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Conservative option strategies, what did you buy or sell today?
#91
(04-13-2019, 08:04 PM)fenders53 Wrote: You having any problems on any positions right now Mike? Hopefully not. I'll check out DAN. I'm not familiar with the ticker.

No problems at present time. I don't have a lot open right now but they are balanced long and short directionally.

Can change quickly as you know.
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#92
(04-13-2019, 09:06 PM)NilesMike Wrote:
(04-13-2019, 08:04 PM)fenders53 Wrote:  
You having any problems on any positions right now Mike?  Hopefully not.  I'll check out DAN. I'm not familiar with the ticker.

No problems at present time. I don't have a lot open right now but they are balanced long and short directionally.

Can change quickly as you know.

Yes they can turn on a dime.  I typically have 15 or more open most of the time because most are truly conservative plays and I can let them ride when they should be closed sooner.  It's just a percentage game and I collect my targeted net income most every month, even when things go against me somewhat.  I do cry when one or two become a challenge to manage.  There is some purpose to that though.  I don't have such an ego that I need to brag here when it isn't warranted.   I don't ever want to make anyone think this is always easy so I will keep whining about the bad ones just to keep it real.
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#93
(04-13-2019, 09:43 PM)fenders53 Wrote:
(04-13-2019, 09:06 PM)NilesMike Wrote:
(04-13-2019, 08:04 PM)fenders53 Wrote:  
You having any problems on any positions right now Mike?  Hopefully not.  I'll check out DAN. I'm not familiar with the ticker.

No problems at present time. I don't have a lot open right now but they are balanced long and short directionally.

Can change quickly as you know.

Yes they can turn on a dime.  I typically have 15 or more open most of the time because most are truly conservative plays and I can let them ride when they should be closed sooner.  It's just a percentage game and I collect my targeted net income most every month, even when things go against me somewhat.  I do cry when one or two become a challenge to manage.  There is some purpose to that though.  I don't have such an ego that I need to brag here when it isn't warranted.   I don't ever want to make anyone think this is always easy so I will keep whining about the bad ones just to keep it real.

I try to avoid the "problems" by only selling puts in something I wouldn't mind owning. Otherwise I buy calendars or butterflies where the R/R is very good albeit a lower winning percentage.
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#94
(04-13-2019, 10:22 PM)NilesMike Wrote:
(04-13-2019, 09:43 PM)fenders53 Wrote:
(04-13-2019, 09:06 PM)NilesMike Wrote:
(04-13-2019, 08:04 PM)fenders53 Wrote:  
You having any problems on any positions right now Mike?  Hopefully not.  I'll check out DAN. I'm not familiar with the ticker.

No problems at present time. I don't have a lot open right now but they are balanced long and short directionally.

Can change quickly as you know.

Yes they can turn on a dime.  I typically have 15 or more open most of the time because most are truly conservative plays and I can let them ride when they should be closed sooner.  It's just a percentage game and I collect my targeted net income most every month, even when things go against me somewhat.  I do cry when one or two become a challenge to manage.  There is some purpose to that though.  I don't have such an ego that I need to brag here when it isn't warranted.   I don't ever want to make anyone think this is always easy so I will keep whining about the bad ones just to keep it real.

I try to avoid the "problems" by only selling puts in something I wouldn't mind owning. Otherwise I buy calendars or butterflies where the R/R is very good albeit a lower winning percentage.

That is my first rule for sure.  Discipline matters or you will get in trou ble soon enough.  Of course the story can change, and sometimes a month later I would much rather buy 25 shares  than 100 in a high SP stock.  Smile   If I decide to go long on a falling knife, I would average in for sure.  I think politicians are going to make some buying opportunities in the healthcare industry.  They have me hesitant to be overweight in anything related right now.
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#95
Quick question on rolling forward
I imagine the tactic is slightly different for calls and puts.
But say you have a covered call that looks to be expiring in the money. You just buy it back and sell one for the next week/month/whatever at the same strike? Or do you also mess around with changing the strike to adjust? Timeframe? I guess you guys regularly sell monthly options? I would be mainly interested in using these on a weekly basis, still worth it or not?

With puts I guess it's a pretty decent way to avoid getting assigned? Have you ever been in a situation though that you need to sell a put with a higher strike in order to get enough premium to make it worth it?
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#96
I do not roll, to my way of thinking it is but a euphemism. When you roll you are booking the loss and continuing to try and make the trade work. When placing the 2nd trade in a roll situation, I would ask, would you put this trade on if you weren't in it already?

I have a friend who will not let a stock "beat" him and will fight like a dog to scratch the trade. That mentality has not helped his returns and in fact has cost him many superior opportunities because he's tied up in some twisted "battle" with a particular stock. For example he has been rolling ES futures since 11/2016. He is short from 2,100. That's down $40,000 per contract while tying up the margin for 30 months now
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#97
(04-14-2019, 03:50 AM)crimsonghost747 Wrote: Quick question on rolling forward
I imagine the tactic is slightly different for calls and puts.
But say you have a covered call that looks to be expiring in the money. You just buy it back and sell one for the next week/month/whatever at the same strike? Or do you also mess around with changing the strike to adjust? Timeframe? I guess you guys regularly sell monthly options? I would be mainly interested in using these on a weekly basis, still worth it or not?

