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Daily r/thetagang Discussion Thread - What are your moves for today?

Daily r/thetagang Discussion Thread - What are your moves for today?

scrimshaw_

does MARA patent group actually have any um... patents? I searched all over [uspto.gov](https://uspto.gov/) and found nothing


awgggaabbb

True thetachads trade unsecured 200% IV weeklies on dogshit companies


spreadsgetyouhead

But have you tried naked calls on 600% IV companies?


awgggaabbb

Selling naked GME calls is already 20% of my portfolio


Equintex

Any recommendations for a broker in Europe which atleast shows me the greeks and isn't too expensive. Geez I have a shittybroker.


blazeitbets

IB


jackperitas

And they won't hesitate to f*ck you to save their asses


pennyking91

IBKR is aite for fills and fees terrible interface and customer support


tshk1994

Interactive brokers


Stonk-Butterscotch

IB is the best


Jack_The_Miner_1

Hey guys.Noob options trader here, just joined. Just saying hello!


tshk1994

👋👋👋


ivegottheshits

Which Youtube channels do you guys follow like **Chris Sain** where he just tells you what to buy that almost mimicks his portfolio? I have done call options for the past two years and I am burnt out. I am just looking for someone to follow/carry my portfolio the rest of the way without me even thinking too much into what to buy. I need a break from all the research and news. 😂


bobbybottombracket

Wrong sub.


pennyking91

no one's going to carry your portfolio for you... sounds like you need to buy-and-hold an index theta gang is great but it requires research, attention, constantly rolling, and is quite an intensive strategy


spreadsgetyouhead

Lmao just buy SPY if you don’t want to do anything and want a free ride with no effort.


johnso21

What % of your portfolio y’all keep in cash? I’m at 25% right now and I feel like it’s just sitting there...and I’m poking it with a stick...wondering why it’s just sitting there....and why it’s not working and making me more money


Arcticbeachbum

Well. I'm embarrassed to say I made some bad decisions and realized a big loss from playing to aggressively. That money isnt doing nothing, it's the ability to start over if you're a dummy and let fomo take your lunch money. Consider maybe parking it in VOO ?


tshk1994

30-50%. This week was insane. Went from 50 to 30 percent in 5 days lol. Everything was so green


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fogcity89

same, i keep enough cash to cover my positons. otherwise i am looking to utilize it. ARK is my generations VOO


fogcity89

Im curious when people say 1% ROI, do they aim for 1-2% ROI per trade? be it weeklies or monthly (30-45DTE) i usually do weeklies, aim for 30 delta, 1% of my CSP but always end the trade when profit reaches above 50%. so in actuality im never getting 1%


nevertoolate1983

I was wondering this myself! Personally I’ve been aiming for 1-2% per trade (on the weeklies), but I have no idea if that’s a good benchmark.


mildloneliness

this sub got ran over by the new retail wave 💀


tshk1994

Everybody has been there though at some point. I remember when r/thetagang would have max 300 comments in the daily tread lol. Help them instead imho


kepinbear

Weekly Recap for 2/1 to 2/5 Find my trades here: [https://thetagang.com/kepinbear](https://thetagang.com/kepinbear) **Trades Taken:** > 4 trades total. > * -1 NIO 58.5C (+$126) > * -1 NIO 57C (+$103) > * -1 BB 14P (+$18) > * -1 NIO 56.5C (+$125) **Current Positions:** > * -1 NIO 57C 2/12 @ $1.53 > * +100 shares of NIO (Cost basis at $52.68) > * +25 shares of GME (Cost basis at $117.92) **NIO** > Most of my plays this week were selling covered calls on NIO. I think I was able to profit from the drop in volatility that happened this past week, and I was exercising a lot more patience (or was really distracted with GME). Particularly with the last NIO trade, I was contemplating on letting it get assigned, but figured the extra couple dollars wasn't worth it. I took 3 trades on it this week and won a total of **$354**. **BB** > I took one trade on BB this week, and it spent a good majority of it out the money as BB dropped below $14. I was able to exit for a profit today for a **small gain of $18** as BB had a good spike today. **GME** > This was the one ticker that I kept my eyes on the most. I bought extra shares at what I thought was gonna be the dip, but it dropped way down to "normal" prices. I bought an extra 15 shares this week, bringing my cost basis up to $117.92. I'm currently looking at **losses of -$1,285.42 if I exit**, but I will continue to HOLD THE LINE and try to exit for a profit. **Future considerations:** > Honestly, I think this GME experience has been good for me so far. I'm getting a lot more patient with my trades and learning how to really hold trades without letting my emotions get to me. The insane price movement, the amount of FUD appearing on WSB, and general vibe of stock market really helped me learn to really have firm conviction in the trades I take. Honestly sometimes looking away really helps with an anxious mindset. >In terms of defending my GME position, I think if we see GME dip down to the 20-50 range, I'll be looking to average down and buy 75 more shares to start selling covered calls on it. **Total P/L this week:** > * +$372 (Now if I add my current GME share losses, this would currently be at -$913.42 for this week!) > * Weekly Goal of $300 Met? **YES (NO LOL)**.


