Selling Calls To Take Advantage of SPY Drop to 82 By 18-Sep

Chances SPY Will Drop To 82 By Mid September

  • Virtually Impossible

    Votes: 6 8.0%

  • Unlikely

    Votes: 8 10.7%

  • Possible

    Votes: 13 17.3%

  • Likely

    Votes: 25 33.3%

  • Sure Thing

    Votes: 16 21.3%

  • Yet Another Fool Ready To Part With His $$

    Votes: 7 9.3%
  • Total voters
    75
Quote from newguy05:

shortie, what % of the account is represented by the position you posted and are you monitoring the market 9:30 to 4?

if you look at the sp500 chart, we are winded very tight was a high probability of a breakout and opx next week, your short strangle/straddle are pretty dangerous right now.

How are you applying stop loss?
More...

we can assume that this is a 25K account that holds only spy positions.

i don't have stops here i prefer to adjust the position in increments as the market moves around. i do watch the market constantly during RTH.

yes, a nasty breakout could do some serious damage but we are getting really close to expr.
 
Quote from atticus:

Sort of, but I would suggest selling a full 1200 SPY, as that would convert the position to 12 otm short calls and 12 itm synthetic short calls. I was thinking more along the lines of 12x12 on the strangle and 300-400 short SPY.
More...

ok, i understand now. a partial short spy position will match a move in calls in case of an upside.
 
Quote from atticus:

Sort of, but I would not suggest selling a full 1200 SPY, as that would convert the position to 12 otm short calls and 12 itm synthetic short calls. I was thinking more along the lines of 12x12 on the strangle and 300-400 short SPY.

Nice going.
More...

it seems that i could sell 12x calls instead of 300-400 SPY. the advantage is that i benefit from option decay. the disadvantages are: none?
 
no more trades today. EOD update:
attachment.php


not sure if i will start building a new position with July options before June ones expire.
 

Attachments

Quote from shortie:

no more trades today. EOD update:
attachment.php


not sure if i will start building a new position with July options before June ones expire.
More...

Not taking profit after a sharp downmove today?
 
Quote from shortie:

it seems that i could sell 12x calls instead of 300-400 SPY. the advantage is that i benefit from option decay. the disadvantages are: none?
More...

Trade the underlying around a 1:1 position if you want to earn from decay. Say, 2:1 strangle/spot. Selling a 12x strangle and trading 600-shares of SPY. Obviously, it's another matter of you're short-gamma scalping.

Short options make for sh*t hedges. You're doing well with this position, congrats.
 
Quote from traderyin:

Not taking profit after a sharp downmove today?
More...

i locked in some gains by adding -4x puts as per earlier post. i will try to nurse the position into the expration.

Quote from shortie:


....
Midday Update: added -4x 92 puts in increments as the market was going down.
More...
 
Quote from LEAPup:

Hey shortie, and atticus. If you guys don't mind, take a look at asianprop's reply to my post in an ETF thread. He seems to make sense, and I agreed with him. I was watching shorties trade on the SPY thinking it made better sense to me until I read that reply. HELP! Lol! I'm a little lost now. Argh! Let me know what you think. Thanks!

Wish I knew options like you guys do.

http://www.elitetrader.com/vb/showthread.php?s=&postid=2466753#post2466753
More...

atticus knows about options but i have only rudimentary understanding. from the post you mention i understand that what asiapro meant was that you can't "fix" an ETF by using options. if an ETF does not track oil well than the options on that ETF can't fix this type of a "problem". an option is just a derivative. you need a different ETF or a stock that tracks what you want (oil, sugar, etc) better.
 
You must log in or register to reply here.
Back
Top