The fancy equity derivatives vol arb thread... a.k.a. Options trading extravaganza

[Trey3216 15343]

25 minutes ago, bluto said:

Need input/help on some Boeing options and selling calls as a hedge like mentioned above. Really just the trading mechanics of what happens in my acct.

Ba currently $210ish

I own Feb 12 $197.5 strike $7 premium, 3 contracts

If I sell 3 contracts for same day, $220 strike at say $3 premium I reduce my base by 900. If it doesn’t strike 220 then I pocket. If it does and I’m forced to fill, does that mean I have to hold and exercise my 197.5 strikes or will my platform just auto cancel them out? What do I need to do?

If it weren’t $200 shares I would just play around but don’t wanna fox with $60k

It basically means that you're gains are capped at $18.50/share.  Which is perfectly fine.   This is a bull/call spread, and exactly like the example I posted about above.  

 

IF the stock ran up over 220, then you are capped in on your gains.  If the buyer of the 220 exercised the call, you'd probably get an alert and your brokerage would likely close out your 197.50 to zero out the transaction.  This is a smart way to buy into a stock that you have confidence in but don't want to have too much MAR (money at risk) on the table.  

[52-80 19142]

53 minutes ago, Wally Fairway said:

I'm not a smart man (read that a Forrest Gump's voice)

But can someone explain to me why my long term SPY calls  (8 months and 11 month $400 strike) have gone down the last 2 days, while the SPY has gone up. I know market disconnect, but it just seems weird to me. I've held both of these calls for about 6 months, trying to leverage up my returns on a core SPY holding and to offset risk when I sell puts,, and they have done very well (both up over 100%) but is the options market telling me that it's time to sell (because why else would near money calls go down), or just write it off as a short-term glitch in the matrix?
I know it isn't a direct connection, but it just seems off to me - maybe I'll call Neo, or Mr. Anderson for an answer) 

1. volatility itself dropped steadily over the last week (since the GME thing shook everything up), so that dragged down the extrinsic value component of your option

2. theres little volume for those 2 specific contracts, so the pricing quote is imperfect

basically this is all short term effect.  if your long term view on spy is bullish, its an overall good bet.  just hopefully you didnt originally buy the option during high-vol environment.

[Froghorn717 42]

48 minutes ago, Wally Fairway said:

I'm not a smart man (read that a Forrest Gump's voice)

But can someone explain to me why my long term SPY calls  (8 months and 11 month $400 strike) have gone down the last 2 days, while the SPY has gone up. I know market disconnect, but it just seems weird to me. I've held both of these calls for about 6 months, trying to leverage up my returns on a core SPY holding and to offset risk when I sell puts,, and they have done very well (both up over 100%) but is the options market telling me that it's time to sell (because why else would near money calls go down), or just write it off as a short-term glitch in the matrix?
I know it isn't a direct connection, but it just seems off to me - maybe I'll call Neo, or Mr. Anderson for an answer) 

when did you buy these?

ive had calls go up when the underlying goes down because implieds were getting bid higher .. just last week i watched some strikes in GME puts GO UP while the underlying was going up 100% - thats because IV was getting bid thru the roof -  its also why i missed the short side of the trade because puts were way too expensive so much so that a few strikes lost money even though the name was falling. 

 

also be very careful going short gamma (selling calls/puts) - may sure you have plan 

and btw what happened in GME happens ALL the time - obviously not to that extreme but when you add in variance swaps and dealers short enormous amts of gamma in index derivs - derivs will pin SPX levels

:smoke bomb:

 

[Hank_Hill 18788]

42 minutes ago, Hank_Hill said:

Similarly to Wallys question,why is a 02/19 GME $49 put I bought yesterday down 15% today while GME is down 9%?

Well, it's up now

[52-80 19142]

36 minutes ago, Hank_Hill said:

Similarly to Wallys question,why is a 02/19 GME $49 put I bought yesterday down 15% today while GME is down 9%?

volatility.  always consider volatility before entering a trade, whether you buy or sell option). 

volatility drops (because gme more stable now) --> less uncertainty --> value of option lowers (again think of insurance analogy)

theta erosion is at 2 weeks is not as bad as 1 week, but still bad'ish. 

in this case, both of them eroded your option value quicker than the price change of the underlying.

