Is this a good or bad trade?

[7out]

I sold 2 mnq very early this morning with a plan to make 100 points on each (total 200 pts). Then in morning after talking to a friend I decided to try and max out the 200 point target and profit more by selling 3 puts (Mar 11) 13450 strike for 125 pts. In this case I will still keep my 200 points profit if mnq remains below 13687.5 by tomorrow’s close. I also will make 200 points if mnq stays above 12975 by tomorrow’s close.

A third friend I ran this by, said I’m crazy and asking for pain. Mind you when I sold the outs this morning mnq was struggling to get under 13500 so I took the option trade.

thoughts for and against please. I thought it was a good trade. 2nd friend agreed, 3rd friend says shouldn’t taken that trade and if I was nervous of achieving my 200 point target in morning should’ve taken whatever profit was avaialable and move on.

 

[nooby_mcnoob]

View attachment 280003
I sold 2 mnq very early this morning with a plan to make 100 points on each (total 200 pts). Then in morning after talking to a friend I decided to try and max out the 200 point target and profit more by selling 3 puts (Mar 11) 13450 strike for 125 pts. In this case I will still keep my 200 points profit if mnq remains below 13687.5 by tomorrow’s close. I also will make 200 points if mnq stays above 12975 by tomorrow’s close.

A third friend I ran this by, said I’m crazy and asking for pain. Mind you when I sold the outs this morning mnq was struggling to get under 13500 so I took the option trade.

thoughts for and against please. I thought it was a good trade. 2nd friend agreed, 3rd friend says shouldn’t taken that trade and if I was nervous of achieving my 200 point target in morning should’ve taken whatever profit was avaialable and move on.

You complicated it with this insanity why?

You can't have a "plan" to make 200 points.

Just so you get some feeling that I might perhaps have something of value to add, this is today's PnL after a rough day (IMO):

At most, the things you can control are where you enter and how much you are willing to lose. That is it. The market decides everything else.

 

[easymon1]

At most, the things you can control are where you enter and how much you are willing to lose. That is it. The market decides everything else.

Tell It! Tell It! Tell It Bretheren! Amen. QED.

 

[7out]

You complicated it with this insanity why?

You can't have a "plan" to make 200 points.

Just so you get some feeling that I might perhaps have something of value to add, this is today's PnL after a rough day (IMO):

View attachment 280008

At most, the things you can control are where you enter and how much you are willing to lose. That is it. The market decides everything else.

Congrats, on your trading day.
I don't though understand what the insanity is?
I'm trying to maximize profits, I guess you truly believe the market will go wild by tomorrow's close? You say it is insanity, but offer no help as to why - is market ready to take off or sell off within the next day? WHY?

 

[zdreg]

It is a bad trade if written on a regular piece of paper.
It is a good trade if written on the back of a napkin.

 

[nooby_mcnoob]

Then in morning after talking to a friend I decided to try and max out the 200 point target and profit more by selling 3 puts (Mar 11) 13450 strike for 125 pts.

I don't though understand what the insanity is?

You started with a plan to short MNQ, fine. Presumably you found a good entry.

But then you (seemingly) randomly decided "hey, I'll sell puts to make more money".

Instead of closing the short MNQ trade at a profit, you now have a covered put situation which can go against you and take you negative if price goes too high.

Now you have to manage this trade for the possibility of making $400-800. The complexity/$ of this trade seems excessive to me.

Again, compare it to just closing the MNQ trade and having a profit, and maybe going long MNQ into close which is the bias of being short a put anyway.

This complexity does not seem worth your apparent level which is perhaps still learning.

 

[7out]

You started with a plan to short MNQ, fine. Presumably you found a good entry.

But then you (seemingly) randomly decided "hey, I'll sell puts to make more money".

Instead of closing the short MNQ trade at a profit, you now have a covered put situation which can go against you and take you negative if price goes too high.

Now you have to manage this trade for the possibility of making $400-800. The complexity/$ of this trade seems excessive to me.

