Both GME bulls and bears would love to hear of a strategic plan, but that will probably never happen with RC, and without new information, GME will likely be range-bound for a while, which makes it the perfect environment for selling option.
Look into GEX, which is gamma exposure. Market maker gamma exposure can have a "pinning " effect on some strikes as delta hedges are unwound. Not sure how GME behaves in this regard or how easily available the data is for GME, but it's probably worth looking into if your trading gamma
Yup, that’s what I do. I was wondering if someone had a fancier approach. My issue is that I like to roll on Fridays, before the options expire, so I’m getting the expiring options in the GEX measure.
GME has an Implied Volatility of 93% and Realized Volatility of 51%. There’re no guarantees in life, but GME is absolutely a great stock for selling options.
We’re more likely to have a recession than not, but the stock market doesn’t necessarily always reflect the economy. I’m personally out of stocks until at least June.
Remember folks, Recession is based on lagging indicators. It takes two down quarters to be a recession, so earliest date recession would be recognized would be June. Most are expecting market recovery in June/Jul/Aug timeframe. So it would be in recovery by third quarter. Nothing is guaranteed, all of this speculation is best guess. We do know if you move from current position, you are selling shares at a loss (right now values are down, nothing lost). If you stay in (continue to invest) you have more shares when the value goes back up.
Meh, if all I knew was that yield curve inversions tend to lead to recessions, then who am I to bet against that indicator? I’ve been in cash since January and just moved to bonds a couple of weeks ago. I didn’t get out of stocks at the top of the market, and I will definitely not perfectly time the market to get in at the bottom. I’m not trying to maximize my gains, but I am trying to minimize my loses.
Most of the traders may be selling puts, which means that there is an over-supply of puts. The put-call ratio and max-pain are pretty useless since we don’t know if the dealers are short or long which options.
The market is either trending up or down. When it’s trending down, like in 2022, selling cash-secured puts on SQQQ has been profitable. I prefer to sell options on leveraged broad market ETFs to get higher premiums rather than on individual stocks, which can drop 40% on a single day.
Interest rates always fall during recessions. Now, you just have to decide whether the economy is more likely to grow or contract within the next six months. My money’s on a recession.
I moved everything to G fund in January. We did well! I just moved everything to F fund. Bonds may still get choppy for another quarter or two, but I believe that inflation has peaked, which means that F has bottomed. Stocks have not bottomed.
This is a timely post. I was very close to buying an ATM put on SPY last week that would expire in February. I have never bought a call or put before but my thought was it would not be bad to have some insurance going into next year.
Since the SPXU and SQQQ have a bullish trend, I sell slightly ITM puts. If my short puts will expire ITM, then I roll down to a lower strike for the following week. If my short puts will expire OTM, then I roll up to a higher strike price. I roll every Friday. Some weeks I lose, but mostly I win, and I never stop rolling.
We have two parties in this country that are committed to keeping the rich people rich, we are the greatest country on the planet at doing that and will be for the foreseeable future.
Buy the OTM strangle because the premiums are cheaper. Sell the ATM straddle because the premiums are more expensive. I don’t like the wheel strategy because I get assigned shares when the underlying drops (and my short put goes ITM), which means that I’ll have to sell an OTM call to compensate for the mean-reverting tendency of stock prices. In other words, I don’t want to sell an ATM call immediately after I get assigned shares.
What should scare you is when unemployment starts to rise, and all the passive retirement account inflows stop and maybe turn into outflows if the newly unemployed decide to take money out of their retirement funds to pay for their mortgage and credit card debts.
Rules-based allocation is not market timing. An example would be target-based retirement funds, which is age-based allocation. When to re-balance is also rules-based, depending on how much divergence you allow before buying and selling one fund for another.
It's risky without the cash to secure your put, but you can make it slightly less risky by simultaneously selling a covered call against the shares that you already have. The call premium will help offset your losses if the underlying share price drops.
Short term treasury gets my vote. If you have less than a five-year time horizon, it would be crazy to buy stocks as the Fed is raising interest rates.
Any investment that causes you to lose sleep at night is too risky for your personality. Everybody has a different tolerance level Investing in the stock market is o different than buying a house. If you’re not comfortable with the price and commitment level, then don’t do it; otherwise, you will panic sell at the worst time.
In the old days, people increase their margin debt. These days, people buy calls instead of shares.
Nice! It would be good to also show average implied move, just to make sure that there’s nothing special about the upcoming earnings report.
I’m confused how this is such an issue. Paying taxes is part of making money. Near 5% in a week. 0.60 on 13.30 isn’t bad.
You’re fine. Never anything wrong with taking profits, regardless of size. If GME is around $12 on Friday, just roll them for another week.
Consider buying deep ITM LEAPS calls to secure your short weekly covered calls. It’s called a “poor man’s covered call.”
True true. Would like to hear some kind of idea on exactly how they plan to deploy some of that $$. I think this topic is for another sub though
Both GME bulls and bears would love to hear of a strategic plan, but that will probably never happen with RC, and without new information, GME will likely be range-bound for a while, which makes it the perfect environment for selling option.
I couldn't agree more it's been quite lucrative thus far.
