This thread and investment concept is the single most amazing thing I’ve read on this forum.
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> but FWIW at that point I'd prefer to just close out [at least some of] the positionAs described in the quote it sounded like you basically 'froze' the September long P/L with a very tight vertical spread. That's definitely the most conservative way to protect profit without STC'ing the contracts, but FWIW at that point I'd prefer to just close out [at least some of] the position.
Keeping the +C's open, yea something like a 1-3week -C will pay off quite a bit more than the vertical. You can also keep its strike close to the money to maximize Vega and better adjust relative to underlying movement. If you want slightly less management 4-6 weeks out will work too. I don't like selling any farther than that because it really locks you into the position, reduces your maintenance flexibility, and reduces your return on capital.
I just re-sold my 40 x $805 -Cs at $1.24, as there was a nice pop at the open. If you can't beat the MMs, might as well join them (albeit still conservatively).Same. I’ve been watching it all day and once it looked like stock price was going to start moving and not retrace, I closed my 40 x $805 calls (STO at $1.95 and BTC at $.39) and may look to resell assuming we get a sustained pop. I’ve been expecting one all week.
The 800 call wall seems safe enough. The 750 call wall: no idea.I just re-sold my 40 x $805 -Cs at $1.24, as there was a nice pop at the open. If you can't beat the MMs, might as well join them (albeit still conservatively).
I just re-sold my 40 x $805 -Cs at $1.24, as there was a nice pop at the open. If you can't beat the MMs, might as well join them (albeit still conservatively).
I think it definitely varies week by week - how many puts have been sold and where are they as opposed to the calls. Last week, there were an inordinate number of calls sold at $800, so it was clear those weren't going to be breached. This week there is less of a giant wall, but Max Pain appears to be $720 and you can see there are walls of calls at $750 and $800. I think @Lycanthrope and @bkp_duke are likely safe at $750 but I'm working with a taxable account and am more cautious (I don't want to get called). I'm more comfortable selling puts, as I don't mind the "penalty" of adding more shares, but I'll opportunistically sell calls when I have a decent comfort level that the shares are safe.How many contracts are consider a call wall?
Don't mention it on the main thread, or you'll be chased out of town by the Hodlers...This thread and investment concept is the single most amazing thing I’ve read on this forum.
Don't mention it on the main thread, or you'll be chased out of town by the Hodlers...
My theory, which may or not be correct, is that the MMs are going to protect those call walls by driving down the price each time the stock price (short-selling, actually selling, placing big sell orders and then pulling them, etc.) gets close to the call wall. Their main goal is to get the calls to expire worthless. This week we have walls at $750 and $800. I'm too chicken to play the $750, but there is still money to be made at higher strikes. Personally, I like to take a position behind the second call wall and let the MMs defend the position for me. I'll roll out if necessary, but my bets have been pretty safe to date. I'll also close them early and look to re-sell or roll down, when appropriate. You can be pretty risk-averse and still skim some premiums.What's the theory on the "call walls"? MM's are hedging and would liquidate their positions at that number to stay delta neutral?
What main thread?Don't mention it on the main thread, or you'll be chased out of town by the Hodlers...
I did the same thing. Not only that, I copy/paste/print the gems into a nice binder of handy tips/tricks/wisdom/not-advice.I read the first 15 pages of this thread for the last hour. Very interesting read.
It's basically @adiggs and @Lycanthrope sharing strategies whilst others try and dip their toes in the same pool. Thanks for your contributions, everyone. This thread is hugely educational.
So Max Pain theory. Anyone run the numbers on this to see if it holds up?My theory, which may or not be correct, is that the MMs are going to protect those call walls by driving down the price each time the stock price (short-selling, actually selling, placing big sell orders and then pulling them, etc.) gets close to the call wall. Their main goal is to get the calls to expire worthless. This week we have walls at $750 and $800. I'm too chicken to play the $750, but there is still money to be made at higher strikes. Personally, I like to take a position behind the second call wall and let the MMs defend the position for me. I'll roll out if necessary, but my bets have been pretty safe to date. I'll also close them early and look to re-sell or roll down, when appropriate. You can be pretty risk-averse and still skim some premiums.
Do you mind elaborating why closing (STC) at least some?
Are you saying, for the covered calls (-C) sold against these long calls, keeping the strike At The Money or close to ATM helps maximize Vega?
In fairness the contributors evolve over the pages. I for instance haven't been contributing much the last month or two (since roughly when I retired .. hmmm...).I read the first 15 pages of this thread for the last hour. Very interesting read.
It's basically @adiggs and @Lycanthrope sharing strategies whilst others try and dip their toes in the same pool. Thanks for your contributions, everyone. This thread is hugely educational.
Still a newbie!
This thread and investment concept is the single most amazing thing I’ve read on this forum.
In theory Max Pain comes into play for me because I'm studying the open interest chart, but I'm really looking to see where call walls exist to then set up shop right next to them. For example, Max Pain is supposedly $720 this week. I'm not looking anywhere near there and do not expect we'll finish there. I think it's much more likely we'll finish right below $750. However, there's no guarantee that $750 won't be breached if volume were to really pick up, so I've parked myself behind the $800 call wall for added comfort (albeit with less premium). For me, it's a balance of limiting risk (but recognizing that nothing is risk-free) and being happy with decent, but not huge, premiums.So Max Pain theory. Anyone run the numbers on this to see if it holds up?
Your post is well timed.... right as Biden dropped his cap gains comments. This is my first week on the wheel, some safe covered calls at 810 for about 1000 bucks profit, and yesterday, placed DITM put (4x750cp placed when stock was at 730 SP). I'm fine buying at whatever, but was going to be super stoked if my first week on the wheel started off with $11,000 gain. Will see how much this puppy bottoms out.Bit pedantic, and probably bit eye roll inducing from the regulars here, selling options as described in this thread and in general (via The Wheel and other strategies):
--Is trading, not investing. Short term, not long term. It may sound like semantics but it is (at least IMHO) really important to mentally separate the two.
--Is far from pinned to the right side of the shitty<-->amazing spectrum. It is generally an approach that has modest returns (that are capped) for high risk (theoretically huge/unlimited risk, but practically closer to just "high") and pretty heavy trader involvement (lots of rolling, lots of fingernail biting, etc.).