POSOO_the_SMASHER

Lol I've got a similar cost basis on GME and I'm kicking myself but also slowly convincing myself it's a good value play. I like the CSP's because it's like getting paid to set a limit order.


tientutoi

Nice plays!


kepinbear

I honestly feel like most of my plays are luck, but thank you, haha.


FlashBrady

Sell your GME shares and sell puts to recoup losses?


kepinbear

They're shares, so I don't mind bagholding for an eternity until I need the capital for some other trade! I'll be selling puts on the side to grow my account in the mean time!


Arcticbeachbum

What do you think the bottom will be? I sold at 60 thinking the shorts covered. Still have 35 shares left. My average cost was 220 a share.


kepinbear

It's kinda hard to tell when the bottom will be. Actual SI data comes out on 2/9, and Congressional hearing starts on 2/18. I'm thinking that if both go really bad, we could see pre-hype prices. Otherwise it might be worth to hold because GME is entirely impossible to predict and we like the stock. (Not financial advice.)


FlashBrady

Good looks


SenBaka

Can anyone confirm how selling puts on RH works with regards to margin? For example, if I've used all my cash can I use the 2x margin to sell puts? Do I pay interest on margin (I'm not actually using the cash unless I get assigned right)?


Fantastic-Doubt4445

I might need some clarification here. Sorry if it’s stupid. Just started doing CSP’s and been doing well, closed 2 csp’s from CRSR and Snap today with 70% profit. What I’m trying to understand is when you guys mention of “risks” is it about being assigned? And having to buy it? Because I actually don’t mind being assigned and selling covered calls on it. In the worst possible way.. the only risky part I see is when the stock price really tanks under my strike price that I have to buy it at a loss. Can someone explain it to me like I’m a 5 year old :/. I just want to understand the “blowing up” your account part. I find this less risky than buying call or put options outright. Thank you for your time.


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Fantastic-Doubt4445

Thanks for the input! I’m doing the wheel with full cash account and not using margin. Never tried spreads before either. Before, I was just a buy and hold shares.. then dabbled in buying options.


matttt22

So the max risk in selling CSPs is if the stock price goes down to $0. For example, if a company goes completely bankrupt. For example, you sell a CSP on company XYZ for $1 a share for a strike price of $10. Lets say expiration day comes and the stock is at $8. If you do nothing, you will be assigned and you now bought 100 shares (because 1 standard options contract is 100 shares) for $10 a share. Since you received $1 per share when you sold the contract, your cost basis is actually $9 a share so currently you are at a loss of $1 per share or $100. Now you are a stock holder of XYZ at 100 shares of stock that you paid $10-$1=$9 a share for (or $900). Therefore, your max risk here is if the stock price goes to $0 and you have lost all of your $900 investment. That is the max risk part.


Fantastic-Doubt4445

Thank you for the clarification. So basically sell csp’s on good companies and none meme ones. I feel a bit better now.


matttt22

Yes, you will want to sell CSPs on companies you believe will go up from the current price; the same way you would only want to buy a stock you believe will go up. However, you could also sell them on companies you expect the stock price to stay neutral and still profit (becasue you are receiving premium from selling the put). Also, to expand on the example of company XYZ if you get assigned, you can sell covered calls against it too. Every time you sell one, you receive additional premium reducing your cost basis even more (down from $900). For example, say you were assigned in the above example. You could now sell 1 call contract (to make it a covered call) for something like $0.50 a share for a $10 strike price. This would now reduce your cost basis to $850. You could keep doing this, theoretically, until the stock goes above your $10 strike price (and your stock gets called away), you sell the stocks at a gain/breakeven/loss, or the stock drops to $0. Technically speaking, CSPs could be considered less risky than simply buying 100 shares of a stock because you receive option premium with it which reduces your cost basis of the stock.


