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+--- Thread: Conservative option strategies, what did you buy or sell today? (/showthread.php?tid=1835)
RE: Conservative option strategies, what did you buy or sell today? - fenders53 - 04-20-2020
(04-20-2020, 06:17 PM)john Wrote: Looking for more nickels.Otter can explain it better but the short answer is yes USO is tied to the price of oil using derivatives. Oil futures contracts etc. It does move with oil. In the general direction anyway. This is a strange time when the spread between the current months contract and future months is enormous. The spot price of oil might move $3 and USO makes a nice move. A week later it might make a $5 move and USO doesn't move much......
What is USO? I get that its a oil ETF and that its very cheap, is it price of oil only that makes it move?
Was away from computer today and missed the oil meltdown today. Looking to either sell a PUT on it or maybe just buy 100 and sell a CALL.
On a sidenote my brother works for Marathon, fairly high up. When Saudi Arabia and Russia got into a pissing match I asked him what his breakeven was he said $42 /barrel they were makin a little $ High $30s they were starting to lose.
EDIT: Hold that thought, they just halted trading.
RE: Conservative option strategies, what did you buy or sell today? - john - 04-21-2020
Sold a PUT on WEN May 15 expiration 16.00 strike .94
RE: Conservative option strategies, what did you buy or sell today? - fenders53 - 04-21-2020
(04-21-2020, 09:12 AM)john Wrote: Sold a PUT on WEN May 15 expiration 16.00 strike .94
That's a good balance between a nice premium and decent stock quality. I've traded WEN many times. If it gets cheaper I would own it again. You might even get a chance to roll it forward for more premium. Who knows with this market?
RE: Conservative option strategies, what did you buy or sell today? - NilesMike - 04-21-2020
LMT Iron Condor was trading for 2.45 credit with 2.50 wide spreads. .05 Risk Expiry this Friday
400/362.50
My trade will be near end of day though, per strategy.
RE: Conservative option strategies, what did you buy or sell today? - fenders53 - 04-21-2020
(04-21-2020, 09:48 AM)NilesMike Wrote: LMT Iron Condor was trading for 2.45 credit with 2.50 wide spreads. .05 Risk Expiry this FridayI am very long LMT so I was hoping it would be at $500 Friday. I guess it can wait until next week.
400/362.50
My trade will be near end of day though, per strategy.
That looks like a good trade since earnings are out of the way.
Conservative option strategies, what did you buy or sell today? - vbin - 04-21-2020
I closed a spy put for profit today. Still have too many of them.
RE: Conservative option strategies, what did you buy or sell today? - fenders53 - 04-21-2020
(04-21-2020, 11:17 AM)vbin Wrote: I closed a spy put for profit today. Still have too many of them.I would do that methodically because you know what will happen if you dump them all at once right?
I intend to take my own advice but mine are longer dated so I can wait awhile longer for mayhem lol.
RE: Conservative option strategies, what did you buy or sell today? - vbin - 04-21-2020
(04-21-2020, 11:45 AM)fenders53 Wrote:Mine are September puts but still I think it's better to close them slowly. Not sure what u mean by not closing them all at once?(04-21-2020, 11:17 AM)vbin Wrote: I closed a spy put for profit today. Still have too many of them.I would do that methodically because you know what will happen if you dump them all at once right?
RE: Conservative option strategies, what did you buy or sell today? - fenders53 - 04-22-2020
(04-21-2020, 12:54 PM)vbin Wrote:I mean exactly what it sounds like you are doing. I was joking but not really. If I sell all mine the same day, you can bet the SPY will crash the day after lol. Did you see me crash the whole oil market by buying back my USO puts a couple days ago lol? Otter bought his SPY puts way early on for cheap. It's a little different when you are up 200-300%.(04-21-2020, 11:45 AM)fenders53 Wrote:Mine are September puts but still I think it's better to close them slowly. Not sure what u mean by not closing them all at once?(04-21-2020, 11:17 AM)vbin Wrote: I closed a spy put for profit today. Still have too many of them.I would do that methodically because you know what will happen if you dump them all at once right?
He was more patient than I likely would have been.
