/biz/ - Business & Finance

If you are bearish on XHB, you might consider a bearish strategy in it. XHB’s 17% IV rank points out that its IV is relatively low, and that debit spreads could make attractive strategies. If you think XHB might drop back down in the next few weeks, the long put vertical that’s short the 56 put and long the 58 put in the Dec weekly expiration with 42 DTE is a bearish strategy that has a 65% prob of making 50% of its max potential profit before expiry and that generates $.07 of positive daily theta.

>>24054776
redpill me on xhb

>>24054688
thank you for posting the tastytrade link, I'll check it out since I'm a noob.
what do you guys think about the wheel strategy?

>>24055089
Two things that have been surging of late are housing starts and coronavirus. The former is due to cheap rates luring buyers, and the latter is due to heavy coughing at real estate closings. It’s just the natural reaction when agreeing to take on a huge slug of debt. Of course, XHB, the ETF that tracks homebuilding stocks, has been rallying, too. That’s why if you think the coronavirus might spook buyers and put a lid on XHB, you might consider a bearish strategy in it.

>>24055247
Perhaps i should include some affiliate link to collect smth from you lads, but anyway, i am only selling premium if thats what you are asking

>>24055250
>>24054776
do you work at XHB? careful this can be considered insider info

>>24054688
Please explain options to me like im a child. I would love to get into this but I am not sure on the process. I have skimmed various sites to gain a little bit on info on how it works, but if you could explain to me in your own words, I would appreciate it.

Sincerely young grasshopper

>>24055463
not even close, im a shipping guy

>>24055247
I still don't get how far otm you should go when wheeling. You aren't supposed to ever roll a wheel option, and just sneak by as close as possible to assignment and then let them expire worthless.

GOD FUCKING DAMMIT, I finally sold gme at 11.9 and shorted and now its staying at 11.9 as the floor, its gonna go down right anons

>>24055489
options is insurance for your positions, you buy and you sell premium which is based on the black scholes model (subject to volatility)

Expensive options = a lot of fear in the market = you sell options

Cheap options = little fear = you should buy premium / long volatility

Its a bit hard to explain in a more simplistic way i think

>>24055559
16 - 20 delta is your answer, your rule of thumb, your golden rule

>>24055463
What about that seems like any insider info?

>>24055595
You mean .2 off of .5? or do you literally mean .2 and .8

>>24055657
i dont understand the question, 16 delta is the optimum selling option on high IV, what is 0,2 ?

>>24055714
Well wheel goes both ways you need to know the delta for selling covered puts as well, which makes saying 16-20 delta meaningless, because it could mean off of 50 delta in either direction.

>>24055859
I see, i just normally suggest those delta for either naked selling or verticals as those are my primarily suggested strategies. I also tend to suggest to be 45 DTE and manage your positions at 21 days in order to avoid gamma exposure

What strat do you guys use to profit off spy?

>>24056282
vertical spreads and iron condors, that shit literally doesnt move 80% of the time at all , the distribution itself is leptokurtic

I have a scalping bot (only trade crypto) that I wrote that is doing really well but the March crash has me traumatized (I made a bit of money that day but it was dumb luck and things could have been devastating). I can tune how aggressive/risk averse I want to be but if there is say a 15% candle drop I can lose a lot. How can I use options to help me?

Say My bot makes about 1%-2%/week while being aggressive, should I buy OTM put/calls using say 0.5% of invested/week to protect against such drops? That would be like 25%/year for insurance although It could be made back with one mega-candle which is somewhat common in crypto. Is there a cheaper way though?

Again I am interested in crypto options to protect against flash crashes mainly (but flash pumps as well). I guess some direction to start would help. Is there any software that's good for backtesting crypto-options or am I going to have to write this one myself?

>>24056511
Deribit options are p2p, liquidity is shit, and i have not had any positive experience as you cannot build simultaneously any position on deribit, but its by far better than bitmex. Options on BTC is still shit i think, im waiting tastyworks to include btc maybe in the future

>>24055595
>black scholes model
Explain why algos always have wide ranges on lower volume options. Really annoying when i have to move in their favor both ways.

>>24054688
If you can't afford spreads, what's the best play? So far I've just been buying OTM calls and getting lucky

>>24056784
aren't wider bid/ask spreads common when volume is low on anything, options or not?

>>24056784
low volume exposes securities to higher volatility if something comes up.