 

in other parlance, you got fucked by vega and theta

[Bozo_Casanova 26432]

Now this thread here is my jam. I had 3 resolutions heading out of NYE:

1) Don't wake up to a fucked up garage door again
2) Get back to trading options on the regular

Back when I used to trade daily I was almost always a premium seller, taking the side of the house on low probability positions. I generally sell vertical put spreads  and sometimes naked puts on equities that I'm willing to own and then sell covered calls to lower my basis until called away.  I almost never roll trades and I almost never speculate on direction. I tend to sell high volatility with time on my side and sell the contraction with a little decay and get out early. It's boring, it's predictable, and it works. If you have time to do it every day you can win a lot, but you have to grind. Going forward I plan to mix in some speculation because it's fun. 

Oh, and I use tastyworks because their visualizations and pricing are user friendly. 

Anyway, subscribed

Edited February 4, 2021 by Bozo_Casanova

[Bozo_Casanova 26432]

@52-80 We seem to have the same strategic perspectives, few questions on your preferences:
1) Since you're also a tastyworks guy, what's your usual POP% on an opening trade?
2) Most traders who adopt our style of trading concentrate on a few highly liquid, high volume equities. For example, when I was trading actively I usually worked in about 5-6 at a time that I really paid attention to and only got into trouble when I ventured out. How many do you trade?
3) Do you take multiple positions on the same underlying equity with different time horizons or run one trade at a time per issue?
4) What's your preferred price range for the underlying?
5) How much of your trading account do you have at risk in a trade at any given moment?

6) Ideally how far out on expiration do you sell premium, if you can? 

7) Finally, what are the parameters of your ideal trade?

EDIT - one more - what's your approach to the ex-dividend date?

Edited February 4, 2021 by Bozo_Casanova

[52-80 19142]

3 minutes ago, Bozo_Casanova said:

@52-80 We seem to have the same strategic perspectives, few questions on your preferences:
1) Since you're also a tastyworks guy, what's your usual POP% on an opening trade?
2) Most traders who adopt our style of trading concentrate on a few highly liquid, high volume equities. For example, when I was trading actively I usually worked in about 5-6 at a time that I really paid attention to and only got into trouble when I ventured out. How many do you trade?
3) Do you take multiple positions on the same underlying equity with different time horizons or run one trade at a time per issue?
4) What's your preferred price range for the underlying?
5) How much of your trading account do you have at risk in a trade at any given moment?

6) Ideally how far out on expiration do you sell premium, if you can? 

7) Finally, what are the parameters of your ideal trade?

EDIT - one more - what's your approach to the ex-dividend date?

yes i think we're members of the same school

1. typically 75% for the short puts and 90%+ for short calls.  more often i go by feel, and the numbers break down for some of the meme symbols i trade anyways.

2. i think 10-15 is optimal.  started with 5-10 and scaled up as i got more confident and allocated more capital to the account.  around 20-25 now which is too many to manage.  stock watchlist grew from 50 to about 100.  yes, liquid options are a big requirement. 

3. multiple positions as a consequence, not as intent.  some stuff like spce, uber, twtr, and the airlines, ive found to be really cyclical.  so i start with short call or short put, then when the stock runs the other way, i open the opposite position, effectively legging into a straddle.  occasionally will do calendars and diagonals, but prefer to stick to a few strategies.

4.  30-100 is a great range.  doesn't require too much capital, doesn't require sacrificing too much commission or being stuck with too many contracts.  of course anything that costs more one can also run a spread/vertical to lower the requirement.

5.  i use 65-85% of total buying power spread over atleast 10 trades to dilute the risk.  ideally theyre in different sectors.  and absolutely absolute minimize short calls.

6.  set up starts at 30-45 days as per tastyworks philosophy.  but i look at expiration chain for best IVx.  final determination comes down to liquidity/volume, which is usually the Monthly.

7.  a typical setup would be like UBER Mar 19 50P, 1.64cr against 500BPr, 75%  PoP.  SPCE is even sweeter than that.  I'll go as low as 0.75cr against 500BPr

8.  high-div stocks are very stable and uninteresting for options selling or speculative longs, so basically they don't matter.  used to play AT&T and Coca Cola and etc, but now prefer things like SQ, CRSR, etc

[Bozo_Casanova 26432]

I've never sold a call short. What's your rationale for that?

