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Trading in Luxury
- Thread starter traderlux
- Start date
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took a paper trade TSLA using Heikin-Ashi candles, macd, and the recent price swings between $300 and $350 as the triggers,
expected to be in trade for about 2 weeks, so went with 1 month option,
TSLA was trading around $320, available strikes at 315, 320 and 325, so went otm,
Feb 13, bto Mar16 325 call, $10.75
Feb 23, stc Mar16 325 call, $31.20
expected to be in trade for about 2 weeks, so went with 1 month option,
TSLA was trading around $320, available strikes at 315, 320 and 325, so went otm,
Feb 13, bto Mar16 325 call, $10.75
Feb 23, stc Mar16 325 call, $31.20
wanted to review the TSLA trade, the initial cost was higher than I like to go,
usually try to target about $500 a trade,
looked at doing a debit spread, 325/350 call, $6.75 in, possible exit $17.70, try to avoid
spreads if possible, as they are a battle going in and getting out
looked at a higher strike call, 335 call, in $8.25, out $23.25, not much lower on entry,
might have to fight with spreads for TSLA, or go with higher entry for straight call
usually try to target about $500 a trade,
looked at doing a debit spread, 325/350 call, $6.75 in, possible exit $17.70, try to avoid
spreads if possible, as they are a battle going in and getting out
looked at a higher strike call, 335 call, in $8.25, out $23.25, not much lower on entry,
might have to fight with spreads for TSLA, or go with higher entry for straight call
.....from a comment on seeking alpha about LEAPs.....
Another way to use a long term option is to buy an ITM LEAP call in a severely oversold stock if we think the sell-off was overdone.
instead of selling a short-term call against it, we sell a short-term bear call spread.
If stock moves up, we have the profit in the spread, but we can close the
long OTM piece of the bear call spread on a gamma rush, and leave the short call.
(Note it is still 'covered' by the LEAP). And, as so often happens, we note a few days later that the short call has now moved from 'red to green' as theta demands its due.
So, we now clip that profit, and combine the two to get our total return.
Now, do we want to try this again, or is there a better play? How much have we reduced the basis of our initial LEAP call? We might want to buy another LEAP at this point, or simply give our initial LEAP a couple of days to hit a pre-determined target.
Or, we might consider selling an ATM current month or a 60 day one strike OTM call.
Another way to use a long term option is to buy an ITM LEAP call in a severely oversold stock if we think the sell-off was overdone.
instead of selling a short-term call against it, we sell a short-term bear call spread.
If stock moves up, we have the profit in the spread, but we can close the
long OTM piece of the bear call spread on a gamma rush, and leave the short call.
(Note it is still 'covered' by the LEAP). And, as so often happens, we note a few days later that the short call has now moved from 'red to green' as theta demands its due.
So, we now clip that profit, and combine the two to get our total return.
Now, do we want to try this again, or is there a better play? How much have we reduced the basis of our initial LEAP call? We might want to buy another LEAP at this point, or simply give our initial LEAP a couple of days to hit a pre-determined target.
Or, we might consider selling an ATM current month or a 60 day one strike OTM call.
Next week is Mar wk 2 for option expiry, pit bull lo wk, so watch for that,
Thur seems to be when they can show up.
ADP job number will be on Wed, can be a clue for Fri NFP.
Likely see more trade war talk, I am not too concerned about that, seems mostly to be fodder for drama chatter, any action/reaction may not have a big real impact, could be wrong , just my opinion at this time.
Thur seems to be when they can show up.
ADP job number will be on Wed, can be a clue for Fri NFP.
Likely see more trade war talk, I am not too concerned about that, seems mostly to be fodder for drama chatter, any action/reaction may not have a big real impact, could be wrong , just my opinion at this time.