Anatomy of a fun 2-day trade (AMC +$60k)

Were you short the AMC breakdown on the daily? (if no then think about your process)

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ChipShotTrader said:
You like Tarantino? I can put you in touch
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Believe it or not, here are some famous persons I have already met in New York City (in no particular order):

Woody Allen.
Faye Dunaway.
Peter Falk (I still have his autograph, most charming gentleman).
Di Caprio .
David Bowie.
Christian Slater.
Gerard Depardieu.
Catherine Deneuve.
Rod Stewart (briefly).

Got to go, friends at the door.
Take care.
 
Tradex said:
Believe it or not, here are some famous persons I have already met in New York City (in no particular order):

Woody Allen.
Faye Dunaway.
Peter Falk (I still have his autograph, most charming gentleman).
Di Caprio .
David Bowie.
Christian Slater.
Gerard Depardieu.
Catherine Deneuve.
Rod Stewart (briefly).

Got to go, friends at the door.
Take care.
More...

Peter Falk, good guy...

Ah, Christian Slater. Did you know that he was very rude to a waitress, and back home in Malibu, he was duct taped to a chair. It was pretty nuts (solid job). When the police came, he was so duct taped, they laughed. They could not believe it was Christian Slater. He was then unbounded. Not that I would ever, ever know about that night...

PS. Christian remembers that night in Malibu, I know. Feel free to ask him :)
 
IronFist said:
@Dustin thanks for replying to my quesitons.

Dumb question, does that mean a 16 cent 48 put?

Why did we start talking about movies?
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Exactly. Focusing on this (the right platform):
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IronFist said:
@Dustin thanks for replying to my quesitons.

Dumb question, does that mean a 16 cent 48 put?
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Not a dumb question, it was my bad, 16c can be interpreted as call option strike price 16 :)

As Dustin said, we're in a golden time currently for taking these high-probability trades, the target for profitability is so wide

HFT's are either not trading these meme stocks or letting them trend longer on daily moves

1c spreads. I'd trade these on Fridays they expire, i.e. weekly options

$25K capital, position size $5K ride a directional move that has started for ~40 cents (or a double of risk capital - 16 cent option to 32 cent option) and call it a day

If you get whipsawed, cut losses at 50% loss (per Dustin method) 8 cent option price and ride the other direction, switch to calls if initially had puts and maybe see if you can still hit your profit target of $5K/day either riding longer

If you keep getting whipsawed, maybe reassess your trading/charting method. I don't know how to do charts, so I go by price action and sector/market movement for entry/exit confirmation (i.e. if Nasdaq or S&P 500 reverses direction). On AMC, I'd watch other meme stocks if there's value to see any correlation and/or leaders

I can't trade, have enough tax problems for next year but enjoy reading this thread
 
Dustin,
Is there an optimal time to exit these on Friday? I know they settle on Sat, but with Fri being last trading day, can you ride these into the close? Or cover earlier? I find it odd that these have any value at expiry as you get close to the close. Even if in the money, I would assume most traders don't have the capital to convert the options.
 
Arnie said:
Dustin,
Is there an optimal time to exit these on Friday? I know they settle on Sat, but with Fri being last trading day, can you ride these into the close? Or cover earlier? I find it odd that these have any value at expiry as you get close to the close. Even if in the money, I would assume most traders don't have the capital to convert the options.
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Yes, the optimal time is when the stock hits your target. HFT will price these to perfection throughout the day, and they will quickly go to 0.00 at the close if otm.
 
johnarb said:
Not a dumb question, it was my bad, 16c can be interpreted as call option strike price 16 :)

As Dustin said, we're in a golden time currently for taking these high-probability trades, the target for profitability is so wide

HFT's are either not trading these meme stocks or letting them trend longer on daily moves

1c spreads. I'd trade these on Fridays they expire, i.e. weekly options

$25K capital, position size $5K ride a directional move that has started for ~40 cents (or a double of risk capital - 16 cent option to 32 cent option) and call it a day

If you get whipsawed, cut losses at 50% loss (per Dustin method) 8 cent option price and ride the other direction, switch to calls if initially had puts and maybe see if you can still hit your profit target of $5K/day either riding longer

If you keep getting whipsawed, maybe reassess your trading/charting method. I don't know how to do charts, so I go by price action and sector/market movement for entry/exit confirmation (i.e. if Nasdaq or S&P 500 reverses direction). On AMC, I'd watch other meme stocks if there's value to see any correlation and/or leaders

I can't trade, have enough tax problems for next year but enjoy reading this thread
More...

Thanks for clarifying. Does switching between puts and calls like that numerous times create wash sales?

Not to be nosy but can you expand on your tax problems and why you can't trade? Don't give personal information of course. However, understanding I'm a noob, maybe what you say might boost others.
 
IronFist said:
Thanks for clarifying. Does switching between puts and calls like that numerous times create wash sales?

Not to be nosy but can you expand on your tax problems and why you can't trade? Don't give personal information of course. However, understanding I'm a noob, maybe what you say might boost others.
More...

I'm sorry but @Dustin would be better to answer. My assumption was that options are derivatives like futures and there's no wash sale?


My tax issues are unrelated to the stock market or options, I sold over $500K worth of bitcoins (don't want to say the exact number publicly) and my cost basis is less than $10K. There's a proposal I think of a 39% tax

Anyway, I don't want to introduce a complication in paying the taxes for next year if I start actively trading to qualify for Trader status

I have a long call position on AMD that I do not plan to close (or roll over to Jan/2023 call options) until 1st week of Jan/2022

AMD options are $85 strike, if they are otm by Dec, I can close for a loss I suppose
 
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