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

[fenders53]

(07-07-2021, 09:23 AM)crimsonghost747 Wrote: I've been messing around with GOLD quite a bit here.
I think it's in a decent place under $22.

Also, my first ever bull put spread.
BABA 205/200 (september)

GOLD looks good here.  I've had a few dozen good option plays and a couple gold plays in trouble now as I chased a few too high.  They roll fine and it plays out but ties up some capital.  

I talked about this for well over six months but finally started doing it a month ago.  I have a $100K cash basket I wanted the first half to be safe for use under two years, so cash is what it should be but just .20% interest isn't working for me.  It was ten times that under two years ago.  I took half of it and have been selling conservative puts in stocks like JNJ-PEP-PG when I catch them on a bit of a dip.  Trying to not be greedy and staying out of the money.  So far so good.  A few more months and I'll have less ridiculously low yield locked for the entire $100K.  That's a low hurdle for now.

And good luck on the spread. Done correctly they are a good strategy IMO.

[NilesMike]

(07-07-2021, 09:23 AM)crimsonghost747 Wrote: Also, my first ever bull put spread.
BABA 205/200 (september)

Curious as to your expiration choice?
Sept expires after earnings.
The daily return if successful is $2.90
July expiration would return $15.00 per day and has a lower delta

Just asking

[crimsonghost747]

(07-07-2021, 07:18 PM)NilesMike Wrote:

(07-07-2021, 09:23 AM)crimsonghost747 Wrote: Also, my first ever bull put spread.
BABA 205/200 (september)

Curious as to your expiration choice?
Sept expires after earnings.
The daily return if successful is $2.90
July expiration would return $15.00 per day and has a lower delta

Just asking

Hmm, you do bring up some good points.
Honestly I'll have to admit that I didn't even look at the July one. But now that you point it out, I probably should have. I might have some more thinking to do around this position. 

Overall I do think that BABA is undervalued and it'll go up at some point, so more to say that here I think time is on my side. I do not mind having the earnings in between as I think a good report is more likely than a bad one. And yes, I do realize this is a bit more risky but with a spread I'm fine with taking on a bit more risk. I just didn't realize that I'm actually not really getting paid here for the additional risk I'm taking. 

But this is exactly why I like to post my stupid trades here. You guys are much more experienced and can easily spot oddities in my trades that I don't see myself. Thanks, this is how we learn new stuff.

[NilesMike]

(06-15-2021, 04:09 PM)crimsonghost747 Wrote: This thread has been quiet.

I currently have: (all short positions)


I have to say that I honestly have a bit too much money in options at the moment. I don't have much experience playing with these longer term ones so it's a bit difficult waiting all this time for them to expire before starting new positions.

You seem to be good with your direction, try giving debit spreads a go. Buy the long leg where you expect price to go and sell a leg a few strikes further along.

They tie up as much or little of your capital as you choose and can be much quicker and have tremendous returns on your money.

If one is good directionally, this is where the $$ is.

[crimsonghost747]

Not too sure how I feel about anything with a debit, but it's definitely something I'll look into.
In general I'm absolutely terrible with timing, which is why 99% of my trades is selling puts or covered calls. The chance to roll forward for more $$$ has been great for me, my timing can be wrong (and often is) but it usually ends up working well with a roll or two.

[fenders53]

(07-08-2021, 11:00 PM)crimsonghost747 Wrote: Not too sure how I feel about anything with a debit, but it's definitely something I'll look into.
In general I'm absolutely terrible with timing, which is why 99% of my trades is selling puts or covered calls. The chance to roll forward for more $$$ has been great for me, my timing can be wrong (and often is) but it usually ends up working well with a roll or two.

Go with what you find comfortable until you have some repetitions in.  I wish my IRA broker would allow spreads as I would do a few each month.

I hear you on the timing.  I have months when I am barely 50% correct in the first few weeks after I open a trade and it still works out 10 or 11 months a year. If you keep playing with anything gold I promise you will refine your rolling skills.  It consistently works with those stocks.  Rolling the strike in your desired direction and collecting a little more money will lesson the pain of missing the direction.  Doesn't work with more predictable stocks.  If they run 15% in the wrong direction you might as well just eat it.  Enter wheel phase and sell a CC or eat it.  (which I am not quick to do if it's real money).  I swung and missed bad on CMI.  I'll be making a decision today.

Another thing to consider if you end up rolling GOLD options.....  Don't go out too far on the date if you are faced with a roll.  First of all you have to wait until they are almost expired or you are buying back premium if they are anywhere close to the money.  That has been true 100% of the time for a year. If you get the extrinsic down to pennies you can roll forward a couple weeks and collect more money, maybe move the strike a little too.  If you start selling metal options months out you are about guaranteed the price of the underlying swings up and down multiple times during the contract.  You are just tying up capital that could be making better income.  I prefer to be at decision point every few weeks.  Roll it again or just accept assignment if you think you are the top or bottom of the short-term range.  Definitely not proclaiming PM expertise.  I actually avoided them for decades.  Just my experience with about 50 contracts over the past year.  It's been fairly easy to dance my way out of fairly big moves in gold spot prices.  Gold spot hasn't moved 10% since my first trade but income month after month.  Sideways works just fine.