Edited February 4, 2021 by Bozo_Casanova

[52-80 19142]

8 minutes ago, Bozo_Casanova said:

I've never sold a call short. What's your rationale for that?

Mostly greed. 

If I have a an existing short put and the stocks jumps up 10%, and the stock has a rationalizable ceiling (Boeing, Airlines, Cruiseliners, Fashion retail during COVID), I'm tempted to sell a call just to nip some $$ for the inevitable deflation, because it doesn't suck any more buying power.

I used to get clapped on 1 of those trades which almost wipes away gains from the other 9, so new play is this:  sell under same condition as above, but strikes atleast 40-50% away, with <2 week expiration. 

Yesterday opened SPCE 70C for 0.42cr per contract, expiring Friday.  I followed that stock long enough to know that it has all the meme power in the world... but still not enough to propel it over 70.

Other active short call now is TWTR Feb 12 65C

[Continental Op 3934]

Sitting at about 100% return on these DIS calls right now.  

Edited to add: I am an idiot.  Earnings call isn't until next Thursday.  

Edited February 4, 2021 by Continental Op

[Dbeasy 15040]

9 hours ago, 52-80 said:

 

riskiest to least:

• selling naked calls. also known as the widow-maker.  easy answer is dont do it.
• selling naked calls. when you already have a short put position, you can sometimes open a naked call without broker requiring more Buying Power (essentially you leg into a short straddle/strangle).  its a greedy play, try not to do it.
• selling calls covered by long calls. a.k.a.poor man's covered call , like @veritas aequitas mentioned above.  it just limits your upside.  if stock explodes upwards, your long calls gain in value.
• selling calls covered by shares; safe.  also limits your upside.

when i sell calls, i do it at a strike quite far out the money (2 standard deviation or 50% away). 

these 2 conditions must be simultaneously met:  (1) the stock jumps and (2) volatility spikes. 

this allows you to capture the inflated premium.  if those conditions arent met, the premium is really just peanuts compared to the risk.

 

 

 

 

 

 

Thank. I may not be fully understanding. Your first post mentioned your preference for selling call options, but this summary says never do that. Are you saying that while your preference is selling call options, you also do another trade in parallel to ensure your not too exposed? 

[52-80 19142]

3 minutes ago, Dbeasy said:

Thank. I may not be fully understanding. Your first post mentioned your preference for selling call options, but this summary says never do that. Are you saying that while your preference is selling call options, you also do another trade in parallel to ensure your not too exposed? 

Can you point me to the post? I hope to have written nothing that can be misinterpreted.  It is very dangerous. 

Selling naked calls is similar to short-selling stock: limited profitability but unlimited loss potential, and it happens quicker.

Most brokers do not allow selling naked calls with basic (level 1/2) options approval.  I prefer and recommend selling puts as a far safer strategy.

If selling naked calls, set the strikes really really high/safe.  Or combine it by buying a call (“in parallel”) which effectively neutralizes/offsets the risk.   (Again this is the beautiful flexibility of this game)

Depending on the quantity and strike and expiration of the long call, this strategy called a vertical or spread or calendar or diagonal or ratio....

 

 

 

[bluto 4912]

Sonovabitch, tried executing the vertical call and was told I don’t have permission. : |

[Dbeasy 15040]

8 minutes ago, 52-80 said:

Can you point me to the post? I hope to have written nothing that can be misinterpreted.  It is very dangerous. 

Selling naked calls is similar to short-selling stock: limited profitability but unlimited loss potential, and it happens quicker.

Most brokers do not allow selling naked calls with basic (level 1/2) options approval.  I prefer and recommend selling puts as a far safer strategy.

If selling naked calls, set the strikes really really high/safe.  Or combine it by buying a call (“in parallel”) which effectively neutralizes/offsets the risk.   (Again this is the beautiful flexibility of this game)

Depending on the quantity and strike and expiration of the long call, this strategy called a vertical or spread or calendar or diagonal or ratio....

 

 

 

Ah I misinterpreted post #1. When I saw that you prefer to sell options, I didn’t realize you weren’t referring to selling calls except in the scenarios you just described. Got it. 