>>24057101
Pure luck , but I'm happy u made money fren
>>24057205
Yes that is correct

>>24056511
You could buy puts to lock in your gains.

>>24056784
Market makers are what they are , there are many reasons to avoid low liquidity markets especially options market where u need to be able to dump them before expiration

>>24054688
just lost 7k on tsla call what to do anon?

>>24057690
oh nvm you mentioned that already

You can always do things the old fashion way and set up price alerts so you can turn it off in an emergency.

>>24057723
How did u loose it fren ?

>>24054688
yes

I recently started losing all my money on options. I've set myself back further than any of my gains.

What's the best options to kill myself with and should I try not to cry if I get a hooker?

I would like to hear my frens sharing ideas on the software they are using , is options flow a meme ?

>>24056723
I am going to use Deribit. I am not really worried about liquidity since I am a small fish though, I only need 5-10 BTC contracts to be fully covered (will be doing ETH too though).
>you cannot build simultaneously any position on deribit
What does that mean? Like having an open long and short at the same time?

>>24057690
what percentage of gains should I be locking/would be enough? What I'm basically looking at is a straddle-type strategy but the specifics elude me, are there any books that have case studies or something like that? Most options books are heavy on the math and seem overkill for what I want.

>>24057744
>sold 510 call yesterday bcos i think tsla is overvalued
>now hate tesla

brainlet ikr

>>24057974
Get a wife , give her kids , that will be Ur cure and Ur reason not to loose money again , hookers is a short term solution and a bad investment

>>24057995
Exactly , you will not be able to buy simultaneous legs only one by one. Apply for a portfolio margin account and use their tool to build your positions , it is extremely helpful and should keep you floating in the positive most of the time

>>24058010
Did u sell naked ? Can u roll? You have every right to consider tsla to be overvalued

Eventually Ponzi will collapse

>>24057995
Just look up protective put or married put to get some useful variables you can use. Just a quick search of that found this:
https://www.poweropt.com/marriedputhelp.asp

>>24057101
Any recommendation for a $500 play? I was selling spreads but I'm poor and the gains were dogshit so I pulled most of my money out of the boomer market.

>>24058063
>Get a wife , give her kids
it's corona

>>24058104
How would u define poor gains ? Sincerely curious

>>24058090
no sirs bought 510 call all time high and being miserable ever since looking at the inclution yesterday and nothing happened i figured it'll tanked but moon instead

KMS

>>24058135
No better time to appreciate the little things in life , Corona Chan truly showed us many things we were missing . People started gardening again , spent time with family , a lot of things we took for granted suddenly were taken away

Any reviews about duckdao.io?

Please, take a look and share your opinion about their Crypto Incubator and investment system. Want to take part but try to find more info about it

>>24058207
My fren, try to sell verticals on high IV for a start , try to aim puts and not calls as markets have always a bullish bias especially with so much liquidity

>>24054688
Would it be better to start now or wait a month until the election fiasco is over and the lockdowns settle in? Been wanting to do TQQQ/SPY calls for a while

>>24058299
I think you have no reason to wait , volatility is still historically on the high side , and just fyi all the big guys expect more volatility for 2021

>>24058208
yeah
and it showed me I'm 30 and SOL
I'm gonna find a woman when they're closing down bars and gyms and cuffing season is already like halfway over? Nah get real

>>24058253
is barchart the best place to check on high IV senpai?

>>24058325
As u wish fren , this was merely a suggestion
>>24058336
I have fdscanner as a link on top but I also look around the high volume options at my broker's high volume list by myself as sometimes I'm directionally biased

>>24058253
> aim puts and not calls
long puts or short

>>options is hard, shitcoin is easy - too risky

>>24058410
Short puts , shitcoins is not even gamble as gambling you have actual probability of making money

Is this just buying options, or is writing them welcome here? I sold GME 12/04/2020 10.50 P for $1.07 and have been laughing at the Theta decay.

>>24058467
I have been arguing that we should only sell 16-20 deltas or maybe max 30 with 45 dte and manage our positions at 22 dte

im an options noob
i made a cash covered put option which has now made more profits than the premium i received,
if i sell now do i get the full profit or just the profits from the premium

>>24058445
thank you anon, i hope to see /og/ again tomorrow gtg

>>24058518
A bit hard to believe how that happened , care to elaborate a bit more

I am Schrodinger's options trader. I am simultaneously horrible and amazing. I need to eliminate the half that is horrible. Like seriously I need to kneel that guy down in a dirty alley and blow his fuckin brains out. So please continue this options board so I may learn to annihilate that weekly options trading retard.