agentofdoom

You explaination so far has been very clear thanks. I have a follow up to better understand cost basis, lets continue your example and we sold a covered call at $0.50 with $10 strike making our cost basis $850. What happens to the cost basis if the stock goes to $11 and we let the option get executed? So your 100 stocks go away and you get $1000 for them making your balance $1050 (strike * 100 + 50 for the premium). Is that your new cost basis? Maybe I just dont completely follow cost basis just yet if I can't figure out this next step.


matttt22

"So your 100 stocks go away and you get $1000 for them making your balance $1050 (strike * 100 + 50 for the premium)." Think of it this way: (strike * 100) $1,000 is your proceedes from selling the stock. You have already received the $50 when you sold the call, which reduced your stocks cost basis. So you are reducing your cost basis the moment you sell the call and receive the $50 call premium, not when you are selling the stock. After you sell the call, the stock price could go anywhere, your cost basis will remain the same. So in this example, the cost basis gets lowered every time we sell a covered call. So if you sell the $10 call for $0.50 your cost basis is $850. If the stock price goes up to $11, your $10 call will be assigned and your stock will get called away at $10 so you receive $1,000. Your cost basis is $850 so you have made a total of $250 on this trade. Even if the stock goes to $90 a share, the profit for you and cost basis will be the same because it will get called away at $10 with a $8.50 cost basis. To help understand cost basis further, let's say that option does not get assigned and expires worthless. Let's say the stock is around $8.80 now and we would be comfortable selling at $9 a share since we, technically, have only paid $8.50 for the stock (cost basis). So we sell a $9 covered call now and receive $1 a share in premium ($1 x 100= $100 total). Now our cost basis is $8.50 - 1 = $7.50 a share or $750 total. If, on expiration day, the stock goes to $12 our stock gets called away at $9 a share. We have to sell for $9 a share so we receive $900 but our cost basis is $750 so we have made $900 (proceedes) - $750 (cost basis) = $150 total profit. Another example, on expiration day, the stock goes down a little and is at $7.60 a share. The $9 strike call we sold expires worthless. Our cost basis is $750. Let's say we decide to not sell any calls for a while and the stock goes up to $20 a share. At $20, we decide to sell the stock. The cost basis is still $750 so we would receive $2,000 so we have made a profit of $2,000-$750 = $1,250. Cost basis is how much you have paid for the stock, less any premium received from selling call optsins on that stock. Therotically, you could keep selling calls against your 100 shares of stock and, if it never gets called away, you could actually end up with a negative cost basis. The idea is, when you finally sell your shares, either by outright selling or getting called away at a certain price, you can calculate your total overall profit by subtracting your cost basis from the proceedes you received by selling the stock. So, the lower the cost basis is, the better.


agentofdoom

Okay thank you so much thats crystal clear. I sold my first CSP yesterday so hopefully things go well for me.


matttt22

No problem. What stock are you selling CSPs on out of curiosity?


agentofdoom

I looked over at the thread yesterday where someone asked what stocks people were wheeling on and I just looked through some of them to find ones that I wouldn't mind owning. I started with 1 put contract on RKT at 20.5 expiring 2/19. I just want to make sure I get the mechanics right (simple stuff like making sure I'm clicking the right buttons lol) then I'll start doing maybe another one. I meant to do that for 2/12 but I think I selected 2/19 and didn't double check but I'm not that concerned. Might do another one for next week. The next thing I got to read up on is figuring out which stocks and which strike/expiry date to pick. I saw people were saying aim for a high IV so I got to figure out how that affects the contract prices. Then I figure I look through the list of companies I have on my short list to find one that seems like a good pick.


Fantastic-Doubt4445

I would feel the cost basis would go back to when we start another csp on the stock no? Since if our covered call gets called away we sold at profit plus premium.


matttt22

You are correct, when you sell your stock or it gets called away and you start a new CSP, your cost basis gets 'reset.' However, you receive the premium the moment you sell an option. Therfore, it is best to think of your profit as "procedes - (stock cost - premium) = profit" as opposed to "procedes plus premium = profit."