[Tailgate 3021]

Damn...an options thread now...I need more monitors!

[Trey3216 15343]

3 hours ago, Tailgate said:

Damn...an options thread now...I need more monitors!

If Gillette only made tv’s instead of 5x razors.  

[Lobwedgephil 1139]

Now we are talking, been trading options on and off for a while. But really got back into it during lockdown. Subscribed. 

[52-80 19142]

8 hours ago, Tailgate said:

Damn...an options thread now...I need more monitors!

real daytraders be like

 

9 hours ago, bluto said:

Sonovabitch, tried executing the vertical call and was told I don’t have permission. : |

which broker?  need level 2 for spreads.  only way to play amzn and tsla without dropping 20-60g per position

[bluto 4912]

which broker?  need level 2 for spreads.  only way to play amzn and tsla without dropping 20-60g per position

Tda. I need to check on the web version what level I am.

[4thgenhorn 38]

I dig this thread. I’ve been dabbling for a number of years and COVID has definitely accelerated the number of options trades I do. I’d say I’m much more of a gut feel and chartist than a true greek symbol quant. Primarily calls and covered calls, not as much on Put side. 
 

today I’m long calls NVDA, CRWD, PYPL, CRM, DD, WFC. All expire before end of March. I’m short covered NVDA, QS, and CRWD. 
 

one thing I’ve found annoying is unloading a call spread when close to expiration, especially when short call is OOTM. I feel like I’m not getting a good price for the whole distance of the spread. So lately my short call will expire one week before long call...makes it easier to sell. 
 

Another thing, purely driven by greed, is I buy the call and wait a bit to sell the covered call in the vertical. My hope is equity goes up 1-2% and then I write. Of course downside risk is a bit more. 
 

Trade idea I’m looking at: DKNG covered calls. I’m long stock, and looking one month out. $71 calls pay a great premium imho.  Probably cause of the super bowl. 
 

 

[bluto 4912]

Tda making me jump through hoops for the full margin approval, hopefully early next week. Got a few big win calls I’d like to put into the vertical.

[52-80 19142]

stuff to check out for Monday, if prices on these dont go nuts during pre-market

 

long LEAP calls (leap = far-dated expiration), all 2022 expiration:

AAPL - 125C or 150C

CRM - 230C or 250C

TSM - 150C

TDOC - 190/220C spread (because the single option is quite expensive)

ELY - July 32C if youre a golfer.

 

short puts, almost all March 19th expiration:

CGC - 35P (or 35/35P spread if you dont want the margin hit)

AI - 130P or 130/120P spread

DIS - 160P (or 155 or 150 if you are more conservative)

CRSR - 35P (or 35/25P spread due to margins)

AYX - 110/105P spread

CSCO - 45P

IRBT - 90P (maybe long March 135C as a sort of expensive lotto ticket... this stock has high short interest so could be target for a squeeze [it already kinda was])

SONOS - 25P (i like the company but stock is kinda slow)

LYFT - 47.5P

[Continental Op 3934]

On 2/7/2021 at 8:06 AM, 52-80 said:

 

DIS - 160P (or 155 or 150 if you are more conservative)

 

I have no idea what to make of this run up.  It's happening on weak volume and there's nothing other than the earnings call coming up driving it as far as I can tell. I'm sitting on a 250% gain on my calls and am really tempted to take my ball and go home at this point. 

[Trey3216 15343]

3 minutes ago, Continental Op said:

I have no idea what to make of this run up.  It's happening on weak volume and there's nothing other than the earnings call coming up driving it as far as I can tell. I'm sitting on a 250% gain on my calls and am really tempted to take my ball and go home at this point. 

Probably not a bad idea.  Oftentimes, you'll have a runup into the conference call and either a mild selloff (even when they beat expectations) or flat trading.  Not to mention you're going to have a serious implied volatility collapse.  

[52-80 19142]

14 minutes ago, Continental Op said:

I have no idea what to make of this run up.  It's happening on weak volume and there's nothing other than the earnings call coming up driving it as far as I can tell. I'm sitting on a 250% gain on my calls and am really tempted to take my ball and go home at this point. 

sell-to-close the call.  realize the gain.  sell-to-open the put.  after earnings, you can buy-to-close the put for a gain (probably).  and wherever stock price goes, you might (probably) be able to buy the same call again for the same price....if not discounted.