>>24057974
Remember you pay hooker to leave

>>24058569
Weeklies is a gamble my fren, you have gamma exposure , go further out , and try to play as many times as possible with high probability trades

>>24058569
>continue this options board
>board
tourist detected but I also like the idea of this thread and possibly getting tips from anons in here so I'm gonna forgive you
speaking of which did anyone else look into BCRX after that anon mentioned it yesterday? seems like he was expecting good news in early December, one of their new drugs getting approval or something like that

>>24058151
I only recently started trading again (I blew up an account a few years ago buying otm weeklies).
But I wasnt even breaking even since I sold bear call spreads at the end of august and closed them at a loss too early, and then opened bull put spreads and ended up closing those at a loss. Then I opened more bear call spreads on the bounce and ended up closing them at break even. But I'm not joking when I say I'm poor, my initial was like $1500 lol...I think I'd need an initial of like 10k or even 5k for theta gang strategies to be worth it.

>>24058566
maybe im just reading it wrong? the premium i got from the trade was 100, i don't really know what im doing desu lol

>>24058504
>16-20 delta
I do 28-33 delta then place a limit order to BTC for <10% my STO after fees.

how do turn $150 into $1500 on risky options trade?

>>24058777
you get extremely lucky, that's it
there's no way you're gonna 10x something in a short amount of time without just getting lucky
instead of aiming for that just be happy to make 2% gains here and there consistently

>>24058679
Comments like this make me happy , I did not expect the thread to have so much positive feedback , hopefully we will be more than the lads in smg
>>24058702
Not true , you can easily start with 2k just don't expect to become a millionaire next month
>>24058753
That's a fair approach I guess , BTC is not as volatile as people think and the options are almost always overpriced on deribit
>>24058843
This

>>24058719
At this level of gain you might as well close it and redeploy the capital

>>24059064
>BTC is not as volatile
I mean Buy To Close.

>>24059152
I have lost my faith in BTC after march and April , so I'm gonna concentrate only on options , perhaps in the future if we get proper options on BTC I will reconsider , and yeah it ain't as volatile as IV implies , at all , and liquidity is shit

>>24058093
ahh thanks anon, this more or less looks similar to what I want. I knew there would be a name for it but I didn't know what it was

>>24058518
When you write a contract you collect credit, you can buy it back for less than the initial credit if it decreased in value, or for more if it increased in value. You don't end up with more money than that you collected. That percentage is if you were to buy to close immediately how much you would have made since you opened it. Think of it as locking in your gains and exiting the trade.

So I posted in /smg/ this morning, started a brief conversation about the pros/cons of managing a short put vs just letting it expire. I'm generally unconvinced that you gain anything by btc-ing except in very specific circumstances. Interested to hear others opinions on this.

>>24059684
Managing is always statistically superior I think , especially naked , take the profit and redeploy . 21 dte is the management day

>>24059736
Or at 50% of max profit I would say , depends what's first , I start to believe I want a USD value over percentage, so maybe more aggressive on delta selling and closing at 200 USD profit

>>24054688
UK optionsbro here. Made 200k from puts on airlines, cruise companies and hotels back in February but haven't had too many profitable trades since

Currently have 50k in deep OOTM 2023 call options on PM miners

The choice for options brokers in the UK is really shit. I use IG in a spreadbet account as its totally tax free but you can only buy and sell options on companies with a 2.5bn and higher mcap

I also have a tastyworks account but it is awkward as fuck to transfer money into it, you essentially need a US bank account and they will charge you £50 each time you withdraw any money to your bank account

I can say soon the Uniswap will meet real competitors on the DeFi market. I can say, the Dymmax (dymmax.com) has all possibilities to lift even higher tothemoon. What do you think?

>>24059684
I think it depends on how much more effectively you think you'll use that cash. If you have a method to make more money in the same timespan than letting it expire, obviously you should cash out.

what's the best way to play options with a bankroll of like 2k

>>24060140
Wait for a black swan and capitalize on it. That's what I did earlier this year, buying puts as the market crashed.

>>24059684
Theta decay increases over time, so if what you wrote is far otm at expiry you stand to gain a lot more if you wait, however if the underyling swings like mad you don't have any protection unless you locked your gains in with another option.