[fenders53]

I have a question, and it's not all the important if I get an answer but I am curious.

I sell puts on ALE fairly regularly, and occasionally a call if it spikes. I never intend to buy them back because the options are just too low volume. It's just a hassle. The stock is not particularly volatile but it can be intraday so premiums can be decent. I throw out a price I like and when I have a minute I'll adjust it down. I get my way or I try again another time. None of that really matters other than the point that it is a lousy choice for quick trades. The spread will get you if you are in a hurry to close.

Anyway I was called out of my ALE shares a few months ago on a covered call sell at 70. I sold a couple JUL 16 Strike 70 put contracts at 1.20 and 3.00 over the past 24 days. I was exercised today and these were the only two ALE put contracts to trade today. My broker lists a 2:30PM trade at 1.00. The trade shows last price is this trade but it was an exercise so I am wondering if that number is somewhat arbitrary?

I was a little surprised as there is no ex-Div date in play. 90% of my put exercises involve an imminent Ex-Div date if my contract is way in the money. Maybe they are announcing BK tonight? I don't know LOL. I know it is highly unlikely I could have closed that option for $1.00 anytime today. I am just curious about the mechanics of an exercise.

[NilesMike]

I will speculate that the remaining open interest in ALE puts is MM options to offset some calls. You may have been the only one to have been trading unhedged naked puts in ALE?

YOU probably couldn't buy them back for $1.00 but THEY can.

I know you like these oddball low liquidity trades for the high premium but it really goes against most option trading strategies that stress liquidity first and foremost.

[fenders53]

(07-12-2021, 09:53 PM)NilesMike Wrote: I will speculate that the remaining open interest in ALE puts is MM options to offset some calls. You may have been the only one to have been trading unhedged naked puts in ALE?

YOU probably couldn't buy them back for $1.00 but THEY can.

I know you like these oddball low liquidity trades for the high premium but it really goes against most option trading strategies that stress liquidity first and foremost.

They weren't naked from my perspective but I understand what you mean and it is possible there were no corresponding calls open.  I don't search these odd ones out.  I can't think of any others besides ALE.  Not really part of my normal strategy.  I just do it to get my share count where I desire.  My UTEs went very flat due to economy slow down and ALE pays a good premium so I bother since I have no need to close them.  My ALE options return exceeds my ALE long shares by a good margin lately. 

In any event it's not a core holding so I have most of my shares back at a decent entry.  I was just surprised by the exercise.  It occurred to me another small retail trader wanted to close his puts and had trouble getting his trade to drop.  An exercise would solve that.

[fenders53]

(07-07-2021, 10:07 AM)fenders53 Wrote:

(07-07-2021, 09:23 AM)crimsonghost747 Wrote: I've been messing around with GOLD quite a bit here.
I think it's in a decent place under $22.

Also, my first ever bull put spread.
BABA 205/200 (september)

GOLD looks good here.  I've had a few dozen good option plays and a couple gold plays in trouble now as I chased a few too high.  They roll fine and it plays out but ties up some capital.  

I talked about this for well over six months but finally started doing it a month ago.  I have a $100K cash basket I wanted the first half to be safe for use under two years, so cash is what it should be but just .20% interest isn't working for me.  It was ten times that under two years ago.  I took half of it and have been selling conservative puts in stocks like JNJ-PEP-PG when I catch them on a bit of a dip.  Trying to not be greedy and staying out of the money.  So far so good.  A few more months and I'll have less ridiculously low yield locked for the entire $100K.  That's a low hurdle for now.

And good luck on the spread.  Done correctly they are a good strategy IMO.

It's nice when the market cooperates.  This is going very well so far.  Closed the JNJ and PEP put early and let my hair down on a new WHR put.  It's way out of the money at 207.50 strike so not what I do with my normal put sale strategy.  This is supposed to be cash so trying to control myself lol.  I am sure killing that .25% return on my ultra short-term bond where this cash was hiding out.  That was hard to stomach.

[crimsonghost747]

GOLD had another dip and all my options on it are expiring worthless today.
I tried to sell some more $20.5 puts 1-2 weeks out but didn't find anyone silly enough to buy those at the price I had set. Ohh well, maybe later today or Monday.

I'm not seeing that many great deals there right now but this GOLD play has been too easy (though really small income) for the past couple of weeks.

Also sold another U put. I'm in the position where I will start to get slaughtered if U drops much further.

[fenders53]

A lot of my covered calls worked out with this weeks dip. Rolled a CMI put sell a month for over $375 new premium. That was a gift as CMI got hit within days of my sell. In the money XLE puts are my next project.