[Chapo 104]

I bought Feb 19 TSLA 980/1000/1020 butterfly today for $40.  It is a TSLA YOLO for the poors

 

[bluto 4912]

Anybody take a look at micro strategy’s option chain? It kinda got blown up today GameStop style

[52-80 19142]

7 hours ago, bluto said:

Anybody take a look at micro strategy’s option chain? It kinda got blown up today GameStop style

i was trading it around 300 and it was very hard to get orders filled because of low volume.  also insanely expensive now, unless you play spreads, which makes it even harder to get fills.  mara/riot might be the easier play. 

[PenelopeWitherspoon 19100]

I am cutting my teeth on a few call options.  All are stocks I would be down with buying more of.  Picked longer term options with high vols.  We shall see.

[CooterBrown 18002]

Option dumb ass here.

Here's something basic that I don't understand.

An example:

I buy a call option for $1 premium with a strike price of $100.  I pay $100 for the contract (100 shares x $1).

The stock is in the money at $105 prior to the expiration date.

How do I collect profits?  Do I have to have to exercise the option contract and pay the full $10,000 (100 shares x $100) out of pocket and then sell it at $105 (or the current price) to get $500 (100 shares x $5) profit?  I've watched a ton of YouTube videos on how options work but none of them ever explain how you actually collect your profit.

 

[zzz 199]

21 minutes ago, CooterBrown said:

Option dumb ass here.

Here's something basic that I don't understand.

An example:

I buy a call option for $1 premium with a strike price of $100.  I pay $100 for the contract (100 shares x $1).

The stock is in the money at $105 prior to the expiration date.

How do I collect profits?  Do I have to have to exercise the option contract and pay the full $10,000 (100 shares x $100) out of pocket and then sell it at $105 (or the current price) to get $500 (100 shares x $5) profit?  I've watched a ton of YouTube videos on how options work but none of them ever explain how you actually collect your profit.

 

Just sell the option(s) back. There will be a bid/ask just like when you bought it. 

[zzz 199]

I should clarify, when you bought the option, you 'bought to open' a contract. You will simply 'sell to close' your option contract. No need to exercise the option and then sell the shares.

 

[Dbeasy 15040]

Now explain what happens when options expire. That’s a little more tricky. 

[52-80 19142]

21 minutes ago, Dbeasy said:

Now explain what happens when options expire. That’s a little more tricky. 

most brokers will automatically exercise options in a way most advantageous to the client, unless otherwise instructed.

if there are any liquidity issues, they will also take automatic actions to protect themselves.

 

e.g., you hold an option a call option that expires in the money (i.e. it has intrinsic value), broker will exercise the option and deliver you the shares.  if your account cannot afford the shares, broker will sell them at market price and deliver you the proceeds, probably charging you a slight interest/fee on top.

[zzz 199]

34 minutes ago, Dbeasy said:

Now explain what happens when options expire. That’s a little more tricky. 

Bought a call

- Expires out of the money: worthless (you lose any premium you paid).

- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you bought. You make money by selling at market to close the long position (buy low, sell high) minus the premium you paid.

Sold a call

- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).

- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you sold. What happens is your broker buys the shares at the current market price and sells them to the other party at the strike price. You eat the difference. Risk is theoretically unlimited. You keep the premium you collected.

Bought a put

- Expires out of the money: worthless (you lose any premium you paid).

- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you bought. You make money by buying at market to close the short position (sell high, buy low in this case) minus the premium you paid.

Sold a put

- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).

- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you sold. Risk is limited to the share price reaching $0. You get to keep the premium paid to you.

Edited February 9, 2021 by zzz
added about keeping/losing premium on ITM options

[52-80 19142]

55 minutes ago, CooterBrown said:

Option dumb ass here.

Here's something basic that I don't understand.

An example:

I buy a call option for $1 premium with a strike price of $100.  I pay $100 for the contract (100 shares x $1).

The stock is in the money at $105 prior to the expiration date.