Again, compare it to just closing the MNQ trade and having a profit, and maybe going long MNQ into close which is the bias of being short a put anyway.

This complexity does not seem worth your apparent level which is perhaps still learning.

This at least is more informative and I value others opinion because it does give others perspective. My logic was the market is heading down into Friday's close. I then also calaculated that the market would have to rise above 13687.50 or go below 12975 for me to make less than I almost had locked up. I felt it was worthwhile going for it - no manage of trade required, I'd still be short as originally planned.

I was appreciative of advise until final sentence, where your cockiness creeped out (which there was no reason for). If you look at my posts during the hey day of the pandemic (during April, May 2020 in here you'll see screenshots) I was making $1-3K a day daytrading while everyone was home -but I never felt the need I have to advertise that as to gain your respect (like you do). We all learn all the time, you do too but you do it less gracefully.

 

[nooby_mcnoob]

This at least is more informative and I value others opinion because it does give others perspective. My logic was the market is heading down into Friday's close. I then also calaculated that the market would have to rise above 13687.50 or go below 12975 for me to make less than I almost had locked up. I felt it was worthwhile going for it - no manage of trade required, I'd still be short as originally planned.

I was appreciative of advise until final sentence, where your cockiness creeped out (which there was no reason for). If you look at my posts during the hey day of the pandemic (during April, May 2020 in here you'll see screenshots) I was making $1-3K a day daytrading while everyone was home -but I never felt the need I have to advertise that as to gain your respect (like you do). We all learn all the time, you do too but you do it less gracefully.

You don't have to manage the trade if (for example) MNQ goes to 15K? Of course you do. You have assumed it's going to tank into tomorrow, which it might do. But you have to manage the trade. You can't just let the trade go to expiration unless I've missed something in your setup.

I'm not sure where you get the idea that I am being cocky. I was only showing you for the purposes of giving you practical advice as opposed to theory. But it seems you really want to be told this is a smart trade.

It is a covered put, and as long as you sold when price dumped and have a plan on what to do if it goes against you, it's just a trade.

It's an unnecessarily complicated trade when you could have been sitting on 200 points of profit overnight with zero exposure.

 

[nooby_mcnoob]

By the way, there *is* a strategy that MANY traders employ which is to leg in and out of vertical spreads. It's always seemed too smart for me but it sounds like you might like that.

 

[7out]

You don't have to manage the trade if (for example) MNQ goes to 15K? Of course you do. You have assumed it's going to tank into tomorrow, which it might do. But you have to manage the trade. You can't just let the trade go to expiration unless I've missed something in your setup.

I'm not sure where you get the idea that I am being cocky. I was only showing you for the purposes of giving you practical advice as opposed to theory. But it seems you really want to be told this is a smart trade.

It is a covered put, and as long as you sold when price dumped and have a plan on what to do if it goes against you, it's just a trade.

It's an unnecessarily complicated trade when you could have been sitting on 200 points of profit overnight with zero exposure.

I have no problem hearing someone say they don't like my trade and give reasons as you did earlier. This is why I posted - wanted other viewpoints to consider.

Though I do keep tabs on the market all day, I don't watch the market constantly (I no longer day trade full time - not worth the roller coaster times I encounter sometimes).

The options expire tomorrow (Mar 11) at which time I planned on unloading trade, just felt this was a good risk/reward scenario to try and squeeze up to 675 points from a trade that looked like was almost a guaranteed 200 points.

As I said earlier, I felt jitters in morning when market failed to hit 13500 (on downside) and saw these option quotes and felt I could improve on my profit target.

I figured with one day to go I can take that chance when I have such great paramaters to fall back on to. If market goes up by 100 points tomorrow then same result from original profit expectation/want. According to certain stats I keep (small little strategy) when QQQ closes below Hi-Lo study (study of last 10 high moving average and 8 low moving average) I notice there is usually (over 80%) follow through the next day by 0.5% which is approx 70 Nasdaq points which will bring us back down to 13500 at some point tomorrow.

My 2 cents worth.