Fantastic-Doubt4445

Thanks for taking the time to explain this. I’ve been just buying 100 stocks outright and just started covered calls on them in November. I just started csp’s last week to do the wheel strategy.


pdogmcswagging

Your understanding is correct. As long as you don’t mind owning shares and selling calls on them, you’re good. You can blow up your account If say you sell a put for 35 and stock goes down to 20. It’ll take a while to recover since you own stocks for $35.


SailingforBooty

When I was first learning about selling options, hearing "blowing up" your account scared the shit out of me - like zeroing your account. But after figuring out what the term really meant, I think if you do your best to mitigate risk/loss on stocks you already plan to go long on, your portfolio will have much steadier growth than throwing all your buying power into buying options. I just started shorting so I'll see how it goes.


Fantastic-Doubt4445

Yea, been lurking here for months and seeing “blowing up” the account really refrained me from starting the wheel lol.


pdogmcswagging

Agreed...and esp buying 0 DTE options and hoping to hit the jackpot


SailingforBooty

Good for shorters though lol


Fantastic-Doubt4445

Thank you sir!


Selling-ShortPut-399

r/optionsbadgers Options Trades 2/5 -$183 net today. Not everyday is an up day. This is part of the trading life. I took max loss on three positions in BlackBerry (BB) and Bed Bath and Beyond (BBBY). These are my shame. I should have known better than to trade on meme stocks but even I take small calculated gambles every now and then. Opened Positions Z 3/19 $130/$125 put spread $108 credit SPY 3/26 $345/$330 ps $111 credit GM 3/19 $48/$38 ps $114 credit 2 RKT 3/19 $18/$15 ps $128 total credit 5 F 3/19 $10/$8 put spreads $105 total credit MA 3/19 $305/$295 ps $110 credit QQQ 3/19 $298/$288 ps $87 credit 2 TSN 3/19 $60/$55 ps $110 total credit Closed positions BB 2/5 $15/$14 ps $100 debit (max loss) BB 2/5 $17/$12 ps $449 debit (near max loss. Shame!) BBBY 2/5 $36/$31 ps $499 debit (max loss. Shame!) ARKK 2/26 $130/$120 ps $70 debit PIN 2/26 $64/$55 ps $32 debit


T0m0n0

Those are some very risky roi. Did you actually put up $200 for a $21 credit for F? $1000 for $87 credit for QQQ?


Selling-ShortPut-399

I don’t know if I would classify them as very risky. I would say these are less risky, boring trades. My short put is 10% below current price. These are not the riskiest securities to write options on which is why IV is so low at the moment. In an effort of to have a portfolio of diversified options positions I will sometimes open these types of positions that give me around $100 on a $1,000 spread. I am not comfortable trading only high IV securities.


T0m0n0

Seems like risking $913 to make $87 is not worth it. Personally, that falls under the "picking up pennies under the steam roller" analogy. Ill do spreads on QQQ, but I'm looking for at least a 30% roi (before closing at 50-60%). Seems like it would be hard to defend a position when your max loss is 913 while crediting 87. Are you opening pcs on a red day?


Selling-ShortPut-399

I usually make more but off a qqq spread as of late but keep in mind VIX on Friday was at its lowest since before the Feb 2020 crash. This is just what the market pays when vix drops to about 20. I could wait for more volatility to return but sometimes the market goes for years with low volatility like this.


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TheThetaScape

I look at longer term CSPs in terms of annual return. The spread is pretty big at 30p, but assuming you can get it through at 7.70 that’s a 25% return for 7 months. You could sell the March 30p at 3.90 and get a 13% return in 1 month plus additional flexibility.


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TheThetaScape

You could also look at a 25/35 covered strangle if you are long PSTH. 100 shares + sell the 25p and 35c. Premium is around 400. 500 + premium to the upside, 25.50 cost basis of you get assigned on the put. Now that I’ve looked at it will send this Monday if it’s still at 30. Thanks for putting it on my radar!