How do I collect profits?  Do I have to have to exercise the option contract and pay the full $10,000 (100 shares x $100) out of pocket and then sell it at $105 (or the current price) to get $500 (100 shares x $5) profit?  I've watched a ton of YouTube videos on how options work but none of them ever explain how you actually collect your profit.

 

as the clock ticks down towards the expiration, the extrinsic value (the surplus value representing uncertainty*time) goes to zero, and the price of the option reflects its true intrinsic value (strike-stock).

 

this makes sense intuitively.  if option has $5/share advantage, but theres virtually no time left, why should it be valued at pennies more than $5 (or, rather, 500$ for 100-share contract).

 

so you can sell it to close, for $5.04, $5.03 or whatever the price is.  or let you broker exercise and you reap the realized option.

[bluto 4912]

Bought a call
- Expires out of the money: worthless (you lose any premium you paid).
- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you bought. You make money by selling at market to close the long position (buy low, sell high) minus the premium you paid.
Sold a call
- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).
- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you sold. What happens is your broker buys the shares at the current market price and sells them to the other party at the strike price. You eat the difference. Risk is theoretically unlimited. You keep the premium you collected.
Bought a put
- Expires out of the money: worthless (you lose any premium you paid).
- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you bought. You make money by buying at market to close the short position (sell high, buy low in this case) minus the premium you paid.
Sold a put
- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).
- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you sold. Risk is limited to the share price reaching $0. You get to keep the premium paid to you.

Is it an actual obligation requirement if in the money or can you still reject to exercise the option?

[CooterBrown 18002]

1 hour ago, 52-80 said:

as the clock ticks down towards the expiration, the extrinsic value (the surplus value representing uncertainty*time) goes to zero, and the price of the option reflects its true intrinsic value (strike-stock).

this makes sense intuitively.  if option has $5/share advantage, but theres virtually no time left, why should it be valued at pennies more than $5 (or, rather, 500$ for 100-share contract).

so you can sell it to close, for $5.04, $5.03 or whatever the price is.  or let you broker exercise and you reap the realized option.

I assume you can sell to close anytime prior to the expiration. Say it's in the money two weeks prior to expiration and you like the profit margin, you can sell to close.  Is that correct?

[Trey3216 15343]

9 minutes ago, CooterBrown said:

I assume you can sell to close anytime prior to the expiration. Say it's in the money two weeks prior to expiration and you like the profit margin, you can sell to close.  Is that correct?

That is correct (or buy to close if it's was sell to open).  

[zzz 199]

37 minutes ago, bluto said:

Is it an actual obligation requirement if in the money or can you still reject to exercise the option?

I believe you are correct. You still have the option to exercise or sell at expiry, although I've never tried that.  

[52-80 19142]

12 minutes ago, CooterBrown said:

I assume you can sell to close anytime prior to the expiration. Say it's in the money two weeks prior to expiration and you like the profit margin, you can sell to close.  Is that correct?

Trades just like a stock. 
 

The only added wrinkle is that you must watch for open interest and trading volume.  
 

Certain contracts have very shitty liquidity, meaning you get very out-of-whack price or worse might be stuck in a contract that’s difficult to offload. 

[52-80 19142]

44 minutes ago, bluto said:

Is it an actual obligation requirement if in the money or can you still reject to exercise the option?

Contracts gives the right, not an obligation. You are free to ignore the right and essentially throw away the profitable intrinsic value  call your broker and instruct them to not auto-exercise

[PenelopeWitherspoon 19100]

So I have 5 $3 Call options in SNDL that I bought for $0.10 (so total capital in was $50).  The enpiry is 2/19, and those are currently sitting with a $340 gain (it has been as high as $390 today).  

What says the surl mavens.  When should I cash out given that SNDL is going gangbusters at the moment.

I have held out that if I can get $1, I will sell, no questions.  But over $300 in total gains is nice as well....

Decisions, Decisions, Decisions.

[PenelopeWitherspoon 19100]

So I have 5 $3 Call options in SNDL that I bought for $0.10 (so total capital in was $50).  The enpiry is 2/19, and those are currently sitting with a $340 gain (it has been as high as $390 today).  
What says the surl mavens.  When should I cash out given that SNDL is going gangbusters at the moment.
I have held out that if I can get $1, I will sell, no questions.  But over $300 in total gains is nice as well....
Decisions, Decisions, Decisions.

