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5 contributions to Invest & Retire Community
Jun 29 inÂ
The Greeks
Wondering how important the Greeks are when option trading. Listening to some videos, it sounds like Delta is an important Greek to use when selecting strike prices. I understand 0-1 for calls and -1 to 0 for puts. The delta alters the option price as the stock price moves up or down. Do any of you on here take this into consideration when say doing strategies like vertical put spreads? Thx for any input
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New comment Jul 15
5 likes • Jul 4
@F. Ma I have never traded a LEAP, wanting to... learning it. I see others in this community also trade LEAP and everyone seems to tackle it differently. Several buy a 1 or 2-year out call LEAP ATM, not deep ITM around delta 80 or higher. Do you pay attention to the extrinsic? I believe when buying, we want to minimize extrinsic, maximize intrinsic relative to the option premium. If buying ATM, most of the option premium is extrinsic. What is the typical delta you open for the long call? Thanks
1 like • Jun 28
@Leon K 111 is a combination of PDS (1 long put, 1 short put), and 1 naked put. The PDS strikes are above the naked put. 112 is a PDS (1, 1) and 2 naked puts. These are neutral and bullish trades, but has a built-in hedge if market is bearish. The hedge comes from the PDS (1, 1). Your question about target profit %: if you received $100 credit, 60% profit is basically you close when the position premium has decayed 60%, ie close the position with a debit of $40, you got $60 profit I select short delta using Vix as a reference. Low Vix 13-14, I go with delta 11-12
2 likes • Jun 28
@Leon K I can get them filled. If bid-ask spread is wide (low liquidity), do the natural convergence approach: offer mid, wait a bit, pull back and watch if the other side move; behind are computers, they approach your price but immediately pull back. Take note what they offered. Offer slightly less than mid but close to what they offered and pulled back…. good % of time I get filled. Note that you are not trading with a retailer, you trade with institutions or very large wholesalers’ computers with algorithms. They (computers) try to entice you to give a better offer and they have specific best price and they won’t go beyond. This is 2 minutes exercise if you really want to open a position, if not offer one tick higher and let the market (computers) does what market wants
May 24 inÂ
A way to earn a little money today
I just found out that Webull will pay you and me...both of us... $60 if you open a new Webull account and fund it with any amount of money. We can each invite 10 people. Hope you will use my referral code. I can sure use the $60 lol...sure you can too. Happy trading. I am watching all of you doing so well and one day I hope to be doing half as well as you. Start your investment journey! Get started with 12 free Fractional Shares by opening & funding a #Webull brokerage account! Use my link to get started >> https://a.webull.com/gsHcagWilo89FEKKZx
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New comment Jun 25
2 likes • Jun 25
@Sandra Van Den Ham National Bank options’ fee is high (too high) and may leave you with little or no profit if your position is small. IBKR currently has the cheapest options fees in Canada. To trade stocks, etfs, national bank is good, no fee.
Jun 24 inÂ
tiny little option spread with Eric's help
I sold my AMZN spead today for a small profit. Only risked $500 and made about $37 in 4 weeks. Just didn't want to worry about it anymore so I closed a few days early to learn how to use the IBKR phone app. Not easy to me. Waiting for my statement to come out tomorrow so I can see the real number. Options are really out of my league...so I am being very careful. Thanks for the help Eric. Still want to understand basic options. Find IBKR very confusing...even when I call in for help. So not taking too much risk...just following along. Will try cc and puts one day...but likely stay right away from spreads. Prefer the spreadsheet balancing idea. Thanks Marc. I can do balancing. Have a wonderful day...my basement just flooded a few days ago...so distracted yet again. Love reading about everybody's journey.
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New comment Jul 4
7 likes • Jun 24
Options were confusing when I started. I learned from visual examples. I used to draw the strikes, their relative positions and difference between credit and debit spreads. Once I sorted out visually the differences, the rest was history. Maybe you can try with visual examples. Once you can mentally mapping out the strikes, using IBKR should be easier and becoming natural. Many YouTubers list the options chains prices in ascending order from lowest to highest, meaning lower strikes at top of their screen. I found that confusing because charts have higher price at the top. In my case, I have options chains with higher prices at the top. This was a hurdle for me; once I sort it out, everything is easier. Hope my past experience, mental hurdles give you some inspiration to trade more with options.
Feb 23 inÂ
Sometimes I wonder, if what we do is too complicated?
I have a few trading accounts most follow the calendar spread. Returns beat the market on a yearly basis. I have one that does not do to IRS and brokerage limitations. I am not able to do spreads. I can buy/sell, cash secure puts and covered calls. I tweaked this account to only trade leaps on five companies, rebalance anytime the option price lets me sell or buy with staying at the set allocation balance that's established each calendar year. To my surprise this has done dramatically better up 94% for last year, and already up 24.21% Everyday we are learning and new methods can be developed. If I see another double this year big changes will be coming..
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New comment Jul 4
1 like • Jun 23
@Marc Graybush Hi Marc, I am new to this group. Thanks for sharing. Did I understand correctly your LEAP strategy is to buy a long call one year out ATM, not deep ITM? Is there a reason why you went with ATM? Thanks
1 like • Jun 24
@Marc Graybush got it. You don’t hold so spending less makes sense 👍
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@minh-nguyen-2273
I am a futures and commodities options seller and long term dividends holder. Looking forward to learn from others.
Active 5h ago
Joined Jun 17, 2024
Canada
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