POSOO_the_SMASHER

Remind me! two days


TheThetaScape

Hopefully that reminder went through pre-market!


pdogmcswagging

Today's plays: BTC\* SAVA 2/19 75p @ 28.90 x1 ($1200 loss in 1 day; dumb dumb dumb play) BOT PTON 1/21/22 145c @ 37.50 x1 (swing trade) BTC MARA 2/19 20p @ 1.56 x1 (25% profit; 1 day) BTC MARA 3/19 35c\* @ 3.75 x3 (total $150 profit) STO MARA 2/19 25c @ 1.95 x3 BTO SAVA 2/19 40p @ 4.70 (revenge)


cprivette

How can I do a PMCC on thinkorswim? Idk what I’m doing wrong, but it won’t let me buy less than 100 shares.


pdogmcswagging

you prob have a cash account where you need shares before you can sell calls on them.


cprivette

Do you know how I would be able to change it?


pdogmcswagging

Go to profile on tdAmeritrade website and click “apply for margin.”


cprivette

Thank you


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SailingforBooty

Maybe wait till after earnings if the stock price dips a bit.


pdogmcswagging

TFW when you & Cathie make the same move; BOT PTON 1/21/22 145c @ 37.50 this morning :)


exxcellent

Bought a $105c 1/21/22 and gonna start selling PMCC here


pdogmcswagging

I really wanna do that but have a cash account for now :/


Ykana1

Where did you see that she bought a call?


pdogmcswagging

Ya, she just bought shares. I didn't have enough cash to buy 100 or write a put so went with this instead. And also, I'm planning to do a swing trade, not hold it.


Ykana1

Makes sense.


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Ykana1

Yeah I have like 30 shares. Don’t know is their are sustainable enough after Covid to justify a leap tho.


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pdogmcswagging

yep, exactly. i think i'll take a decent 1k return and move on.


MangoManYummy

Jew to Theta Gang. Got 15k, what’s the best stocks to get premium?


eiruldJ

It’s cool whatever religion you are my man. We’re pretty accepting here.


Swagbag6969

https://old.reddit.com/r/thetagang/comments/l3yxn5/weekend_iv_report_stocks_with_high_iv_and_more/


spreadsgetyouhead

Scroll the thread and you’ll see 100s of stocks people are playing as well as asking the same question.


MangoManYummy

Sounds good thank you


bucketofchicken

Trying to understand risks of PMCC. Let’s say your short position gets ITM and they exercise and your broker exercises your LEAP to give them the shares. Don’t you immediately lose money? (The extrinsic value of your LEAP)


Captain_Yossarian_22

First- you can set up your trade so that you do not lose in a quick run up. I would recommend doing so as it is easy and lower risk. Second, you can roll the short leg up and out when it gets close to expiry and is in the money. You should be able to do so for some credit every time , and then you can capture more of the gains. Third, are you concerned about margin / BP type issues? Your broker should recognize that your long covers your short so is indifferent to going past it. Who do you trade with


okiedokiemochi

Harder to manage. Dont ever exercise the leap, you will lose all the time premium. Worst case, just close the spread altogether.


Swagbag6969

If something is itm and they exercise it, the stocks go to them and yes you lose the money over the strike price. They earned that extra cash.


spreadsgetyouhead

I wouldn’t be at a broker that automatically exercises your leaps which would vaporize all of the extrinsic value in them. How it should work is you take assignment of the shares followed by you making the decision as to closing the shares and writing another option or closing the whole position. If you don’t have the cash available to cover the assignment then the broker will likely float the balance for a brief period giving you time to make the decision intraday before closing it out themselves if you don’t make any effort. (Maybe more brokers do that than I thought but I personally have never experienced it.)


accountTWOpointOH

You need to roll the short leg up and out in that case. I don’t run PMCCs myself, but I’m thinking about getting into them myself. I believe most people try to target a delta of .30. The key is to manage the short leg andirons it gets greater than .30 then you start having to worry about rolling the call. You shouldn’t get into a position where day of expiration and you are ITM.


MillennialInvest

V-shaped portfolio recovery 😀 \+5.5% this week and never expected to be back up 5% YTD so soon given the price action last Friday. Closed a ton of positions and feels good to go into next week with a relatively clean slate at only 20% BP utilization. **New positions this week:** STO JNJ 3/19 $155P -1X STO FB 3/19 $240P -1X BTO VIX 6/16 $100C +1X (implementing black swan hedge strategy) **Positions closed this week:** BTC SQ 2/19 $190P +1X @ 60% profit BTC NKE 2/26 $133P +1X @ 60% profit BTC V 3/19 $190P +1X @ 50% profit BTC JPM 3/19 $120P +1X @ 50% profit BTC CRM 3/19 $200P +1X @ 50% profit BTC AAPL 3/19 $117.5P +2X @ 35% profit BTC FDX 2/19 $240P +1X @ 50% profit **Current positions:** [https://imgur.com/a/5bhS0t7](https://imgur.com/a/5bhS0t7)


jakestir

> V-shaped portfolio recovery Gotta work on getting the W shape around here.