I have a question. How much does theta affect the value of an option that is ITM? I know theta decay devalues OTM options to 0 by expiration, but what if a $1 option suddenly goes ITM at expiration? How does this expiration price compare to the price you say sold that option at (OTM) 30 days prior?
basically im asking, if you sell an OTM call with say delta ~ 0.3, wait till expiration, and the call suddenly goes ITM, will you still make money even if you have to buy the call back (and then in theory roll it?)

I know it's not a lot of premium, but why do people buy shit like this? First time trying covered calls.. any tips? Selling covered LEAPs is so tempting for that juicy premium, but I also don't want to lose my shares kek

>>24060245
It still goes to "zero" where that baseline is the difference between the execution price and the actual price of the underlying. Although I can't honestly imagine buying it back at that point, why not just let them execute and buy something new to sell? IV changes so much from month to month that the optimal stock to sell calls on is rarely the same.

>>24060321
because im thinking of selling calls on my boomer sp500 index fund and i never want to sell it, but i want my freemium

>>24060378
There might be a way to set up your broker to automatically buy back the call as soon as it's ITM, but I'm not sure. You'll probably still make some money in most of those situations, and they should be rare events as long as you're setting your strike price high enough.

>>24060378
First rule of covered calls is you never write one on stocks you don't want to sell.

>>24060482
yeah, but with low enough delta it should be relatively safe with a month until expiration. i dont really expect a moonshot on the sp500 monthly in the near future, do you?

>>24060537
moonshots are always pretty hard to anticipate. this is the main argument against selling covered calls by accountant types, you can't anticipate black swans and miss out on the major gains

>>24060294
>but why do people buy shit like this?
I know that posting /wsb/ is heresy here, but to answer your question:
https://www.reddit.com/r/wallstreetbets/comments/jwt08e/the_big_fd/

Also sometimes algo hedging.

>>24060090
Which miners? Some aren’t as liquid as others, wrt options. E.g: Great Panther, but some are cheap enough that you can buy and hold shares and not worry about decay.

>>24060537
No, I don't expect it. I didn't expect Kodak to go to 50 in a day, but it happened.
Just prepare your anus if it happens.

>>24060482
>>24060579
another question, the breakeven price on an option order that is shown when youre about to execute (ie for a covered call, the price above which i would lose money on the trade), is only taking into account the value of that option THAT DAY, right?

>>24060888
It's based on at expiry.

>>24060966
i know the breakeven is evaluated for at expiration but the value of the option used to calculate the breakeven has to be the value of the option on the current day, right? theres no way theyd try to guess the value of the option at expiration?
like if i sold a 30 day call for a stock at a strike of $82 and got $115 from the sale, my breakeven is displayed as 83.15 (82+1.15/share). that's using the current value of the option, $115, NOT some at expiration theoretical value

>>24060204
Ah truly a good advise , what's the next black swan ?
>>24060537
Exactly , there is a reason I try to argue 45 dte
>>24060708
I will forgive you this time

>>24061109
The price is calculated based on how much debit or credit there was then added to the strike to create the breakeven at expiry.

If you look at the current of the option will be based on the bid-ask spread which can make the value look like it fluctuates wildly, because there is such little volume and people can add and remove orders which changes the estimated price (what is used to graph the value of the option usually)

>>24060888
The break even is for assignment. If the difference between the stock price and the strike price is more than what you made in premium, getting assigned means you're eating ramen.

Is there a daily strategy consensus lads ? Let's share thoughts, the thread is evolving very nicely. I vote for 1 credit spread / day at 20 delta with 40 dte and management at 20
IV over 30 and Ivr over 50

>>24061260
Not really , it's as if you would short X with 100 shares of it and you are underwater , you should either make sure you have the capital or the broker simply close that position for you

>>24054688
Reporting in, Call Debit Spreads for TSLA making me feel great right now

>>24061260
ah i see what you mean. im retarded. the actual value of the option makes no difference unless youre planning on buying it back lower, in which case youre already on the winning side of the break even anyways. hmmm

>>24061320
I always cover my options with equity or cash. I haven't even done a vertical spread yet.

>>24061412
It's fairly simple , but again I will refuse to go back to any other broker aside from tastyworks now , Saxobank (yes I'm a europoor) was utter shit

Does anyone still have that mega link some anon posted the other day? The one with all the options books

>>24061459
I downloaded the books anon , I can repost if you want

>>24061480
Much appreciated if you did!

