How to short the S&P using options? Day & swing puts

taowave said:
You are down with avoiding ITM options to "avoid paying Intrinsic"?? To buy ATM???
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I think the idea is to catch a quick pop to get the option into ITM for a break even trade. It’s similar/related to trading whole numbers. I don’t think it has anything to do with the Greeks, as @Dustin pointed out.
 
Dustin said:
If he uses options instead, now on his correct bets he's making 100%+ on a trade (possibly much more) vs. right now he might make 1-5% on a good trade

Depending on his hit rate, these instruments could take him from a mildly profitable trader to something much more
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Ken seems kind of crazy ...the type of guy to immediately buy a Rolex, sports car...have a mistress, buy cool clothes, eat at restaurants, night clubs, sail, go on vacation to Hawaii or the Carribean...if he ever truly came upon money. o_O
And his trading style, performance, history, record kind of reflects that erraticness and unstability.
 
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qlai said:
What durations? Weeklies?
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I seek money. I seek volatility and range -- and only weekly options can provide that, closer to expiration.

I'm sure a lot of people can make the argument it's nothing more than dumb duck casino gambling, but if you have a certain degree of skill, talent, experience, wisdom, philosophy, tactics...it's like having x-ray vision on the blackjack card count shoot deck, or on where the roulette ball will land on the spinning wheel.
 
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Agree -- Volatility and range (with risk mgmt) is everything :D

Not squiggly line t/a etc .... the main use of charts is to show trend and more important, range and directional volatility. Many don't get it. As I say, the math is more important than charts.

And I've had sports cars, Brioni suits, traveled the world, lots of ladies, etc.... I love trading more than all of it (^_^)
 
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longandshort said:
If you don’t know the Greeks then you’ll buy strikes that won’t make money. You don’t need to be a master of Greeks if you have a view on the underlying and are looking for a way to lever up on a bet. But you still need to understand things like delta and gamma, because those are what will drive your pnl.

What @Dustin is describing is harvesting volatility premia on 0day options. This is systematic (a beta return). If you did this every day, you will probably make 8-12% annually, which is normal for alternative risk premias. You might get lucky and make a series of positive bets — or not.

Tl;dr —Trading options is not like day trading stocks at all. Beware of simple strategies.
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dustin buys options. He is implicitly making long gamma bets but has shown (at least in his journal) that he’s good at finding stocks that are moving enough to pay for the decay.
 
If you are looking to simulate long (or short) stock, it seems that you would want to buy deep ITM calls (or puts).

An Oct 11 410 SPY call has a 91 delta (essentially long stock) and trades for $37, so 11x leverage relative to long stock ($450/share)

The liquidity of said options can be problematic. The call referenced above only had 5 contracts trade on Friday. I think that's the biggest issue

I am probably misunderstanding you, but FWIW...
 
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longandshort said:
If you don’t know the Greeks then you’ll buy strikes that won’t make money. You don’t need to be a master of Greeks if you have a view on the underlying and are looking for a way to lever up on a bet. But you still need to understand things like delta and gamma, because those are what will drive your pnl.

What @Dustin is describing is harvesting volatility premia on 0day options. This is systematic (a beta return). If you did this every day, you will probably make 8-12% annually, which is normal for alternative risk premias. You might get lucky and make a series of positive bets — or not.

Tl;dr —Trading options is not like day trading stocks at all. Beware of simple strategies.
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I've had 400%+ returns the last 2 years on a decent sized account. With 0DTE you are targeting 1000-1500% per day on the trade. 8-12% would be considered very poor performance. K.I.S.S.
 
Dustin said:
I've had 400%+ returns the last 2 years on a decent sized account. With 0DTE you are targeting 1000-1500% per day on the trade. 8-12% would be considered very poor performance. K.I.S.S.
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So you’re only capturing 200% on potentially +1,000,000% annual opportunity? I am sure you are making money but I don’t think what you’re describing is as simple as you claim.
 
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