I put in a sell order for $1 and it just sold. So not a bad almost 500% in a day and a 900% gain in a week. That's 450 earnings. I believe my goal each week is 500-1000. So, yeah. Also, still long SNDL stock.

[52-80 19142]

24 minutes ago, PenelopeWitherspoon said:

1 hour ago, PenelopeWitherspoon said:

So I have 5 $3 Call options in SNDL that I bought for $0.10 (so total capital in was $50).  The enpiry is 2/19, and those are currently sitting with a $340 gain (it has been as high as $390 today).  
What says the surl mavens.  When should I cash out given that SNDL is going gangbusters at the moment.
I have held out that if I can get $1, I will sell, no questions.  But over $300 in total gains is nice as well....
Decisions, Decisions, Decisions.

I put in a sell order for $1 and it just sold. So not a bad almost 500% in a day and a 900% gain in a week. That's 450 earnings. I believe my goal each week is 500-1000. So, yeah. Also, still long SNDL stock.

just for you, sell FTCH March 19th 60P.  current $4.50+ per contract

[52-80 19142]

On 2/7/2021 at 3:06 PM, 52-80 said:

stuff to check out for Monday, if prices on these dont go nuts during pre-market

 

long LEAP calls (leap = far-dated expiration), all 2022 expiration:

AAPL - 125C or 150C

CRM - 230C or 250C

TSM - 150C

TDOC - 190/220C spread (because the single option is quite expensive)

ELY - July 32C if youre a golfer.

LOSER

short puts, almost all March 19th expiration:

CGC - 35P (or 35/35P spread if you dont want the margin hit)

GREAT

AI - 130P or 130/120P spread

GREAT

DIS - 160P (or 155 or 150 if you are more conservative)

GOOD

CRSR - 35P (or 35/25P spread due to margins)

GOOD

AYX - 110/105P spread

NEUTRAL-LOSER

CSCO - 45P

IRBT - 90P (maybe long March 135C as a sort of expensive lotto ticket... this stock has high short interest so could be target for a squeeze [it already kinda was])

BIG WINNER

SONOS - 25P (i like the company but stock is kinda slow)

WINNER

LYFT - 47.5P

WINNER

 

[Dbeasy 15040]

On 2/9/2021 at 2:50 PM, zzz said:

Bought a call

- Expires out of the money: worthless (you lose any premium you paid).

- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you bought. You make money by selling at market to close the long position (buy low, sell high) minus the premium you paid.

Sold a call

- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).

- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you sold. What happens is your broker buys the shares at the current market price and sells them to the other party at the strike price. You eat the difference. Risk is theoretically unlimited. You keep the premium you collected.

Bought a put

- Expires out of the money: worthless (you lose any premium you paid).

- Expires in the money: you are obligated to sell 100 shares at the option strike price for every option you bought. You make money by buying at market to close the short position (sell high, buy low in this case) minus the premium you paid.

Sold a put

- Expires out of the money: worthless (you keep the premium someone paid you when they bought the option).

- Expires in the money: you are obligated to buy 100 shares at the option strike price for every option you sold. Risk is limited to the share price reaching $0. You get to keep the premium paid to you.

So just so I’m clear, at expiration will the broker perform all of the actions for you, including the buying or selling of the shares at market price to close out the complete transaction, or will they only execute the option part of the trade and Its up to you to manually so the rest? This is why I’ve never held to expiration. I was never quite sure what the broker did automatically or not. 

[CooterBrown 18002]

My old eTrade account has paper trading so I'm testing the waters there.  I bought a call on SNDL (per Penelope mentioning it a few posts up).   2 March 19th contracts @ $1.10 with a strike price of $3.50.  Within a few minutes, I tested selling it to make sure I understood, and it said if I sold at that moment I would net $400+.  A few hours later it looks like it's down in the red $6 since purchase.

It never approached the $3.50 share price so how could it have ended up in the money? Was it because people were willing to pay more than the $1.10 I paid for the contract?

 

 

[bluto 4912]

Xom
35 contracts
$50 strike, 2.27 premium
March 26 exp

Bought during today’s dippage, not expecting to need more than a few days to turn em with this market bouncing around.