So I am looking to get short the QQQ over the next week or so and one of the ways I like to get short is selling Calls. Now a couple ground rules to go by.
1) Do not sell calls on individual stocks UNLESS you own the stock and it is a covered call. You can get destroyed quickly.
2) Do not sell puts UNLESS you are able to have the contract assigned to you. (this is not applicable to this trade, more if you want to go long a stock, but I am going over general rules overall)
3) Do not get TOOO BIG you can lose your ass quickly.
Selling options is the slow boat to China trade so don't get greedy. Small wins = Big gains.
In lieu of just shorting the market, or in conjunction, if you have that kind of account, selling Calls is a great way to get a little extra premium for shorting.
Now what is the risk here? Well it is a little more risky than shorting outright simply because there is no pre or post market. But overall selling one contract is equal risk to selling 100 shares, to provide some proportion.
What I am going to do on Monday is a mix, of shorting the stock and selling a couple calls. I want to be clear here, I give the market 30-45 min after the open to see if I want to sell a Call based on how the market reacts. Patience may provide a better entry price, also the spreads are a little wider at the open and I generally like to wait for the market to stabilize after the open.
So I am looking at selling 480 Calls in addition to shorting the stock per my previous trade post.
Be patient, and if you have never shorted or sold calls, nothing wrong with doing a paper trade to get the idea of what you are doing. Obviously I will not be sending out real time signals, but I will post Monday my entry and trades.
Have a blessed Weekend!!!!
1) Do not sell calls on individual stocks UNLESS you own the stock and it is a covered call. You can get destroyed quickly.
2) Do not sell puts UNLESS you are able to have the contract assigned to you. (this is not applicable to this trade, more if you want to go long a stock, but I am going over general rules overall)
3) Do not get TOOO BIG you can lose your ass quickly.
Selling options is the slow boat to China trade so don't get greedy. Small wins = Big gains.
In lieu of just shorting the market, or in conjunction, if you have that kind of account, selling Calls is a great way to get a little extra premium for shorting.
Now what is the risk here? Well it is a little more risky than shorting outright simply because there is no pre or post market. But overall selling one contract is equal risk to selling 100 shares, to provide some proportion.
What I am going to do on Monday is a mix, of shorting the stock and selling a couple calls. I want to be clear here, I give the market 30-45 min after the open to see if I want to sell a Call based on how the market reacts. Patience may provide a better entry price, also the spreads are a little wider at the open and I generally like to wait for the market to stabilize after the open.
So I am looking at selling 480 Calls in addition to shorting the stock per my previous trade post.
Be patient, and if you have never shorted or sold calls, nothing wrong with doing a paper trade to get the idea of what you are doing. Obviously I will not be sending out real time signals, but I will post Monday my entry and trades.
Have a blessed Weekend!!!!
Note
Trade Update for the record.Short 100 shares @ 476.84
Short Jun28 476C @ 4.26
Short Jun28 480C @ 2.29
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.