12-03-2020, 07:02 PM
(12-03-2020, 05:26 PM)NilesMike Wrote: The only trade that looks appealing in the selection above. For me, it would CCL due to earnings coming. You can collect 1/3 the width of the strikes, short time frame (12/18 EXP).Mike and I have chatted this up plenty. It's a sound strategy and will only seem complicated until you plug in some "what if" numbers for 10 minutes. With a spread you keep the duration short. Time decay is your friend. You can be a little wrong and still walk away with a small profit or tiny loss if you change your mind. On a straight put the decay will kill you even when you get the direction approximately correct, or the profit is so small it didn't match the risk.
Much wider sweet spot than buying a put, IOW a far greater chance of making $$.
Apologies if you know all this. I really didn't until I went for about ten rides. Divemnow, Guru and I all did put buys about two weeks ago. Every one of those trades is going down in flames. Fighting the tape is always riskier than it appears. I have five weeks for SIX to pull back to 25 just to be about even. If it pulls back sub 23 and I make decent money, it was still an impulsive trade with bad risk/reward.