Option trade idea while waiting for AAPL to recover?

[newwurldmn]

Quote from Maverick74:

OK, I didn't hear him say any of that. He just mumbled something about earning income in the meantime which all option trades should seek income as in a profit. I'm trying to get him to take advantage of the situation the market is giving him. He got a pullback in the stock, do something with it. There is NO way to get money back. Options trading does not work like that. I can't get back my losses from any of my old trades either. He has to look forward with "new" trades. He sounds like a long term investor so I have no idea why he would be "upset" about making money if the stock goes back up. He can make the ratio spread as wide as he wants. I have no idea what his cost basis is. He can manipulate the strikes anyway he wants. Of course, he can always do nothing. But there is no way to "repair" this situation and I get highly annoyed when guys think they can go back in a time machine and fix trades that already happened. The ratio spread is the optimal spread for the hand he has been dealt at the moment going "forward". Just my opinion of course.

I got the sense he's hoping to make "free premium" to lower his breakeven point. But he wasn't clear. So I got the sense he wanted out when the stock got to some level.

Anyway, I like those structures. I used to trade them a lot from 2003 to 2010. I should say, "invest" in them as they would all be 1 year+ trades. I made a lot of money in my long only account. Most of the time I got the market return or better on 1/2 the investment. And then in 2008, that "1/2 the investment" really paid off. However, since then these structures haven't been as interesting.

Private banks would offer them with buffers on the downside (10% protection) and then accelerated downside 1.1% to 1% decline in the market.

edit: to your edit, I guess the structure doesn't qualify as income generating. But this is all semantics. It's a good structure, but he should know that if the stock recovers he won't until expiry.

 

[Maverick74]

Quote from newwurldmn:

I got the sense he's hoping to make "free premium" to lower his breakeven point. But he wasn't clear. So I got the sense he wanted out when the stock got to some level.

Anyway, I like those structures. I used to trade them a lot from 2003 to 2010. I should say, "invest" in them as they would all be 1 year+ trades. I made a lot of money in my long only account. Most of the time I got the market return or better on 1/2 the investment. And then in 2008, that "1/2 the investment" really paid off. However, since then these structures haven't been as interesting.

Private banks would offer them with buffers on the downside (10% protection) and then accelerated downside 1.1% to 1% decline in the market.

edit: to your edit, I guess the structure doesn't qualify as income generating. But this is all semantics. It's a good structure, but he should know that if the stock recovers he won't until expiry.

All he told me is he thinks the stock will recover in 2 months. So I have to take that info into consideration. If he thinks the stock will recover in 5 days, well, I'll give him my 5 day plan. LOL. Yeah I think we both know there is no "free premium" in option trading. I've been looking for it for 15 years with two hands and flashlight. Still haven't found it. I'll bet a dime to a dollar he doesn't come back to the thread though. He has a habit of starting threads with a question only to never respond.

 

[newwurldmn]

Quote from Maverick74:

All he told me is he thinks the stock will recover in 2 months. So I have to take that info into consideration. If he thinks the stock will recover in 5 days, well, I'll give him my 5 day plan. LOL. Yeah I think we both know there is no "free premium" in option trading. I've been looking for it for 15 years with two hands and flashlight. Still haven't found it. I'll bet a dime to a dollar he doesn't come back to the thread though. He has a habit of starting threads with a question only to never respond.

won't take your bet.

I've learned (not quite 15 years, but close) that stocks don't move in the timeframe you expect them to.

 

[cdcaveman]

There are these guys on this website power opt. Named power options... that buy wrote strategy is kinda like their holy grail.. they sell a book call the blueprint or something... I didnt buy it but I get the strategy... flattening skew helps... starting out with a flat front month skew after earnings can't be good.... I think there is move in the stock that hasn't happen... this vol implosion will have a refract back out. Buy a strangle on the weekly tom haha... I think we stay rather flat through elections... if I could tell the guy anything I would tell him that he should have had an idea what to do before he bought it...when do I buy.. when do I sell.... I'm personally not good when positions go against me......and I hate stock repair strategies