What works for you?

B

Badget01

Hello traders,

There are many threads, where people are saying that
- selling premium is better than buying premium
or
- buying premiun si better than selling premium.

I dont want to discuss what is better. I would say, better is what works for you the best, better is - what is for you profitable and which style you are comfortable with.

Let´s do this thread to help each other, even if you are begginer or experienced one.

So please, kindly respect each other style of trading and do not try to attack others, that this can not work and that can not work and so on.

So lets do this like that, if you are using any of options strategies, like iron condors, spreads, straddles etc. or just naked selling or buying - write it down.

1) Strategy - why?

I am trading mostly SPY, cause it is very liquid. And I am BUYER. I am comfortable with this style, I would say I can sleep better and I know I can only loose what I paid for.

2) Expiration - why?
5-10 days - basically, I dont like to hold this index any longer and I think it will move enough.

3) Greeks - important to you? Yes/no
No

4) Technical/Fundamental/Timeframe
I am using mostly technical - bollinger bands, s&r zones, candlesticks and my own feeling.
As a Fundamental I am trying to watch Bloomberg.
Timeframe depends on expiration day - but mostly 4h and D.
 
Hi Badget01,

Welcome to Elite Trader. I think it would be great if members here would respect others opinions and posts.

I see that in summary, you trade only SPY, only buy options, expiration 5-10 days, don't care about your delta and use T/A to determine your entry/exit prices.

When you say Expiration, did you mean holding period? What is your typical holding period? Since you do not look at greeks, how do you determine what strike to buy? Is it a dollar amount you want to risk vs buy a certain delta?
 
Great Thread, I have been a option seller for many years, the performance is not bad but quality of life deteriorating as positions get bigger, it's time to change to a safer strategy, maybe buyer is safer?
 
At the moment, overall financial markets are bearish so selling premimum is greater. I thought we were going to see a change in the trend this month but perhaps, next month.
 
Nice thread, and feel many of us have something to learn from this. Especially those who like copying others all the time, just try to develop your own strategy and get ideas from others to improve on it.
 
Badget01 said:
Hello traders,

There are many threads, where people are saying that
- selling premium is better than buying premium
or
- buying premiun si better than selling premium.

I dont want to discuss what is better. I would say, better is what works for you the best, better is - what is for you profitable and which style you are comfortable with.

Let´s do this thread to help each other, even if you are begginer or experienced one.

So please, kindly respect each other style of trading and do not try to attack others, that this can not work and that can not work and so on.

So lets do this like that, if you are using any of options strategies, like iron condors, spreads, straddles etc. or just naked selling or buying - write it down.

1) Strategy - why?

I am trading mostly SPY, cause it is very liquid. And I am BUYER. I am comfortable with this style, I would say I can sleep better and I know I can only loose what I paid for.

2) Expiration - why?
5-10 days - basically, I dont like to hold this index any longer and I think it will move enough.

3) Greeks - important to you? Yes/no
No

4) Technical/Fundamental/Timeframe
I am using mostly technical - bollinger bands, s&r zones, candlesticks and my own feeling.
As a Fundamental I am trying to watch Bloomberg.
Timeframe depends on expiration day - but mostly 4h and D.
More...

It seems to me that option buyers and sellers have opportunities to make money if they know how to pick their spots.

Option buyers should be fairly selective with their trades because truly significant opportunities don’t seem to come as often as we like. We risk getting chewed up by spreads, theta decay, commissions and fees. But when we can latch on a good run, we can hit big. Range expansion is our friend, and we should focus on those situations that may preceed range expansion, accounting for implied volatility, of course.

Option sellers enjoy steady profits, but must avoid taking the big hit that could wipe them out. Avoiding automatic trading, being aware of higher risk situations, avoiding too much leverage, and utilizing risk management is key to long term success here in my opinion.

Someday I hope to become more knowlegeable and dynamic with options trading so I am comfortable either buying or selling options according to my outlook.
 
hey badget, just something to keep in mind - spy gamma (short dated options) are probably the worst possible options to buy long term. It's crucial you have a well defined edge if you are going to be a net buyer of these options.
 
TheBigShort said:
hey badget, just something to keep in mind - spy gamma (short dated options) are probably the worst possible options to buy long term. It's crucial you have a well defined edge if you are going to be a net buyer of these options.
More...
It is difficult to make directional bets (buy/sell single leg options) when noise (volatility) dominates the outcome.
 
ironchef said:
It is difficult to make directional bets (buy/sell single leg options) when noise (volatility) dominates the outcome.
More...
Well if you believe that stocks follow a brownian motion, then yes, volatility erodes away at the drift (directional) component.
 
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