Hahaha. Does options guide actually pitch that?
In the example above, if the 60 call is 5 then the 30 put will be 5. So your cost less collar has a risk reward of 2 down,1 up.
Want to make 1k / month on 100k, selling options.
- Thread starter Tomaz26
- Start date
Hahaha. Does options guide actually pitch that?
In the example above, if the 60 call is 5 then the 30 put will be 5. So your cost less collar has a risk reward of 2 down,1 up.
Watch this recent video by Dan Sheridan on what is wrong with collars.
Also just sell option credit spreads where you receive $200 to $300
with max loss of $1000. Do the opposite of what Sosnoff of Tastytrade
says and take your occassional $100 loss. If you trade iron condors
and spreads with 10-20 delta short option even in a black swan your
long option 10 points (for SPX say) away will protect you. It is harder
to do this if IV goes back to 10.
Also just sell option credit spreads where you receive $200 to $300
with max loss of $1000. Do the opposite of what Sosnoff of Tastytrade
says and take your occassional $100 loss. If you trade iron condors
and spreads with 10-20 delta short option even in a black swan your
long option 10 points (for SPX say) away will protect you. It is harder
to do this if IV goes back to 10.
Yep, click on the link provided by julianantonio on the previous page and see it for yourself. I ain't making this sh*t up !!!
Could you provide us with the Cliff Notes version? I'm not in the mood to listen to almost an hour and a half of You Tube to find out what his point is.
And what kind of spreads would those be?
Thanks spindr, wasn't trying to be a dick, just trying to make the $10 profit that OptionsGuide is saying make sense. I thought it was maybe in the excess call (sale) over put (purchase) premium, but in your example both are $5. So they must be assuming the $50 stock goes to $60 over the life of the option? Clearly a bad assumption. But, given your numbers, wouldn't it probably be prudent to sell the call and buy the put? No downside, and a potential for $10 upside?
I think the put should cost more in your example - what newworld I think was saying.
I think the put should cost more in your example - what newworld I think was saying.
Maybe my sarcasm for the quality of "education" that the OptionGuide offers is being missed.
What you have proposed is exactly what the long stock collar in their example entails. BUY the stock for $50, SELL the $60 call for $5 and use the $5 premium received to BUY the $50 put for $5. The problem with this is that in the real world, you don't find ZERO RISK collars with a $10 upside (the assumption of whether the stock hits $60 is irrelevant).
If the one year $60 call LEAP sells for $5 and the stock has no dividend, the $50 one year put LEAP should be trading in the vicinity of $7.50 not $5. $5 cost for that put? Not gonna happen
What you have proposed is exactly what the long stock collar in their example entails. BUY the stock for $50, SELL the $60 call for $5 and use the $5 premium received to BUY the $50 put for $5. The problem with this is that in the real world, you don't find ZERO RISK collars with a $10 upside (the assumption of whether the stock hits $60 is irrelevant).
If the one year $60 call LEAP sells for $5 and the stock has no dividend, the $50 one year put LEAP should be trading in the vicinity of $7.50 not $5. $5 cost for that put? Not gonna happen
Costless collars with zero risk don't exist, but it doesn't mean it's a bad strategy. You can find collars with 1:1 R/R on stocks like SVXY that go up 80% of the time.
Mark Wolfinger who has been in the options business since 1977, helps to set realistic expectations regarding trading returns:
If you trade high risk strategies, you have a chance to earn a large sum (10+% per month), but that comes with a very high probability of going broke. High rewards come with high risk.
If you are more conservative (as you are), you may try to earn 'only 2-3%' per month. That's a very good return. Most professional traders cannot earn that much. Brett Steenbarger once told me that the best professional traders earn 'in the low (emphasis on low) double digits' per year. That sounds right to me.
Going by that, earning 1% per month is a realistic target.
Read more:
If you trade high risk strategies, you have a chance to earn a large sum (10+% per month), but that comes with a very high probability of going broke. High rewards come with high risk.
If you are more conservative (as you are), you may try to earn 'only 2-3%' per month. That's a very good return. Most professional traders cannot earn that much. Brett Steenbarger once told me that the best professional traders earn 'in the low (emphasis on low) double digits' per year. That sounds right to me.
Going by that, earning 1% per month is a realistic target.
Read more:
Tomaz. I think there is too much to answer now but a few observations
CL is highly volatile.
I think 1k is doable on certain months if you get into good volatility. It also just depends how far you want your comfort levels and where things are at which is day to day on what’s going on..
Second I suggest you think about bringing in premium on some expiring options if u have lots of margin left. For example ES expiring puts or CL with a couple days. This is penny pinching but will help if you are systematic and catch good winds again when things are down rather then up.. or people offloading winners in say CL at a penny with a couple days to where you think that’s impossible to move. I do this and it’s not necessary but I guess it all adds up.
