Looking for suggestion on how to do something properly

A

anglagard

I have a LONG ONLY entry method based on the daily chart, sometimes weekly charts.

Many times such entry is not achieved as price never gets there.

However, if I got there, I would be a buyer.

No further information is known about the time it would take to get there or what targets would be achieved as I trail stop my entries.

With the above presented, what is the best way to play such scenario with options.

Thank you much for your time.

Joe
 
Quote from anglagard:

I have a LONG ONLY entry method based on the daily chart, sometimes weekly charts.

Many times such entry is not achieved as price never gets there.

However, if I got there, I would be a buyer.

No further information is known about the time it would take to get there or what targets would be achieved as I trail stop my entries.

With the above presented, what is the best way to play such scenario with options.

Thank you much for your time.

Joe
More...

Sell 1 or 2 strike OTM puts, then buy the stock at your target price. Sell the puts if they hit ATM, might be sold at a loss.
 
Quote from ForexForex:

Sell 1 or 2 strike OTM puts, then buy the stock at your target price. Sell the puts if they hit ATM, might be sold at a loss.
More...

Hello Forex,

That's what I have been doing, but was not sure if I was doing it the best way.

Problem Ive been finding is that the premium is very small, so I go deeper expiration to get more from them, is this acceptable ?

Not quite sure which expiration to use or if im being too greedy and risky by going real deep.

Thank you

Joe
 
Quote from anglagard:

Hello Forex,

That's what I have been doing, but was not sure if I was doing it the best way.

Problem Ive been finding is that the premium is very small, so I go deeper expiration to get more from them, is this acceptable ?

Thank you

Joe
More...

I don't think deeper expiration is a good solution, most of the time decay is in the last month. For a premium seller more time is not your friend.
 
Quote from ForexForex:

I don't think deeper expiration is a good solution, most of the time decay is in the last month. For a premium seller more time is not your friend.
More...

Ok say I got February selling for .30 cents and December selling for 4.00.

If 4 drops more than .30 I made more than .30 cents.

That's what I meant :D

Probably a dumb thing right?

Joe
 
Quote from anglagard:

Ok say I got February selling for .30 cents and December selling for 4.00.

If 4 drops more than .30 I made more than .30 cents.

That's what I meant :D

Probably a dumb thing right?

Joe
More...

My guess is that it will take longer than 1 month for the December option to decay by $0.30 plus Bid/Ask spread and commissions. Could even take a couple months, sort of like watching paint dry.
 
Quote from ForexForex:

My guess is that it will take longer than 1 month for the December option to decay by $0.30 plus Bid/Ask spread and commissions. Could even take a couple months, sort of like watching paint dry.
More...

Ok, so sell the nearest month and when it's ready to expire worthless, start with the new month ?

Joe
 
Quote from anglagard:

Ok, so sell the nearest month and when it's ready to expire worthless, start with the new month ?

Joe
More...

Yes ....... Maybe enter the position 4 / 5 weeks before expiry.
 
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