Yep too much. Sorry tsk-- my time is money and I'm not interested in taking it any further on the subject.
There are stats in his books-- that will get u started.
Trading Long Straddles
- Thread starter falconview
- Start date
Yep too much. Sorry tsk-- my time is money and I'm not interested in taking it any further on the subject.
There are stats in his books-- that will get u started.
Lots of people write for SFO and have their own webinars. Tick charts and phase indicators as well, it's not exactly magic...and many people make their own indicators these days. Look, I'm not doubting that his work has some value, I'm sure it does. The question is just how much.
Well sure, many opportunities can be quantified and scanned for with some work. However I still think opportunities based on support/resistance, channels etc. are too subjective to be reliable. That's just me though.
Interesting reading. Picked up some opinions seem worthwhile.
I´m leaning toward choosing a strangle over the straddle. Longer mid term. Say two weeks trading.
I¨ve debated the idea that instead of the traditional strangle used on OTM, instead of going ITM. The reasoning being, that when volatility strikes, you get a better move and a target profit faster. The downside being that OTM strangle is cheaper in capital, and seems to be slower in profitabliity, vs a more intensive use of capital, to go ITM.
Don´t know if anybody has done anything on this? OTM or ITM for more effective profit taking using strangles.
I did pick up, that high beta and high ATR stocks are better choices for straddles, or strangles vs the QQQ I am currently trading with my small capital. That makes sense for sometime in the future, but not right now as the QQQ is stodgy enough to teach me things without a great deal of expense in losses.
I cannot trade intra day, much as I prefer, so anything day tradng is verboten to me by the exchanges.
I also picked up that bidu , amzn and appl are good straddle or strangle type stocks.
Somebody mentioned using a weekly Calendar, with long out month, and getting in on a Monday selling and exiting on Thursday.
I just learned with TOS that they do not really close straddles or strangles, or the calendar, if one side is less than .25 cents. Which backs up my limited experience, plus what somebody on here contributed in saying you should close on Thursday, not on a Friday. I´m currently trying to learn the weekly calendar.
I´m leaning toward choosing a strangle over the straddle. Longer mid term. Say two weeks trading.
I¨ve debated the idea that instead of the traditional strangle used on OTM, instead of going ITM. The reasoning being, that when volatility strikes, you get a better move and a target profit faster. The downside being that OTM strangle is cheaper in capital, and seems to be slower in profitabliity, vs a more intensive use of capital, to go ITM.
Don´t know if anybody has done anything on this? OTM or ITM for more effective profit taking using strangles.
I did pick up, that high beta and high ATR stocks are better choices for straddles, or strangles vs the QQQ I am currently trading with my small capital. That makes sense for sometime in the future, but not right now as the QQQ is stodgy enough to teach me things without a great deal of expense in losses.
I cannot trade intra day, much as I prefer, so anything day tradng is verboten to me by the exchanges.
I also picked up that bidu , amzn and appl are good straddle or strangle type stocks.
Somebody mentioned using a weekly Calendar, with long out month, and getting in on a Monday selling and exiting on Thursday.
I just learned with TOS that they do not really close straddles or strangles, or the calendar, if one side is less than .25 cents. Which backs up my limited experience, plus what somebody on here contributed in saying you should close on Thursday, not on a Friday. I´m currently trying to learn the weekly calendar.
I just finished experimenting with some SIX trades. For the week, on paper. Limited test, but needed to see how they would do.
1) A Long Calendar in XOM exited Friday morning had a net profit after commissions of +.28 cents.
2) Long Calendar in the QQQ had a net profit of +$1.85
3) Weekly Condor had a net profit of $1.00
4) A JUNE condor lost money, (- .17 cents )
5) A GOOG butterfly experiment given to me by a friend earned + $15.50. Expensive trade to get into.
6) QQQ Weekly butterfly earned + $1.30
________________________________
The problem with these are that I closed them Friday morning, an hour after the open. Expiration for some of them. I have since learned they have to be closed ( some of them at minimum .25 cents, or they get assigned ) So that looks like it would be closing these type of trades on a Thursday for less money probably? Will have to run them again and test the stuff with a Thursday close, or .25 cents value, depending which comes first on some strikes On weeklies. Some of these strikes had .01, or .02 value on them.
________________________________
I now have some suggestions for more trades than I have money for, in my small account. I am thinking to trade this coming week with a STRANGLE. Maybe also a small value CALENDAR. Both of these in cash real money. If I can squeeze them in, some more paper trades with butterfly and condor for testing purposes. I think this week is now over for me, unless I can get a strangle in today?