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internetnewuser

And I bought Snap leaps early this morning at market open! Really happy with my timing.


TotheMoonbyNoon

What strike and date?


internetnewuser

$85C Jan2023.


Swagbag6969

>+$2,358.50 (+3.26%) Past Week OmegaPatgasm


SenBaka

ARKK IV is on the floor. IV rank is 30% and almost all of its top 10 holdings have ER over the next 3 weeks. My jan’22 $147c leap has lost almost 20% since the last time ARKK was at this level. Not theta strat but nobody else would understand options enough to play this right. Tell me how rolling up to deep otm leaps and getting long on vega is not free money?


spreadsgetyouhead

Could always turn it into a diagonal spread to help out your cost basis a bit


Garbadon

Ended up running a few plays today since I do more momentum style trading right now. Cr/De = Opening Credit/Closing Debit STO/BTC 10x 2/12 PTON 140p/135p 127Cr/96De 10x 2/12 PTON 143P/138P 129Cr/98De 3x 2/19 CRSR 35P 122Cr/103De BTC 5x 2/5 SNDL 1P 15Cr/1De 1x 2/5 APHA 16P 41Cr/3De STO 2x 2/12 APHA 16P 50Cr


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Original_Row_3349

I like that high IV and stable price. However volume is still 7X what it used to be even though price has stabilized. Options are every two weeks, so the highest risk put to short only gives 2% ROI weekly, not bad, but you can find that on other cheaper, more stable stocks. You can roll it I just don’t see anything jumping out as great.


KoreanJesus21

Can we change the sub description from “we are selling” to “we sell”, I get an aneurism every time I read that. Is that just me?


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KoreanJesus21

Even better


ruum-502

I like that too. Now I can’t decide which I like more.


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spreadsgetyouhead

Learning isn’t going to be as much of an issue as having enough capital to properly run the strategies without your account getting cleaned.


Ok_Capital2097

No joke. Consider Alaska crab fishing for one year or offshore drilling. Come back in one - two years with lump sum cash to start wheeling.


FlashBrady

He quit school when it got tough I don't know he's qualified mentally for those occupations


Ok_Capital2097

Once you go, no way back until finish. Maybe toughen him up too.


SwagOD_FPS

Sell monthlies around 45 days to expiration. Sell 0.2 to 0.35 delta on both puts and Put credit spreads. I only play companies I like that are in the bottom of their monthly or 3 month trading range. Always keep some cash in your account for a new opportunity/dips. Prioritize high IVR stocks. Manage winners at 50% profit or 21 days to expiration. Thats the basics for my strategy. Watch Tastytrades videos. Good luck.


FriendlyCaller

No. Stop quitting school, or go learn to program.


rice_n_salt

There are certainly a lot of complexities to learn around options and ‘running the wheel’. I might suggest making a bunch of paper trades for a month or two, tracked on Google Sheets or a test account at your broker, to learn and then start trading when you feel ready. When you start, please start small and make each position maybe 5% of your total capital. You could lose all your money, and this way you will always be able to recover.


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rice_n_salt

Good luck and update us with your learnings as you progress!


illusiveab

As time passes and an OTM option gets closer to expiration, it decays in value, making your selling of it more profitable.


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illusiveab

Put options are the right to sell a given security at a given strike by given expiration date. It wouldn't make sense to sell me a security at a $4 strike if the market price is $5. It's worth more in the market. However, if the put strike is $4 and the underlying is $3 in the market, I have a contract with you to sell it to you at $4 and I will because it's worth $1 more by selling it to me than it is in the market. That's what makes put contracts (and all options contracts) fundamentally valuable.