RE: Conservative option strategies, what did you buy or sell today? - Otter - 04-22-2020
So, along with today's buying spree in equities, I sold covered calls (weeklies, at most out to May 15) against a number of the added lots. $747.20 in option premium for covered calls sold against new purchases of ADM, EMR, LEG, NNN, NUE, O, ORCL, PFE, SON, TD, VFC, and VZ, with 5-10% gains on the underlying shares if I get called away.
Learned that the options market for BIP is too illiquid (massive bid/ask spreads and thinly traded) to mess with them. Also, premiums for WBA weeklies are pathetic, so I didn't bother.
Only playing this game with newly acquired lots of shares, but fun experiment so far. Suspect the premiums will fall off once volatility dies down, at which point I should just be holding anyhow.
RE: Conservative option strategies, what did you buy or sell today? - Otter - 04-22-2020
(04-22-2020, 07:49 AM)fenders53 Wrote:(04-21-2020, 12:54 PM)vbin Wrote:I mean exactly what it sounds like you are doing. I was joking but not really. If I sell all mine the same day, you can bet the SPY will crash the day after lol. Did you see me crash the whole oil market by buying back my USO puts a couple days ago lol? Otter bought his SPY puts way early on for cheap. It's a little different when you are up 200-300%.(04-21-2020, 11:45 AM)fenders53 Wrote:Mine are September puts but still I think it's better to close them slowly. Not sure what u mean by not closing them all at once?(04-21-2020, 11:17 AM)vbin Wrote: I closed a spy put for profit today. Still have too many of them.I would do that methodically because you know what will happen if you dump them all at once right?
Yes. I was buying SPY 308/305 puts expiring in October 20 or March 21 when SPY was at 330-337. VIX was near all-time lows at that point and put option premiums were laughably low. I could have made more selling all of them when SPY was at 220 rather than 270, but no one can ever time a market perfectly, and one of my rules I try to live by is to never regret making a profit.
I lost ~$2,200 selling my USO LEAPs purchased Monday at market open on Tuesday. Rolled those funds into XOP $43 LEAPs the same day, sold today to recoup that loss, plus some profit. Learned that those options are highly illiquid with massive bid/ask spreads. Done with just buying options for the moment. Keeping some cash to deploy if the other half of the market that is within 10% of all-time-highs decides to head down to where Consumer Discretionary/Financials/Industrials/Materials/REITs are trading.
RE: Conservative option strategies, what did you buy or sell today? - Otter - 04-22-2020
(04-20-2020, 06:17 PM)john Wrote: Looking for more nickels.
What is USO? I get that its a oil ETF and that its very cheap, is it price of oil only that makes it move?
Was away from computer today and missed the oil meltdown today. Looking to either sell a PUT on it or maybe just buy 100 and sell a CALL.
On a sidenote my brother works for Marathon, fairly high up. When Saudi Arabia and Russia got into a pissing match I asked him what his breakeven was he said $42 /barrel they were makin a little $ High $30s they were starting to lose.
Until yesterday, USO was an ETF that invested almost exclusively in the front month futures contract for West Texas Intermediate crude (/CL). It did a decent job of tracking along with the price of WTI during relatively ordinary market conditions, but was always subject to the sort of roll yield that goes along with such ETF structures (contango or backwardation, depending).
As of yesterday, no one knows what the hell USO is with any real degree of certainty. They've changed the structure of the fund three times in less than 48 hours. They no longer have SEC authority to issue new shares to fund futures contract purchases (probably because they were controlling over 30% of the front month futures contract, which was causing its own dislocation in the oil market). So, it's basically a closed-ended fund now, trading at a premium to NAV.
On top of that, the fund managers decided that allowing the fund to follow the value of WTI down to 0 or negative territory was not something they wanted to happen. So, rather than being 80% front month, 20% second month holders (itself a relatively recent change from all front-month rolled on a regular basis, IIRC), the fund is now some blend of futures contracts or other WTI derivatives, constituted completely at the daily whim of fund managers. It is no longer tracking WTI spot in any meaningful way, as a survival tactic. USO is now a black box. Putting any money into USO at this point is basically walking up to the roulette wheel and guessing red or black.