>>24061480
Can you add that to the next op?

>>24061529
Good idea

Thanks for the feedback.
>>24060139
This is definitely one clear reason to buy-to-close: if the option had already lost most of its value, then I don't gain much by waiting for the final few dollars to drain out.
>>24059774
>>24059736
These are the rules I'm more skeptical about. Some of it might depend on specific strategies, so let me explain what I've been doing so far: I sell a 0.30 delta put each Monday that expires that Friday. My objective is to capture the very steepest part of the theta decay.
Managing at 21 dte makes me think you're selling much longer expiries.
Likewise, locking in at a certain percent max profit seems counterproductive (from a risk-management perspective, ignoring redeployment reasons), because the only time you get there is when the price action has already gone your way, in which case the risk has also substantially decreased.
>>24060209
Like you say, the final days are risky, but the risk is essentially evenly-spread. Either you're outside the gamma-spike, and price changes won't matter, or you're inside it, and it's as likely to go in your favor as it is to screw you. But if your business is selling insurance, then sometimes you have to pay out.

>>24061537
>>24061529
>>24061497
https://mega.nz/folder/wwVH0KLB#HkcUbCIz_Q-NyELfEA0P1A

there you go boys

>>24061459
https://mega.nz/folder/wwVH0KLB#HkcUbCIz_Q-NyELfEA0P1A

>>24061624
>>24061636
Amazing, thank you /og/s

>>24059684
if youre sitting at an option you know is not going anywhere near expiration then you can just let it sit, if you think theres a chance it might swing and you want to double dip, you buy to close

>>24061579
interesting, do you have any backtesting on your strategy ? what are the returns ? are you selling credit spreads or condors ? or naked?

>>24061579
>Likewise, locking in at a certain percent max profit seems counterproductive (from a risk-management perspective, ignoring redeployment reasons), because the only time you get there is when the price action has already gone your way, in which case the risk has also substantially decreased.
This is why I hold my itm spreads until expiry unless the underlying is like a mile above them. They go into the 90+ delta range so you can just comfortably accumulate a percent or two a day until expiry.

Just wrote 100 Nov 27 PLTR 16 Puts and someone bought them at .25. Free money boys

Everyone and their mother is buying gme puts. Should I?

>>24061841
Yeah. I'll take your money.

>>24061841
where do u see that ?

>>24061893
I was looking at the January 15th puts and there were over 220 buy orders and like 10 sell.

>>24061966
335 to 26 on the $16.

>>24062020
For GME? That's over 3.25 in the money.

how about this one lads
https://imgur.com/oU88yKq
im really bullish on BA

also maybe an iron condor on BABA

>>24062301
BABA too volatile for my money. Genuinely unsure if Ma is gonna get assassinated one of these days.

>>24058410
Short puts are risky right now because the stock market is at an all time high.

>>24063106
we keep saying TSLA is a ponzi, and it keeps squeezing that gamma to oblivion, eventually it will drop to 100-200 usd i guess, but same applies to everything, when you have QE of the proportions we do, there is nowhere else to put your money aside from equities until the bond rates come back to life

>>24058777
long tesla

>>24063177
I don't think TSLA's a ponzi, I just don't agree with people about why they think it's worth so much. They're betting on the future value of owning the primary road fuelling company for all EVs in the US.

>>24063522
yeah i mean obviously im exaggerating, they have just been selling government issues environmental certs and present it as profit, does it make sense? not to me, so i think a fair value should not be anything over 100 usd at this stage , but thats just me

>>24063605
profit's profit, imo. Hell, under a dem administration those sorts of certs might even get more valuable. But still, I'd agree, that's not the kind of thing that justifies its current market cap, that price is determined entirely on their belief of where it'll be in the future.

>>24063800
SpaceX plays a part as well. And it’s more of the fact that they’ve proven successful in mass scale EV production the past few years, with relatively little other interest/adoption of EVs, few charging stations, and selling Luxury sedans of all things, cars that other manufacturers have gotten rid of from their lineups.

If they can do that with the type of car no one wants, imagine them making a $40000 crossover or a pickup? Going to skyrocket

>>24063864
I know that you're right about SpaceX playing a part, but that's pure retardation since the two companies are unconnected

>>24062146
Yes