to appropriate sized trading and am getting to where a huge drop won't wipe me out.

I have way too many positions now, like 35. I should drop it to 20 or so and time my plays more strategically.

heavily invested in SENS. they are presenting at an investor conference this week. hoping for update on fda approval and data on 365 day implant