rice_n_salt

Here’s an example with some jargon explained: Let’s say you have a sell a cash secured put (CSP) with a strike price of 100 and it’s currently at 110 so it’s out of the money (OTM). If you were 45 days to expiration (DTE), someone might be willing to pay you 1.76 (premium) for that put, betting that there is a chance the stock will drop $10 sometime in the next 45 days. However, if you were 2 days to expiration, the chance that the stock might drop $10 in the next 2 days is much lower, so you might only be able to find someone to sell that put to for 0.13. Everything is the same except for the time to expiration. As you can see the value of the option drops as time passes. This decline in value over time is called ‘theta decay’. The idea is to take advantage of this theta decay. You sell a put and let time pass so that eventually it expires worthless to anyone out there, leaving you with the original premium you collected in your pocket. This is where your risk appetite comes in. Choose a volatile ticker with large premiums, or a steady non-volatile ticker with lower premiums. One that has high volumes also helps, as you can get in and out readily. Eventually, you can take this idea a step further to selling covered calls and then you are ‘running the wheel’. :)


bobbybottombracket

So SP500 is right at 2% YTD, if you're over 2% YTD now, you're doing it right!


fap_nap_fap

How’s your portfolio doing YTD?


bobbybottombracket

I've made 1,700, starting with 33,500 in my IRA. +5% YTD And made 530, starting with 9,300 in my small margin. +5.6% YTD My goal is +20% YTD in my first full year, for both accounts, of trading. Of course, I'll shoot for higher.


fap_nap_fap

Congrats, that’s awesome!


bobbybottombracket

Thx! I am still learning and always trying to add a new type of trade to challenge myself.


cvas

What are your average returns on theta? Say monthly? I'm trying to decide if this is better than buy and hold.


Original_Row_3349

Both. Different brokerage accounts and different strategies. One for theta, one for dividends, one for buy and hold, etc. diversify your portfolios and you minimize your risk of blowing up one account and being out of the game.


viciousphilpy

Your return is completely dependent on your ability to maximize your strikes, buy back at the right times, resell at the right times... I would bet my unborn children's children's unborn children that buy/writing will destroy buying and holding though. Even if done wrong.


AlfB63

If you are betting based on the last year you may find out you’ll lose that bet long term. I am not saying you will but it’s not as clear cut as you might think.


viciousphilpy

You’ll have to go to my unborn children’s children’s unborn children for the debt. It’s literally win/win


okiedokiemochi

Not really. Tastytrade had a video on this. Selling puts is equivalent to buy and hold, unless you are willing to lever up and do CSPs to 60% of your BP.


viciousphilpy

At least at my brokerage you can’t use margin for CSPs. Only covered calls because you can buy the underlying with margin.


Ashah491

It’s actually not true. I can’t find the thread but a while back we had this discussion and someone has posted a very informative link showing how buy and hold ends up being the better strategy over the long term. We’re in a massive bull market right now so theta could win but normally it won’t


viciousphilpy

Any analysis of buy and hold v. Theta strategies would be dependent on too many factors to be quantified with any modicum of accuracy. Ticker choice, strike price, delta, IV, strike date, alpha factors which depend on trader’s activity level etc. I would argue the underlying raging bull market is the only thing propping up buy and hold, in turbulent times having a short leg to draw value from will help you immensely.


Ashah491

Yea you’re right about the bull market. What I should have said is all this volatility we’re seeing is partly why theta is doing well. Or at least that’s my opinion


viciousphilpy

The bull market has been amazing for everyone, I am just very skeptical of anyone showing mathematic proof of buy and hold beating buy/write. Logically it doesn’t make much sense. These studies are likely very rigorous in their setting of a static delta to write the calls. They probably set the delta and don’t change it for any reason. They keep this so the parameters of the data never change, but a market doesn’t trade like that. They also likely didn’t rigorously check when they would have been exercised and what the underlying’s price was exactly on every Monday. And you can’t trust them to rigorously set the delta either, i back test things all the time and stock splits and illiquid options make a long work of it. To truly have editorial oversight on a study like that would take an incredible amount of time.


AlfB63

When I started doing options, I was concerned about that very issue. The problem is that over the last year or so, volatility has been historically high. That inflates returns of options in most cases. So be careful making conclusions based on data from the past year or so. What I have done is track my returns and compare against the markets and certain indexes. So far options have beat that except for the Nasdaq which is close to my annualized return of upper 70s for 2020. Technology stocks have done really well over the past year. I will keep tracking that and and expect to continue with options as long as that holds true.


FriendlyCaller

imo, it's worth diversifying strategies, just like anything else where you're not sure what will do better/worse.


