What Option Strategy Do You Use?

[ironchef]

I am an amateur retail, have been trading options continuously since 2013.

Like all retails, I started out trading covered calls and cash secured puts. Eventually some of us retails evolved and branched out to other methods.

For me I eventually figured out how to make money trading directional, single legs: Mainly an option buyer now.

I noticed few on ET employs this approach, most professionals trade combinations and most retails write calls/puts.

I am curious. Here is a quick poll if you don't mind sharing.

 

[Scataphagos]

From observing some who sell option advice, seems they fall into 2 categories.

1. News and fundamental developments about a company.. any reason to trade on a stock is the same reason to trade on its options. Most like to trade OTM but near.. 1-2 strikes away or further.

2. TA... looking for a technical chart reason to trade a stock/option. This seems the be the most common.

Bottom Line.. Learn "Price TA"... when you find a technical reason to trade on a stock, you can trade its options the same way.

 

[SimpleMeLike]

Bottom Line.. Learn "Price TA"... when you find a technical reason to trade on a stock, you can trade its options the same way.

Good Morning Scataphagos,

I agree with this. You are correct! K.I.S.S. Keep it simple.

 

[ironchef]

Good Morning Scataphagos,

I agree with this. You are correct! K.I.S.S. Keep it simple.

If you want KISS, don't touch options, just trade futures.

 

[wxytrader]

I am an amateur retail, have been trading options continuously since 2013.

Like all retails, I started out trading covered calls and cash secured puts. Eventually some of us retails evolved and branched out to other methods.

For me I eventually figured out how to make money trading directional, single legs: Mainly an option buyer now.

I noticed few on ET employs this approach, most professionals trade combinations and most retails write calls/puts.

I am curious. Here is a quick poll if you don't mind sharing.

Most traders don't sell CSP because they can't afford assignment. CSP are the greatest money maker period relative to risk.

 

[Quanto]

I'm mainly doing CSP and CC .
Soon will also do Collar (ie. by adding a LongPut to the above mentioned; the Put variant I call "PutCollar" ).
I also use some variations/extensions of the above by using different (non-standard) Qtys...
These are all directional, most are bullish, but bearish is possible too to construct.
Btw, a CSP order is much easier to do in practice than a CC, as for CC one has to enter more data...

 

[wxytrader]

I'm mainly doing CSP and CC .
Soon will also do Collar (ie. by adding a LongPut to the above mentioned; the Put variant I call "PutCollar" ).
I also use some variations/extensions of the above by using different Qtys...
Btw, a CSP order is much easier to do in practice than a CC as for CC one has to enter more data...

What are the deltas of the short call and long put in your collar?

 

[Quanto]

What are the deltas of the short call and long put in your collar?

It's not fix, my scanner determines it. Ie. if the overall expectancy meets some criteria...

 

[ironchef]

Most traders don't sell CSP because they can't afford assignment. CSP are the greatest money maker period relative to risk.

CSP is essentially a bullish strategy and in the current market it should work very well.

But if you are bullish, why not just buy a call?

 

[ironchef]

I'm mainly doing CSP and CC .
Soon will also do Collar (ie. by adding a LongPut to the above mentioned; the Put variant I call "PutCollar" ).
I also use some variations/extensions of the above by using different (non-standard) Qtys...
These are all directional, most are bullish, but bearish is possible too to construct.
Btw, a CSP order is much easier to do in practice than a CC, as for CC one has to enter more data...

No cost collar is a good way to manage your company's stock options when it gets ITM.