Conservative option strategies, what did you buy or sell today?
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Conservative option strategies, what did you buy or sell today?
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10-16-2019, 12:59 PM
Almost ready to try the SPX thing Mike. I practiced on something simpler today. Vertical call spread on Deere. Sold the NOV 175s, bought the 180s. Collected $170 net premium. Like taking candy from a baby.
 OK maybe not, but my downside max risk is $500 if DE goes parabolic. DE is running up on trade war soybean prayers.
10-16-2019, 04:48 PM
(10-16-2019, 12:59 PM)fenders53 Wrote: Almost ready to try the SPX thing Mike. I practiced on something simpler today. Vertical call spread on Deere. Sold the NOV 175s, bought the 180s. Collected $170 net premium. Like taking candy from a baby. Risk is 330 since you collected 170
10-16-2019, 07:37 PM
(10-16-2019, 04:48 PM)NilesMike Wrote:(10-16-2019, 12:59 PM)fenders53 Wrote: Almost ready to try the SPX thing Mike. I practiced on something simpler today. Vertical call spread on Deere. Sold the NOV 175s, bought the 180s. Collected $170 net premium. Like taking candy from a baby. You're correct of course, but the $170 cash is already in my account so it's down $500 from here if I mess this up. I am comfortable with the risk reward. To anyone reading this, it only qualifies as anything close to "conservative" if you are very selective. I won't be doing this with a stock that routinely moves 5% in a day. Most of my port is inappropriate because it is boring DGI low beta so that you can't collect a premium that makes the risk reward work. When the market is right I think I will occasionally do put spreads now and then on oversold stocks I intend to purchase at some point. If I get upside down I can transition to my long position and make the best of it. MMM, CAT, HON are future candidates, but at the wrong end of the trading range right now.
10-18-2019, 06:02 PM
I don't like the DE chart right now for that trade but it may pull back enough to expire OTM
10-18-2019, 11:29 PM
(10-18-2019, 06:02 PM)NilesMike Wrote: I don't like the DE chart right now for that trade but it may pull back enough to expire OTM Agreed. Industrials are stronger than I expected at the moment. DE frequently comes up on the weak end of earnings estimates but they scheduled report weeks later than i expected.
10-19-2019, 07:36 AM
I typically don't do well with call spreads and only do them in the context of an Iron Condor.
It takes no more margin to sell both sides than it does to sell one side. You can only be wrong on one side! LOL (10-19-2019, 07:36 AM)NilesMike Wrote: I typically don't do well with call spreads and only do them in the context of an Iron Condor. I may have to write off a charge and blow my earnings when I report next week lol. I was truly trying to test the software out. It may work out though. Yeah I know, hope is not a plan. I live about 10 miles from Deere world HQ and Iowa frmers that are just not feellin' a new $200K piece of equipment with the trade war. DE is laying off workers around here. I have no doubt AG is struggling, but there is more to Deere earnings than that.
11-06-2019, 08:01 AM
Soaring like a buzzard over SIX. Another put sale is looking tempting with that crazy dividend. Don't like their debt but they aren't going away.
11-06-2019, 04:13 PM
I don't want to be in that business, at all.
I've been mainly staying with cash settled SPX and VIX to avoid individual name risk or assignment on some dogs. (11-06-2019, 04:13 PM)NilesMike Wrote: I don't want to be in that business, at all. They are nothing but trades. 2019 SIX worked well but I would have gotten bit if I went long. Wrong time of year to jump into SIX or FUN. The day will come when a put looks good. I've been selling a ton of covered puts and it's been too easy for over a year. As long as I stick with companies I don't mind owning for years its a SWAN strategy. Just have to fight the temptation to chase anything. I'll be closing some more positions the next few days. Staying a little cashy is going to work out some month soon lol. Market is riding high on BS the financials just don't support.
11-13-2019, 11:15 PM
(11-13-2019, 07:55 PM)NilesMike Wrote: Getting some love on DE If I wasn't distracted this morning it would be closed while I am still ahead. I closed most of my puts a few days ago. Waiting for the dip that never comes for the next round. Selling CCs continues to be my nemesis with the everlasting bull run. Just have to take the good with the bad in an income strategy. The income has certainly been there.Whether the DE spread works out or not, you were right it wasn't a great idea at this time. |
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