With puts I guess it's a pretty decent way to avoid getting assigned? Have you ever been in a situation though that you need to sell a put with a higher strike in order to get enough premium to make it worth it?

I'll try to make the answer brief. Let me know if I am not clear.  The short answer is yes, sometimes and maybe.  Smile

-puts and calls are pretty much require the same strategy, just the inverse in SP movement of course.
-sometimes I am rolling forward at the same strike, often I can roll it in my direction some.  With higher bet stocks the time value is high and I can almost always change the next strike.
-timeframe completely determined by individual situation.  How much time do I think I need for a good chance stock will reverse?  For a put, Is the stock still in free fall, or does it appear to be consolidating after a protracted decline?
-For a stock like AAPL, I've sold a cover call and the stock has run up fast.  My call is deep in the money.  Maybe I sold it initially at $2 I'll buy it back now for 12 and sell a new one further out for only 9 or 10.  If I can move the strike 5 higher I might be willing to be down 1 for now.  Maybe I have to do this again next month?  With time, I have repeatedly held my shares and it moved the right eventually.  I am on defense at this point.  I have moved my strikes much higher on AAPL and HD calls.  If I give up now, I am selling my stock at a much hgher price.       

I'll use made up numbers but here is how I have entered most of my pharma stocks like this.....

Sell puts on ABT for months and it finally falls in the money.  Maybe I roll it forward one more time and get an entry another a few points cheaper.  Or maybe the stock is saying a nice div in a week so I just take  my new shares and move on.  In my perfect world the stock swings higher and I can sell a cover call if I want to.  I try to always account for x dividend dates when I open any position.   I accepted assignment in DEC and after it ran I started selling calls.  Had to roll my calls forward once on ABT but it;s sitting pretty as a play over all.

Same process with MET.  I do own 200 shares but I've collected about 10 monthly premiums.  The SP is right where it was 6 months ago.  I've sold about 10 options and collected dividends.  Put premiums are high enough to cover a missed dividend if that is how it plays out.  I did roll puts nce during the late 2018 market down draft.  Certain stocks are just made for this income strategy.   

And yes rolling weeklies could work, but be prepared to have to go out a month because you will likely need to sell more time if you are upside down.  If the option is sitting on near zero time value you are at risk of early exercise.  Rare in my experience, but it definitely happens.  I've had shares stolen right before x-dividend at least twice. I make that harder to happen now by choosing expiration date wisely.  Push your luck on a dividend monster like T and you'll lose your shares, or get your put assigned shortly after the x-div date.
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#98
Thanks for the answers guys. It's an interesting concept, I think I'll give it a try if/when the situation presents itself.
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#99
(04-15-2019, 02:03 AM)crimsonghost747 Wrote: Thanks for the answers guys. It's an interesting concept, I think I'll give it a try if/when the situation presents itself.

You have to wait for your particular situation.  With the wild swings approx OCT-JAN, it made it easy to get out of trouble.  It also made it easy to get upside down in a trade in the first place of course.  I prefer my markets lightly choppy.  I find my strategy simple to manage then.   

I have felt it was prudent to roll about six times during the past 4 months.  Usually to get out of selling my long position way under current market value.  That is where I am finding it the most challenging lately.  It's worth it to move my strike $10.  Especially if the cost is free, or very close to free.  As Mike said there are times when you just move on.  Especially if the story has actually changed in the meantime.  I may get some more practice with UNH later this week.  Smile

My forum chatter is probably further confusing because I am doing two things. Attempting to hold a basket of DGI stocks long term, using options for better entry, and more income after I own them. And of course some option trades on the side because that is just fun lol. Underlying is always as stock I am OK with owning for an extended period of time if necessary. If I don't roll now and then, my base port is going to evolve into a continuously traded basket. Now that could work of course, but I need 50 good ideas on hand per quarter, and if I am honest I usually don't have 20. That's too much research. So most of my rolling has the purpose of holding my best stocks, or entering 5% cheaper when I can . But you gotta let it go sometimes as Mike stated. Trying to "beat a stock" will get you hurt. Emotion is now in play.

You have a pretty good idea what I am up to overall so hoping that explanation made some sense.
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A very busy day. I have a lot of options that needed to be addressed. I rolled put and call positions forward for KO,BP,VTR,PFE so far. Mostly small moves with little consequence. All in the money options with expiration tomorrow. A few transactions cost me $10.
The net gain on all the moves was about $100 gain and moved a few strike prices in my favor a few % if I am exercised next month. Or maybe I need to do this again next month? Some near term dividends were saved so that factors in. It's all I could do to avoid transactions at less than optimal current prices.

I'll share details on UNH as I dance through the fire. This is pretty typical when I get on on the wrong side of a trade.

Sold a very short expiration option last month for $117 (commissions included) and it expired worthless. Sold a new put for $397 after that so I am now up $514. Then the free-fall started and i just bought back to close that option for $1998. Immediately pushed it out a month with an expiration in May at only $1822, but I dropped the strike from $235 to $230. Still have $348 cash profit in the account after all these trades but I am very upside down in the new put of course. $23,000 is tied up as option collateral, but it's earning nice interest. I may be doing this five more times. I a fine with going long with UNH, but I intend to keep selling tie until the entry price is closer to what I desire. Politics really complicate this but I knew that going in. I didn't expect the freefall of course or I would have waited a month to sell a put.
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