For the market in general? DITM puts, but why not just cut size. Your paid to bear risk. No free lunch.
I'm going to miss the 60/40. Boomers had it good.
How to short the S&P using options? Day & swing puts
- Thread starter KCalhoun
- Start date
For the market in general? DITM puts, but why not just cut size. Your paid to bear risk. No free lunch.
I'm going to miss the 60/40. Boomers had it good.
Thanks xanderman. I am always looking for a free lunch, and have found quite a few. The same link I posted works long on stocks if you reverse it and works even better with calls than puts on most stocks. BTW Tesla IV changed such that for playing it for a drop or staying even it does not work a well today as it did in past (at that link).
With diagonals and ratioing them such as 3 long vs 2 short can on most stocks get positive theta, it makes $ if stays even, gives 3-4 times leverage and 60% chance of winning, so superior to buying the stock. Only danger is using that leverage. If you do not use leverage and keep the 3-4 times saved cash as cash it is lower risk and higher gain and higher % chance of wining. Stocks can do 3 things, go up, down and even. If you win on 2 out of 3 of those, see it as an edge.
Cheers
Simple Strike Price Select. One guy would buy puts or buy calls at the strike closest to 40 delta.
What's a better strike to use for an intraday options day-trade? 30 delta? 50?
If the preferred Delta is a toss-up say between 36 and 45, would Open Interest be a good tie breaker?
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Me too!
I have been working with the m/w/f expiring weekly options on both SPX and SPY.
I bought $SPX 4600 put 10 Jan 22 for $2 at the end of the day on friday.
I have limit order to sell at $25. I don't expect it. You never know what happens between friday afternoon and monday morning. I'd like to get $4 to $6 for it if I can. If it goes to $0. So what. It is like a 4 point loss on ES. emini. Right?
Last week I did good with them. SPX options. What I like is the limit risk, open end profit. $2 is same as only 4 points ES. No way to swing ES over the weekend and use a 4 point stop loss. Almost certain loss. Not so with SPX options. Nothing certain. But at least can stay in for a chance to be right.
Sold for $9.30. Only one I had. Had I two, I'd have held second for $15. High was $25. I would have needed 3 to hold one for that price. I don't have "diamond hands". I don't like profits to go bye bye.
It may be helpful to look at my journals on here.
https://www.elitetrader.com/et/threads/global-options-trades.330518/
https://www.elitetrader.com/et/threads/swing-trading-with-butterflies.360566/page-13
In the first one, I was buying single directional options (including on S&P) and holding for a few weeks. The results were quite lively - not for widows or orphans!
In the current one, I'm buying spreads and often closing next day. The results may not be as exciting, but are comfortably more consistent.
I'm NOT saying anyone should do what I do, but you can draw your own conclusions on gaining exposure to an expected fall in S&P, without incurring the losses that I did!