All things STOCKS

#11,279
#11,279
TQQQ is trying to get me to bite. Already traded 60 million shares this morning.

Down 20% this week. Yowzer.

But it’s also down 75% since late 2021. It can easily continue to crash.
 
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#11,283
#11,283
Velo Vol said:
For the last 15 years?
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The leftists have a hissy fit if the industry earns a profit so it is always an overhang. Also, they are big dividend payers so you really shouldn’t exclude those returns.

Energy equities don’t always mirror the broad index averages. Plus there are a couple of huge economic events in your time frame. A pandemic and the Great Recession.

The current administration is attacking a critical, fundamental industry. Most countries are supportive of their most important businesses. We have clowns in power and ignorant fools voting to keep them in office. Their uteruses aren’t going to fuel our economy.
 
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#11,286
#11,286
The particular chip stocks I have are down about 5-10% today. Seems widespread agreement they were too high. Looks like maybe MU set it off.
 
#11,287
#11,287
Who woke up this morning and decided oil is less valuable than yesterday?

FW6WNdUWAAM_diz
 
#11,288
#11,288
Velo Vol said:
Who woke up this morning and decided oil is less valuable than yesterday?

FW6WNdUWAAM_diz
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Speculators. And based on the 10-15 biggest percentage losers in my accounts, defense and heavy industrials/manufacturers are tanking - heavily fuel dependant. CAT. WM. GE. SAIC. CSX. LDOS. BKR. XOM. CLF. RTX. LMT. BP. AA. NBR. NUE. It kind of looks like a rotation from dirty industries to cleaner varieties. Maybe somebody declared peace.
 
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#11,290
#11,290
I just got an IRA approved for options. It might be a few years before equities push considerably higher and fixed income yields aren’t good enough yet. Bear funds don’t appeal to me right now after the extended spring pull back. So maybe I can make a little with derivatives if markets stay range bound.

I’m planning to sell puts and calls. I’ve never been well disciplined to cut losses, so shorting the options is what I’m thinking is the better approach. Plus most options expire worthless (and losses are worthless inside of an IRA). Perhaps there’s a good premium right now with all of the 2022 volatility. I’ve only been long calls in a taxable account a few times. Any suggestions and ideas from experienced options traders will be appreciated.

I’m planning to initially stick with high volume stocks and ETFs. Probably nothing right now as it feels to me like we’re in the middle of a trading range ATM. A bit higher and I’ll sell some covered calls. A bit lower and I’ll sell puts on positions that I don’t mind owning. Maybe TQQQ, AMZN, or NVDA. Possibly ADI or INTC. QQQ. SPDR. DIA. FAZ. FAS.
 
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#11,291
#11,291
Thunder Good-Oil said:
I just got an IRA approved for options. It might be a few years before equities push considerably higher and fixed income yields aren’t good enough yet. Bear funds don’t appeal to me right now after the extended spring pull back. So maybe I can make a little with derivatives if markets stay range bound.

I’m planning to sell puts and calls. I’ve never been well disciplined to cut losses, so shorting the options is what I’m thinking is the better approach. Plus most options expire worthless (and losses are worthless inside of an IRA). Perhaps there’s a good premium right now with all of the 2022 volatility. I’ve only been long calls in a taxable account a few times. Any suggestions and ideas from experienced options traders will be appreciated.

I’m planning to initially stick with high volume stocks and ETFs. Probably nothing right now as it feels to me like we’re in the middle of a trading range ATM. A bit higher and I’ll sell some covered calls. A bit lower and I’ll sell puts on positions that I don’t mind owning. Maybe TQQQ, AMZN, or NVDA. Possibly ADI or INTC. QQQ. SPDR. DIA. FAZ. FAS.
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I need to learn how to do that. I like the idea of buying puts on things I want to own anyway. Win-win.
 