_____________________________________
1) A Long Calendar in XOM exited Friday morning had a net profit after commissions of +.28 cents.
2) Long Calendar in the QQQ had a net profit of +$1.85
3) Weekly Condor had a net profit of $1.00
4) A JUNE condor lost money, (- .17 cents )
5) A GOOG butterfly experiment given to me by a friend earned + $15.50. Expensive trade to get into.
6) QQQ Weekly butterfly earned + $1.30
________________________________
The problem with these are that I closed them Friday morning, an hour after the open. Expiration for some of them. I have since learned they have to be closed ( some of them at minimum .25 cents, or they get assigned ) So that looks like it would be closing these type of trades on a Thursday for less money probably? Will have to run them again and test the stuff with a Thursday close, or .25 cents value, depending which comes first on some strikes On weeklies. Some of these strikes had .01, or .02 value on them.
________________________________
I now have some suggestions for more trades than I have money for, in my small account. I am thinking to trade this coming week with a STRANGLE. Maybe also a small value CALENDAR. Both of these in cash real money. If I can squeeze them in, some more paper trades with butterfly and condor for testing purposes. I think this week is now over for me, unless I can get a strangle in today?
_____________________________________
Falconview, what exactly do you mean that TOS won't allow you to close if one side is .25cents. Could you please direct me to that rule? Thanks.
Well I´m not sure where I read that. But week before last, I was trying to close a calendar. The short side was either a couple of cents on a late Friday, or zero. I was trying to close the trade as a complete trade, using their list of trade types that places those orders. I spent a couple of hours trying to get a fill in TOS, but even though I would CANCEL the order and keep changing the spread, could not give it away, much less close it. Not knowing what to do, I let it expire. I simply ran out of time unable to get a fill on the trade. A week later I see I´m showing in TOS a QQQ order still open with a small profit. I call the HELP desk, by finger typing and they told me, because I had not closed the trade, I was forced to do it piecemeal, that that side was still open. It wasn´t stock, so I was not assigned stock. It was the indexs, which I did not understand and they did not explain very well. After some haggling, I just asked the guy to close whatever it was that was still open. Over a week later.
To make a long story short, I started reading up on assignment in indexes and there was something I read someplace that said they were assigning to stock, if you were doing stock, if it fell under .25 cents on an expiration Friday. In this case a weekly expiration. Then on one of these forums somebody else mentioned it, also. That you were vulnerable if doing spreads on stocks to be assigned the stock if you were under .25 cents on an expiration Friday. That you had to close on THURSDAY. So even though I am not at all clear on this way it works, I will close any such expiration Friday spread on late Thursday in future.
I suppose you could piecemeal the trade and sell the zero value side of whatever spread had a zero leg open. That might work? Thats all I know. I´m a novice and amateur so don´t know too much about such things.
_______________________________
The difference between paper trading when learning and then going to cash trading can bring up some quirks unexpectedly. Today Friday, I decided to place a real cash trade for a CALENDAR. To try it again. I wanted a short April Weekly and a long JULY. The TOS automatic listing for such things, I clicked on the CALENDAR, but it defaults to force you to take a weekly April and a LONG MAY. It has provision to change the long month to July. but the box for the spread value doesn´t change. AGAIN, I played with that for a while, but am very nervous, as I tend to forget their default is 10 contracts, when I only want two contracts. So after playing with it for awhile, and I was having trouble with my internet connection as well. I just gave it up in disgust. It was too late in the trading session in getting assistance from any of my friends on here and ask if I could leg into a CALENDAR, by going LONG JULY and then short the April as a follow up, seperately? That question is still open, if somebody would answer it? I may try again on Monday. In the meantime I simply wrote down the ask premium prices and did it on scratch paper as a trade. Figuring I would get some advice next Monday, perhaps from TOS, or some of my friends on here. I´m testing classical strategies trying to learn them.
I was trying to either get a cash money trade either in CALLS or in a STRANGLE, but the market would not agree on Friday afternoon, for July options. I ended up putting on a cash trade as a STRADDLE instead, for $2500, for 5 contracts. We shall see how that works out, as my chart reading shows we are not finished with downside pressure quite yet, but sideways pressure. Rather than lose the week by not being able to trade in the weekly, I chose to use next week to trade a STRADDLE instead. The other two weeks ago, I did that successfully and so fairly confident I can do it again. Rather than waste this coming week, because of market TIMING not agreeing with the strategy I was particularly willing to test in CASH money, instead of on paper. I´m just learning a lot of this stuff brand new. Between the TOS order platform and my ignorance I make the occasional mistake, which sometimes costs me a bit of money.
