Everything Options

ShakyJake said:

So just fucking around in paper-trading, earlier this morning I bought a TSLA 900 strike price call option and turned around and sold it a few hours later for $135 profit. Just do that over and over???

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Call options move fast and big relative to actual share price, especially if you pick a short expiry. But they go down just as fast as they go up.

Sanrith Descartes said:

This is where Delta comes into play ShakyJake . You use Delta to tell you how much the option price will move in relation to a $1 move in the underlying share price.

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Yeah, I understand Delta and Theta decay. Well, "understand" at a basic level.

So I'm left wondering what are the odds of success just going with the 'hot' stock for the day and just trade the call options.

Sanrith Descartes said:

I dont take the buy side of options trading so you are better off asking one of the others. I am a sell side type of guy.

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Well, you can't take on the sell side unless you have the collateral to buy the underlying security, right? Unless you're doing those fancy spreads?

ShakyJake said:

Yeah, I understand Delta and Theta decay. Well, "understand" at a basic level.

So I'm left wondering what are the odds of success just going with the 'hot' stock for the day and just trade the call options.

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Just pick a stop loss % and stick with it, its not hard for a call option to go from -10% to -40% real quick.

Bought DIS calls Nov 05 175 strike

This is why DIS was hit today.

Nice bounce off of 169.90. Lets hope it can carry the momentum into tomorrow

Sanrith Descartes said:

I really wish I wasnt weight capped on my DIS. I really want to buy more down here.

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I'm just swinging it. Look at the chart, way too many times it's bounced from 170 to 175 within days

Sanrith Descartes said:

For calls you own the underlying stock and for puts you put up cash collateral.

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edit: nevermind misread.

Wingz said:

How is Southwest (LUV) green and not red right now? With all of their issues and rising fuel costs I'm completely shocked.

They got earnings next week and I can't imagine it doesn't drop especially with guidance, gonna get some $51 puts for 10/29 and see if that works out.

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Sold my puts for $107 gain per. Not bad.

Any experience with bull put spreads? They seem to be pretty newbie friendly with controllable risk.

ShakyJake said:

Any experience with bull put spreads? They seem to be pretty newbie friendly with controllable risk.

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If I'm bullish I just pick an aggressive strike when selling puts. For example I sell 15$ strikes on BCRX when it drops below 15$. It usually bounces back over 15 and I keep the premium, or I just get a stock I like at a much cheaper price.

Well, I'm playing (paper) with vertical spreads for now. And I'm trying to understand the margin required for real trading.

Screenshots from ThinkOrSwim:





Here I'm ordering a vertical spread on Amazon. As the Order Confirmation dialog shows, I could have a max loss of $345. Let's assume for the moment that I have margin enabled -- does that mean my account needs at least that amount available? Also I'm not clear on what "buying power" means.