Another option you might think is playing with earnings options as it’s an always known inflated premium. If u devote the time there on average is more premium I believe then FOP as I use to play earnings and pull 1% a week in far far out ranges... this is not to say there is no risk but there is an example where on FOP I do not make 1% a week! Maybe pick up a couple... I do with my account about 25-50 still a week as I like dabbling in it where I use to do 1-4000 contracts.. but I didn’t want to waste that knowledge and system I had.
Keep in mind earnings are a little more taxes as no 1256 contract... but I don’t know your tax system and sounds like you pay near no taxes?
On one hand I love the goal. It’s concrete and defined so u have an aim. Right now mine is leaning FOP so I don’t care about % return as the experience is what I’m focused. On the other hand I don’t like it as it could set yourself up for disappointment. As the markets are up and down. There is no way I’ve seen to generate the same every month on the same system. That would require modifying week to week and upping or downing risk if you have to hit that level.
In my opinion. I would do as you are, as to me that’s a good chunk of change you got saved. And when you hit double (200,000 ) you know then for sure with swings you can achieve that target every month. I’m sure that sounds insane but to me I’ve learned never to count on the same amount week after week or month after month. Market conditions dictate what we make along with risk and strategy we employ..
Second as you aim for that target of 1k. I would like to see you also aim higher as inflation will kill your stash over time. Which is why once again in my opinion as the same time I think more money in the account serves to show you can have more then what you wanted and is a buffer at the same time.... why limit ourselves in life. All for if you are happy as a clam on 1k but I’ve never experienced having too much money as a problem in diciplined hands.
Hope that helps any. To me when you hit a wall just bust through it and keep looking. There is a way as I’ve countless changes what I’ve doen and sure I will continue to as I seek and learn more
Also possibly try some other FOP. I’ve yet to get into stuff like cocoa. But you will see more reward for more risk or define what you like or don’t. I used the example as I use to trade NDX then went to NQ as it’s more liquid and found I could pull more. This searching for the contracts you like could make the difference. I like NQ as it pays more as it’s more volatile but I also get some ES. What I’m trying to say is play around still as you will see subtle differences in say the ES expiring Friday or next Monday... just stuff you get into a groove with as again I love you have a target. Keep playing around and picking up that little bit critical information that’s gonna push you to that 1%
CL is highly volatile.
I think 1k is doable on certain months if you get into good volatility. It also just depends how far you want your comfort levels and where things are at which is day to day on what’s going on..
Second I suggest you think about bringing in premium on some expiring options if u have lots of margin left. For example ES expiring puts or CL with a couple days. This is penny pinching but will help if you are systematic and catch good winds again when things are down rather then up.. or people offloading winners in say CL at a penny with a couple days to where you think that’s impossible to move. I do this and it’s not necessary but I guess it all adds up.
Another option you might think is playing with earnings options as it’s an always known inflated premium. If u devote the time there on average is more premium I believe then FOP as I use to play earnings and pull 1% a week in far far out ranges... this is not to say there is no risk but there is an example where on FOP I do not make 1% a week! Maybe pick up a couple... I do with my account about 25-50 still a week as I like dabbling in it where I use to do 1-4000 contracts.. but I didn’t want to waste that knowledge and system I had.
Keep in mind earnings are a little more taxes as no 1256 contract... but I don’t know your tax system and sounds like you pay near no taxes?
On one hand I love the goal. It’s concrete and defined so u have an aim. Right now mine is leaning FOP so I don’t care about % return as the experience is what I’m focused. On the other hand I don’t like it as it could set yourself up for disappointment. As the markets are up and down. There is no way I’ve seen to generate the same every month on the same system. That would require modifying week to week and upping or downing risk if you have to hit that level.
In my opinion. I would do as you are, as to me that’s a good chunk of change you got saved. And when you hit double (200,000 ) you know then for sure with swings you can achieve that target every month. I’m sure that sounds insane but to me I’ve learned never to count on the same amount week after week or month after month. Market conditions dictate what we make along with risk and strategy we employ..
Second as you aim for that target of 1k. I would like to see you also aim higher as inflation will kill your stash over time. Which is why once again in my opinion as the same time I think more money in the account serves to show you can have more then what you wanted and is a buffer at the same time.... why limit ourselves in life. All for if you are happy as a clam on 1k but I’ve never experienced having too much money as a problem in diciplined hands.
Hope that helps any. To me when you hit a wall just bust through it and keep looking. There is a way as I’ve countless changes what I’ve doen and sure I will continue to as I seek and learn more
Also possibly try some other FOP. I’ve yet to get into stuff like cocoa. But you will see more reward for more risk or define what you like or don’t. I used the example as I use to trade NDX then went to NQ as it’s more liquid and found I could pull more. This searching for the contracts you like could make the difference. I like NQ as it pays more as it’s more volatile but I also get some ES. What I’m trying to say is play around still as you will see subtle differences in say the ES expiring Friday or next Monday... just stuff you get into a groove with as again I love you have a target. Keep playing around and picking up that little bit critical information that’s gonna push you to that 1%
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