To make a long story short, I started reading up on assignment in indexes and there was something I read someplace that said they were assigning to stock, if you were doing stock, if it fell under .25 cents on an expiration Friday. In this case a weekly expiration. Then on one of these forums somebody else mentioned it, also. That you were vulnerable if doing spreads on stocks to be assigned the stock if you were under .25 cents on an expiration Friday. That you had to close on THURSDAY. So even though I am not at all clear on this way it works, I will close any such expiration Friday spread on late Thursday in future.
I suppose you could piecemeal the trade and sell the zero value side of whatever spread had a zero leg open. That might work? Thats all I know. I´m a novice and amateur so don´t know too much about such things.
_______________________________
The difference between paper trading when learning and then going to cash trading can bring up some quirks unexpectedly. Today Friday, I decided to place a real cash trade for a CALENDAR. To try it again. I wanted a short April Weekly and a long JULY. The TOS automatic listing for such things, I clicked on the CALENDAR, but it defaults to force you to take a weekly April and a LONG MAY. It has provision to change the long month to July. but the box for the spread value doesn´t change. AGAIN, I played with that for a while, but am very nervous, as I tend to forget their default is 10 contracts, when I only want two contracts. So after playing with it for awhile, and I was having trouble with my internet connection as well. I just gave it up in disgust. It was too late in the trading session in getting assistance from any of my friends on here and ask if I could leg into a CALENDAR, by going LONG JULY and then short the April as a follow up, seperately? That question is still open, if somebody would answer it? I may try again on Monday. In the meantime I simply wrote down the ask premium prices and did it on scratch paper as a trade. Figuring I would get some advice next Monday, perhaps from TOS, or some of my friends on here. I´m testing classical strategies trying to learn them.
I was trying to either get a cash money trade either in CALLS or in a STRANGLE, but the market would not agree on Friday afternoon, for July options. I ended up putting on a cash trade as a STRADDLE instead, for $2500, for 5 contracts. We shall see how that works out, as my chart reading shows we are not finished with downside pressure quite yet, but sideways pressure. Rather than lose the week by not being able to trade in the weekly, I chose to use next week to trade a STRADDLE instead. The other two weeks ago, I did that successfully and so fairly confident I can do it again. Rather than waste this coming week, because of market TIMING not agreeing with the strategy I was particularly willing to test in CASH money, instead of on paper. I´m just learning a lot of this stuff brand new. Between the TOS order platform and my ignorance I make the occasional mistake, which sometimes costs me a bit of money.
I think u got it mixed up w auto exercise which used to be less than .25 but is now just a penny.REad up on auto exercise.TOS as well as other brokers even give customer incentive incovering those cheap short options by lowering commission in order to reduce risk so u suprised me when u said they wont liquidate cheap options.They want u to get rid of themdue to risk.As far as doing them thru spread, I don't know.The position stayingin your sheet is probably only if ur doing ondemand simulations not real account.
falcon, didn't have time to read most of your post, but the part about shorting a weekly as part of a calender concerned me.
the main objective of a calender is to sell high vega premium in the front month and hedge that risk with a latter month at a lower IV.
the weeklys due indeed have high volatilities, however, your theta (your most important greek) is very very small in a weekly, which means you have much higher price risk.
if you're going to do a calender, think about selling your front month at least 30 days from OPX. this will give you much more theta and a chance to adjust in case it goes against you.
keep your probabilities as high as possible when income trading options. sellings weeklys can defininitely be profitable, but there is much more risk involved, especially when you consider the strange price action in the majority of equities when you get closer to OPX.
disclosure: just woke up and haven't had my coffee so i might be way off on all of this. just wanted to put my two sense in before i forgot.
have a good weekend.
Ha! Ha! Ha! Thanks for the input. Hope it is good coffee?
Yup! The risk bothers me also, thinking about it. Have no idea what would happen if there was a Black Swan 10% market drop, while holding a CALENDAR? Anybody know?
Yup! The risk bothers me also, thinking about it. Have no idea what would happen if there was a Black Swan 10% market drop, while holding a CALENDAR? Anybody know?
Mushin
It was real cash money. First time trying it. I will talk to TOS help on Monday.
It was real cash money. First time trying it. I will talk to TOS help on Monday.