Fine Strategy

[raf_bcn]

Hi

One question is if you pretend to hold the position until the second expiration. Then you could lose the maximum for the bfly, and also the maximum for the long put.
This is 1,000 instead of 800 , a 25 % more.
But effectively the postion seen as a whole looks better with this atm bfly . But you have to be right about the price movement.

Why buy 28 puts at 24, and not 14 puts at 26 ? Have you tried it ?
I think it would be a good idea for you to download Thinkorswim to experiment with this kind of changes. It is easy and very helpful to stress and play with the positions.

Como esta o mercado brasileiro de opçoes , acho que pouco movimentado.

 

[Should]

Hi

One question is if you pretend to hold the position until the second expiration. Then you could lose the maximum for the bfly, and also the maximum for the long put.
This is 1,000 instead of 800 , a 25 % more.
But effectively the postion seen as a whole looks better with this atm bfly . But you have to be right about the price movement.

Why buy 28 puts at 24, and not 14 puts at 26 ? Have you tried it ?
I think it would be a good idea for you to download Thinkorswim to experiment with this kind of changes. It is easy and very helpful to stress and play with the positions.

Como esta o mercado brasileiro de opções, acho que pouco movimentado.

My idea was holding the deferred puts until expiration, with the intent of having more time to wait for a favourable movement to happen. If the movement doesn't come I've already got a bit of money from the fly, and I would the double down on the puts, since I got the first lot cheaper, paid by bfly profit. And if it does I get money from the puts. But yes, if it goes against me i'm more toasted than I would be otherwise.

I thought that deeper otms might be better because of leveraging power mostly, but i'm aware the risk of losing would be far greater. I thought that if I was going to buy atm or close, I should straight up buy it and don't sell the fly. I'm kind of leaning towards chaos right now, but then again chaos doesn't come often enough and your graph does look smooth.

I'll definitely try this thinkorswim. Thanks for recomending it!

Opções aqui são definitivamente pouco movimentadas. There's about 2 or 3 big companies that have volume, there's not even volume in index options. I'll surely move on to USA markets once I get my thinking sorted out.

 

[raf_bcn]

The graph I posted is an approximation. I don't know what is your stock. I could do it with real numbers if you say the stock.

Yes, far otm puts give you more leverage if you are right about the movement. But that is because they are less probable to end itm.
The quid is to find the equilibrium that you like.
There is a site where you can optimize your gamma exposure, considering your market opinion.

If you have questions about Thinkorswim you are welcome to ask. I am not the most expert in this forum but I have used it quite a lot.

So, you trade brazilian options. What's your broker. I would like to know good brazilian brokers.

 

[Should]

The graph I posted is an approximation. I don't know what is your stock. I could do it with real numbers if you say the stock.

Yes, far otm puts give you more leverage if you are right about the movement. But that is because they are less probable to end itm.
The quid is to find the equilibrium that you like.
There is a site where you can optimize your gamma exposure, considering your market opinion.

If you have questions about Thinkorswim you are welcome to ask. I am not the most expert in this forum but I have used it quite a lot.

So, you trade brazilian options. What's your broker. I would like to know good brazilian brokers.

The one i've been looking is PETR4

Sure, I would like to check out that site.

I think that for options the best choice would be big reliable broker that charges nothing, called Clear. Some say their system occasionaly lags, but it's free. I've just recently oppened up an account with this intent. So far I've been using Modal, no complaints from me, it's cheap and it's where I run my normal operations.

 

[tommcginnis]

Options are nuts

Peanuts are legumes.

 

[Baozi]

I am just an option noob, but there are a few things that I learned (by losing a bunch of $$):

1) pay close attention to the evolution of the trade (the blue line on optioncreator), not to the terminal distribution (the orange line).

2) On the analyzer, try to increment the days to expiration one at a time and see how the line shifts with the passing of time. You are probably not going to hold until expiration, so terminal distribution will never be reached. Once again, focus on the blue line!

3) When you input a strategy try to use correct/realistic/expected Implied volatility data (I see from the screenshot that you simply slapped a generic 35% on everything). Next, try to play with different I.V. levels on the graph and once again see how the blue line shifts. What you thought was a great trade might become a disaster with just a few %points change.

 

[Global OptionsTrades]

This sentence is your fundamental problem:

...also helps with my "stock not moving enough" problem...

Trading options is not going to help you move stock prices!

Probably better to revisit your strategy than attempt to trade an instrument you don't fully understand, hoping that it will cover a strategy that isn't sound/profitable.