SameSection9893

Any suggestions for stocks to write CCs on? I was loving PLTR for the last little while but sold out on the spike to 39, will jump back if it takes a dive after lockup but thinking it'd be good to look into others as well. BB or Nio I feel could be good picks, but curious if anyone else has any they'd recommend, thanks!


Kswans6

I’m just starting tbh, but I’m wheeling F, T, and LUMN. F because I held leaps for way too long and realized it’s a slow grower, sold 1 dte calls yesterday and netted $55. T and LUMN both have a nice dividends and fairly flat charts (especially T) so I figure once ex div announcement comes out I’ll just hold my shares and not write cc’s until after. Should net about 21 from the two of these with the 1 dte cc’s as well


SameSection9893

US dividend stocks are a bit tricky for me cause I'm Canadian(withholding taxes etc) but I dig F as a potential play, appreciate the insight!


Kswans6

For sure, I’m more of a GM guy but Ford seems to be turning the corner and growing somewhat well, they have an okay dividend too but overall I’ll probably hold for a long time, I don’t think the US government would let them go under


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exxcellent

You could have sold $4p CSP for AMC earlier this week and collect $1 3/19. That would have been the better trade since AMC hovered around $3 pre squeeze


FriendlyCaller

Is it foolish? Yes, unless your savings is very small. There's even an idiom to describe just how it's foolish. (don't put all your eggs in one basket)


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FriendlyCaller

I'm personally a big fan of materials, particularly gold, and paper rectangles.


Lmaoonadee

I might be in the minority here, but I don't think GME is going to drop to 5 dollars or below it. This is especially true when they're expecting upcoming earnings on 3/25, it wouldn't make sense (then again, crazier things has happened). Is it a bet I would personally take? Yes. The only thing foolish is if you put 100% of your account into it.


Kswans6

You’d only need $500 collateral for the 5p’s, correct? That’d be roughly 3% roi. Might hop on that honestly


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Kswans6

Would you be able to elaborate a little? I’ve been “investing” for a few years but still always learning and don’t know all the interconnectedness


DynoDwam

Is there anybody in here that owns theta tokens?


bye_stander

You're in the wrong theta gang


Ok_Capital2097

Did pretty good overall ☺️ But my short /MES hedge is showing $2k loss 🤡 I just like having negative delta.


eiremanvan

Any canadians here ? Any good tsx stocks to wheele?


internetnewuser

Options liquidity is an issue. I have mostly moved my funds to USD because of that.


eiremanvan

That seems to be the case. I've been eyeing up cad bank stocks but the premiums are dreasfull . What do you usually wheele yourself? Looking to get started at it


internetnewuser

I am currently holding SPACs puts and wheeling some SPACs. Also doing PMCC with IPOE.


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internetnewuser

Unfortunately, yes. However, even with IPOE being down the last few days, my long call didn't lose much value.


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internetnewuser

Interesting. I am not sure but I thought the options prices will increase with IV increasing. Maybe someone knowledgeable can comment. Would definitely love to know the answer!


SwagOD_FPS

Closed out almost all my Feb monthlies this week except a $22 RKT CC and a $50/$48 Twitter PCS Opened up an OPEN 3/19 $25 CSP Other than that I didnt see much opportunity this week to sell puts. Great week though!


Captain_Yossarian_22

Yep. Great week for the account, but mostly a case of realizing gains and not many new plays to make.


Shagga_Dagga

Same. I had a great last week and an ok early this week but it seemed like things dried up towards Thursday-Friday. More fun next week. 👽


POSOO_the_SMASHER

Hi, What an oasis this sub is! New to investing and got a little caught up in the GME craze. Have done a ton of research though and believe that the asset does have significant underlying value. So I'm content to just hold indefinitely, and sell GME CSP's all year for a modest profit. I don't mind taking the shares at around $40, especially with so many bears and anti-WSBers desperate to be proven right.


CaptainTheta

For sure. I've been running around harping GME, but realistically it's very possible that forward looking value for the company is actually even around or above current price. In terms of product offerings they've already started to pivot towards game related merchandise as opposed to relying on primarily buying and selling the games themselves. Combine that with a revamped e-commerce strategy and the advantage of receiving millions of dollars worth of global publicity thanks to a historic short squeeze and you get the potential for explosive growth. We don't know the full details of their e-commerce strategy yet and I haven't seen a single forward analysis of what a reasonable growth rate for the stock would be. Not a financial advisor of course. There's no way to predict the future... But I like the stock.