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Conservative option strategies, what did you buy or sell today?
That's a pretty good graphical representation.  ATM premiums drop like a rock when you get close to expiration, and the whole premise of selling puts to enter virtually all my long stock entries.  If it takes two attempts to enter you have often collected more than a full year of dividend income.  Pick the DTE carefully and you might also collect your first dividend within a month of going long.

The chart might not be flat enough from 90 days and further out.  If the market gets a little choppy premiums just sit there.  I sold a handful of calls as much as 6 months out this year to get some decent premiums.  My real life experience says don't do that anymore.  There are greener pastures elsewhere.   You can circle back and grab it later.  Remember back in FEB when I said I was going to sell some long dated puts in NWL?  I sold a SEP strike 17 put when the stock was 19+.  $2.10 premium.  Looked good on paper and I was counting on the high dividend to save it until the company turned it around.  The stock went sub $14 and the put was way upside down for almost the entire time I held it.  A good earning report saved me with under 30 days left.  I did hold until it expired worthless.  The stock was so volatile and the premium decay was stubborn.  The return was fine in the end but it was not a good way to play it.  Way too much can happen in 6+ months.  I'll leave that for the long part of my port.  I'm hesitant to even go 60 days now.  I see few examples where it makes any sense for an individual stock.
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Sold a HON and a MDT put on the dip this morning. Rolled my ill timed MMM put forward with a lower strike for more premium. Still don't own a share long but MMM has a sufficient fan base to keep a floor under it. It's been one of my easiest stocks to manage puts for a profit. Thought I wanted to be long MMM 20+ points ago but patience is going to pay off.
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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. Smile OK maybe not, but my downside max risk is $500 if DE goes parabolic. DE is running up on trade war soybean prayers.
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(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. Smile OK maybe not, but my downside max risk is $500 if DE goes parabolic. DE is running up on trade war soybean prayers.

Risk is 330 since you collected 170
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(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.  Smile  OK maybe not, but my downside max risk is $500 if DE goes parabolic.  DE is running up on trade war soybean prayers.

Risk is 330 since you collected 170

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.  Smile  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.
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I don't like the DE chart right now for that trade but it may pull back enough to expire OTM
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(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.
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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
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(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.

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

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.  Smile 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.
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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.
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