#11,292
#11,292
Orange. said:
I need to learn how to do that. I like the idea of buying puts on things I want to own anyway. Win-win.
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Might as well write a put instead of setting a buy limit order. But maybe the put doesn’t automatically trigger a stock purchase if the share price falls to an in-the-money strike and then quickly shoots up right after the dip and before the expiration. You’d be in a better position to keep the entire premium as the option is more likely to expire worthless. But you might miss out on the share purchase if that was the intent. I don’t know if there’s a mechanism to trigger the share purchase while simultaneously meeting the contracted obligation. What I’m not clear on is the mechanics. Do the put option writers get to wait until the expiration date or can the option holders exercise the contract rights at any time? (And vice-versa when writing a covered call). Pretty basic stuff that isn’t explicitly outlined on the broker’s website (or I haven’t found it yet). Maybe it can be simulated on their practice platform - but is the simulation in real time or can the time frame be compressed and accelerated with historical data?

A put contract can always be written and the minute by minute share price can be followed (or alerts can be set). Closely watching a screen for hours at a time is exhausting.
 
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#11,293
#11,293
I spent about a year learning about options and then another year trading. I think they're fun. The "wheel" strategy is probably the easiest to appreciate, but when it comes to the option premium themselves, that is all gambling money between you and the other guy. I do like that you can create securities. You can create an option and sell it, no matter how ordinary you are. But I don't have, after a year, any brilliant insight.

P.S. In the USA, the option OWNER can excercise the option any time no matter the price. The OWNER (that is to say, not you in the wheel strategy. The other guy). To do that, I would have to call Fidelity. YMMV. At expiration, Fidelity will automatically exercise in-the-money option contracts unless the OWNER tells them not to.
 
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#11,294
#11,294
Firebirdparts said:
I spent about a year learning about options and then another year trading. I think they're fun. The "wheel" strategy is probably the easiest to appreciate, but when it comes to the option premium themselves, that is all gambling money between you and the other guy. I do like that you can create securities. You can create an option and sell it, no matter how ordinary you are. But I don't have, after a year, any brilliant insight.

P.S. In the USA, the option OWNER can excercise the option any time no matter the price. The OWNER (that is to say, not you in the wheel strategy. The other guy). To do that, I would have to call Fidelity. YMMV. At expiration, Fidelity will automatically exercise in-the-money option contracts unless the OWNER tells them not to.
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If you are short a put, can the stock share purchase (cash removed from your account) be executed at any time, or does the put seller get to wait until the expiration date? In such a scenario wouldn’t writing a put that’s already in-the-money be subject to be executed immediately as long as the option remains in-the-money?
 
#11,295
#11,295
The Spirit (SAVE) “bidding war” sure is odd. SAVE is stuck at $24/share. JetBlue is offering $33.5/share. Spirit shareholders vote tomorrow on Frontier’s bid which is worth $22/share.

Call me stupid, but I think that $33.5 is a bigger number than $22.
 
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#11,296
#11,296
Thunder Good-Oil said:
If you are short a put, can the stock share purchase (cash removed from your account) be executed at any time, or does the put seller get to wait until the expiration date? In such a scenario wouldn’t writing a put that’s already in-the-money be subject to be executed immediately as long as the option remains in-the-money?
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the seller gets no rights and no choice. That’s what they pay the money for.

ITM options are valuable to trade. Nobody smart executes in the money options immediately unless the option gets priced wrong. Part of the art of option pricing is you don’t get the time value negative. There evidently are a lot of market makers looking at that all the time.
so for instance let’s say an option is $10 in the money, it will cost more than $10.
 
#11,297
#11,297
Firebirdparts said:
the seller gets no rights and no choice. That’s what they pay the money for.

ITM options are valuable to trade. Nobody smart executes in the money options immediately unless the option gets priced wrong. Part of the art of option pricing is you don’t get the time value negative. There evidently are a lot of market makers looking at that all the time.
so for instance let’s say an option is $10 in the money, it will cost more than $10.
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And the exact option sold is in a specific buyer’s hands? It isn’t in a pool of similar options?
 
#11,298
#11,298
I don't know for sure, but I think they assign it only when they need to. In either case, it's totally random who gets called out. Either randomly assigned when you sold it or randomly assigned when it was executed.
 
#11,299
#11,299
Firebirdparts said:
I don't know for sure, but I think they assign it only when they need to. In either case, it's totally random who gets called out. Either randomly assigned when you sold it or randomly assigned when it was executed.
Click to expand...

I might write my first put well out of the money and with a very close expiration. Earn me some meal money for a week or so.
 
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