More than fair analysis, which aligns almost completely with my expectations and why this is a great stock for selling options.
Higher risk ATM of the stock falling past my strike and me being stuck with heavy bags.
Why not just sell slightly ITM calls to maximize the premium and buying a deep OTM put to limit your loss?
Hmm not a bad idea to hedge it with a put and get more premium.
The Collar Options Strategy Explained in Simple Terms
Look into GEX, which is gamma exposure. Market maker gamma exposure can have a "pinning " effect on some strikes as delta hedges are unwound. Not sure how GME behaves in this regard or how easily available the data is for GME, but it's probably worth looking into if your trading gamma
Yup, that’s what I do. I was wondering if someone had a fancier approach. My issue is that I like to roll on Fridays, before the options expire, so I’m getting the expiring options in the GEX measure.
Bankruptcy != Large price drop
GME has an Implied Volatility of 93% and Realized Volatility of 51%. There’re no guarantees in life, but GME is absolutely a great stock for selling options.
[удалено]
I have been selling puts and calls at the strike with the largest net gamma exposure but was wondering if anyone had a better approach.
We’re more likely to have a recession than not, but the stock market doesn’t necessarily always reflect the economy. I’m personally out of stocks until at least June.
Remember folks, Recession is based on lagging indicators. It takes two down quarters to be a recession, so earliest date recession would be recognized would be June. Most are expecting market recovery in June/Jul/Aug timeframe. So it would be in recovery by third quarter. Nothing is guaranteed, all of this speculation is best guess. We do know if you move from current position, you are selling shares at a loss (right now values are down, nothing lost). If you stay in (continue to invest) you have more shares when the value goes back up.
Meh, if all I knew was that yield curve inversions tend to lead to recessions, then who am I to bet against that indicator? I’ve been in cash since January and just moved to bonds a couple of weeks ago. I didn’t get out of stocks at the top of the market, and I will definitely not perfectly time the market to get in at the bottom. I’m not trying to maximize my gains, but I am trying to minimize my loses.
Most of the traders may be selling puts, which means that there is an over-supply of puts. The put-call ratio and max-pain are pretty useless since we don’t know if the dealers are short or long which options.
csps on sqqq and gme
Are you me? 😁 I only sell options on those tickers.
The market is either trending up or down. When it’s trending down, like in 2022, selling cash-secured puts on SQQQ has been profitable. I prefer to sell options on leveraged broad market ETFs to get higher premiums rather than on individual stocks, which can drop 40% on a single day.
I am long TSLA 100P January2024 that is currently up almost 70%. LEAPS print money as long as you pick the correct direction.
Only if you think interest rates will fall
Interest rates always fall during recessions. Now, you just have to decide whether the economy is more likely to grow or contract within the next six months. My money’s on a recession.
I moved everything to G fund in January. We did well! I just moved everything to F fund. Bonds may still get choppy for another quarter or two, but I believe that inflation has peaked, which means that F has bottomed. Stocks have not bottomed.
This is a timely post. I was very close to buying an ATM put on SPY last week that would expire in February. I have never bought a call or put before but my thought was it would not be bad to have some insurance going into next year.
I sell weekly puts on SPXU and SQQQ.
What delta you work with typically?
Since the SPXU and SQQQ have a bullish trend, I sell slightly ITM puts. If my short puts will expire ITM, then I roll down to a lower strike for the following week. If my short puts will expire OTM, then I roll up to a higher strike price. I roll every Friday. Some weeks I lose, but mostly I win, and I never stop rolling.
We have two parties in this country that are committed to keeping the rich people rich, we are the greatest country on the planet at doing that and will be for the foreseeable future.
😄
Hey OP, thanks for the News post.
It's an official tweet from placer.ai
Buy the OTM strangle because the premiums are cheaper. Sell the ATM straddle because the premiums are more expensive. I don’t like the wheel strategy because I get assigned shares when the underlying drops (and my short put goes ITM), which means that I’ll have to sell an OTM call to compensate for the mean-reverting tendency of stock prices. In other words, I don’t want to sell an ATM call immediately after I get assigned shares.
What should scare you is when unemployment starts to rise, and all the passive retirement account inflows stop and maybe turn into outflows if the newly unemployed decide to take money out of their retirement funds to pay for their mortgage and credit card debts.
Rules-based allocation is not market timing. An example would be target-based retirement funds, which is age-based allocation. When to re-balance is also rules-based, depending on how much divergence you allow before buying and selling one fund for another.
It's risky without the cash to secure your put, but you can make it slightly less risky by simultaneously selling a covered call against the shares that you already have. The call premium will help offset your losses if the underlying share price drops.
Short term treasury gets my vote. If you have less than a five-year time horizon, it would be crazy to buy stocks as the Fed is raising interest rates.
Any investment that causes you to lose sleep at night is too risky for your personality. Everybody has a different tolerance level Investing in the stock market is o different than buying a house. If you’re not comfortable with the price and commitment level, then don’t do it; otherwise, you will panic sell at the worst time.
Uh oh... Oh Shit 😱
Nah, it’s funny. 😂
WMT at 133 should do well in a recession, so there’s much lower risk than TSLA.
I agree with everything, but Comment 10 was the cherry on top. 🍒