Conservative option strategies, what did you buy or sell today?

[fenders53]

Theta decay is another important term to understand. As a seller it is your friend. As you are starting on the learning curve I would keep my expirations 45 days or less for now. You can sell options out 6 months or more but it's like watching paint dry on a low beta stock. With shorter duration contracts you can work through the cycle on more positions and get comfortable with how they move as they get closer to expiration. You can study until you have your option PHD lol, but some real experience with your money is valuable.

[NilesMike]

(08-16-2021, 06:47 AM)NilesMike Wrote: Looks like a good day to sell puts in XLE. Looking at Sept 17 48 strike for 1.10 ish

An abject lesson in taking a profit when it presents itself. Closed it in August for 50% of credit, would have still been sweating it since then.

[fenders53]

I did the same with all my more speculative stocks this year. Unfortunately my XLE headed south in 48hrs and was never profitable. I've been spoiled collecting 80% option profits most of the time for years but those days will end. It makes a difference that I have been trying to actually own the stock half the time but that is generally not the case since the market run up

[fenders53]

Closed a lot of bullish options today.
Some only 50% profitable. Ugg that's weak Mike lol. I can't imagine the next few weeks festivities cause a big run after this mornings bounce. We'll see but I have a lot of free capital to work with.

[NilesMike]

Anyone ever check out No Guess Trading? Interesting concept.

[fenders53]

(09-26-2021, 07:57 PM)NilesMike Wrote: Anyone ever check out No Guess Trading? Interesting concept.

I have not heard of that before.

[Dividendwayfarer]

It looks like my XOM shares under covered call at $60, expiring at 10/15 may get called away. I thought it’s pretty safe to set it at 60 when I sold it and no idea it goes up so much and so quickly.

[fenders53]

(09-27-2021, 11:29 AM)Dividendwayfarer Wrote: It looks like my XOM shares under covered call at $60, expiring at 10/15 may get called away. I thought it’s pretty safe to set it at 60 when I sold it and no idea it goes up so much and so quickly.

It's part of the income/hedging game.  If you are going to do it you have to look at all of your actions through up and down markets.  Some months you sell ten covered calls and they are all just easy money.  Next month 3 or 4 tickers run on you and it looks like a bad plan.

About the only advice I have is never sell a call that leads to a big loss on the shares you hold.  ou have to be patient and get close to your basis.  Don't sell calls on your core positions anywhere near the money.  IMO you need to believe in something long-term or you aren't investing.  Sell calls on market darlings and you will give them away soon enough and regret it.  I've certainly done that.   

Oil is what it is.  Look at a 10 year chart on XOM and you aren't crazy to sell calls.  This isn't your last chance to buy oil. 

I get 50 small to medium checks a month selling options.  I try to not dwell on the 2 or 15 that were a bad idea any given month.  You'll drive yourself crazy if you worry about each position too much.

[Dividendwayfarer]

(09-27-2021, 12:10 PM)fenders53 Wrote:

(09-27-2021, 11:29 AM)Dividendwayfarer Wrote: It looks like my XOM shares under covered call at $60, expiring at 10/15 may get called away. I thought it’s pretty safe to set it at 60 when I sold it and no idea it goes up so much and so quickly.

It's part of the income/hedging game.  If you are going to do it you have to look at all of your actions through up and down markets.  Some months you sell ten covered calls and they are all just easy money.  Next month 3 or 4 tickers run on you and it looks like a bad plan.

About the only advice I have is never sell a call that leads to a big loss on the shares you hold.  ou have to be patient and get close to your basis.  Don't sell calls on your core positions anywhere near the money.  IMO you need to believe in something long-term or you aren't investing.  Sell calls on market darlings and you will give them away soon enough and regret it.  I've certainly done that.   

Oil is what it is.  Look at a 10 year chart on XOM and you aren't crazy to sell calls.  This isn't your last chance to buy oil. 

I get 50 small to medium checks a month selling options.  I try to not dwell on the 2 or 15 that were a bad idea any given month.  You'll drive yourself crazy if you worry about each position too much.

That’s good advice. I am mentally prepared to get rid of those shares when I sold a call and I usually priced it to take a small or modest profit if it got called away. Now I just wonder if I should buy it to close as the potential upside may be lucrative. Greed is something I need to manage.

[fenders53]

Buy it back if you are sure oil is going to moon. Sometimes I roll up or down if I am going to be paid today. If not I am just defending an ill timed trade and I move on. I sold XLE puts and they were down fast. Rolled them and got paid again. Completely solved a month later with a decent profit. If you can't make money moving to a new option it's pointless.

And yes you have to manage greed. You also have to manage water over the dam emotions. Won't be the last time you miss the timing. I sold XOM puts at 53. 56 would have paid better. Or maybe 60 or 65 by next week? Booking the gain and calling it a win because if is.

[vbin]

Got a BMY put assigned, sold out of oxy in 1 account on the pop today. Still have oxy, EOg and XLE in oil.


Wrong thread.

[NilesMike]

(09-27-2021, 07:04 AM)fenders53 Wrote:

(09-26-2021, 07:57 PM)NilesMike Wrote: Anyone ever check out No Guess Trading? Interesting concept.

I have not heard of that before.

https://seekingalpha.com/article/4407562...cted-value