Message from @Deleted User
Discord ID: 396065398908387349
I’m always reminded of my favorite quote, “there are no markets anymore, only manipulations.”
I do feel lonely being the only one trading options here
If you like thinking about volatility and time value then they are very interesting.
@ThisIsChris I think @Deleted User does as well
@ThisIsChris in terms of option strategies I only utilize them in one way. If I see a company that is going into earning where expectations are low (perhaps the stock has sold off quite dramatically prior to earnings). I will buy at the money calls for the front month contract (earnings date is in Jan. 2018, I will buy option contract with expiration in Jan 2018 assuming it does not expire prior to the earnings date). My plan is always to exit the position the day of earnings whether I am right or wrong. My goal being to take advantage of any volatility that was present itself. Time decay is not on my side here so i try to minimize that risk.
I did this with GIII prior to their recent earnings and made out well
What strategies do you use?
@Zyzz Nice, I like to use options during earnings season too, though I will usually get ones expiring a few days or maybe a week max after the earnings report comes out since they respond more sharply to the movement of the stock.
Outside earnings season, I still like to use options for all sorts of things. For a while I was using OTM "protective" puts as insurance on an ETF I was holding (This was USO for the first six months of 2015). Sometimes I buy naked puts deep ITM as a way to short a stock, which I did with SPY in the 3rd quarter 2014 and turned my first profit. More recently I've been selling OTM covered calls on SPY as a way to get extra money out of holding that stock. During earnings season I will usually use vertical spreads as a way to cap the cost of the options I buy and as a way to more easily quantify my risk/reward ratio (vertical spreads, especially with very close strikes, act a lot like binary options). Those are the main strategies I use. Sometimes if I have an opinion about something long term but I don't think it will happen short term, (like if I think SPY will go up in the next 3 months, but not in the next week) then I might buy a calendar spread where I buy longterm OTM and sell short term OTM. I also played with selling an Iron Condor once and I might a few bucks. The covered calls and the Iron Condors I used for safer bets that net me just a few bucks, and they're always near-term expiry.
what are good resources (preferably free) to learn about options and how to use them>
?*
I gave a talk on here a few weeks ago. I can do it again.
If you get one or two more people to join that would be even better @Deleted User
@ThisIsChris Options are a lot of fun. I usually buy puts on stocks I think will bomb on earnings.
Here's a leverage story you might like:
in early summer 2015, I read an article about how Chinese peasants were double-mortgaging their properties to buy into the stock market
there were makeshift "stock cafes" being set up where they could come in and buy stock.
I saw this as a once-in-a-lifetime opportunity to make an obvious play
There's an ETF called YANG
it's a 3x leveraged bear fund for the broad Chinese stock market
Oh yeah YING and YANG lol
yeah, exactly
So I bought a couple thousand worth of OOM call options on it
oh god, 3x ETF, in an options story...
😃
worked out pretty well
Wow, I have to call no homo and no schlomo, but that's really awesome
I could have held on a few more weeks, but I was very happy with the return
opportunities like that don't come around very often .I was lucky enough to read the right news article
I was lucky it tanked so quickly too. If I had been off on my timing it would have been a washout
sometimes things work out!
Yeah good job dude putting that into action!
I love those complex strategies though
it's fun to see them mapped out in thinkorswim
I haven't seen a good opportunity for one yet. I usually keep it simple-minded.
Yeah I love looking at charts showing payoffs evolve in time, and how they start off in these weird smooth shapes that slowly converge to rigid slopes
Yes!
Can you tag me if you're making an interesting trade? I'd at least like to follow along. I might jump in too if I understand it enough to make an informed decision.
Yeah dude I definitely will, please do likewise!
I understand the fundamentals, but I don't spend enough time digging into opportunities
you bet!