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Diagonalspread

AMD JAN 20 57/ JAN 27 62 DIAGONAL PUTLOW BASE SET-UP: AMD has been in a low base since about Dec 22nd and has been consolidating for more than 5 days with lower or equal volume. Overall market conditions are bearish, so downside is probable. I was planning on using the Dec 28th candle as my entry point back then, but at that moment in time, it did not meet the 5 day consolidation requirement. So I waited a bit more. Turned out to be a small bear rally back to the 20 day on Jan 3rd. I'll be using today as my entry point. No stops. I will be set up for max loss risking under 2% of my portfolio. DIAGONAL SPREAD STRATEGY: How strike prices and expiration dates are selected : 57 is my target point. From Oct 10th to about October 24th we traded in another low base set up (supply and demand zone) and my thesis is that we revisit that area within the next couple weeks or sooner. On the hour chart, I identified a tight downward channel which I used to determine my outlook. I originally was thinking we could visit 57 by Jan 13th, but Jan 20th is more than enough time. Position management strategies when the stock goes lower : If this falls lower than my 57 target and stays below 57 by the 20th, I'll close out the entire combo. The week of the 20th I'll watch this if this is below my 57 target to see if it'll run back up to hit the apex of the trade. Position management strategies when the stock goes sideways : If this goes sideways, I'll let my 57 strike expire and hold on to my 62 strike until the 27th. I'll be set up for max loss. Position management strategies when the stock goes higher : If this goes higher, I'll let it expire worthless and move on to the next trade Position management strategy at expiration : At expiration, if this is below my target or at my target I'll close out the entire combo. We we're still above my 57 target, I'll hold on to my 62 strike until the 27 and close it out.
NASDAQ:AMDShort
by MMOTA_
WYNN 6 JAN 23 85/ 20 JAN 23 80BULL PULLBACK SET UP: Since about the end of June this year, WYNN looks like its been gaining momentum towards the upside. At the beginning of November, the 20 day crossed over and upward movement continued bringing it back to the upward trend line from the June/July lows and is now high basing with a pull back to the 9 day and area of support at 75ish. The bull pull back brought this stock back to an area of support at 75ish and today it's trading above the previous days candle triggering an entry at 78ish. No stops will be applied as I will be positioned sized for max loss. DIAGONAL SPREAD STRATEGY: Even though the entire market is down today, This stock held up pretty well today which is part of the reason I got in. It likes this 78 area and looking like it wants to break out of here. Because it gapped higher from the previous days high and held up on a down day, it solidified my entry and timeframe. My target was determined by being aware of my higher upward trend line that was also recognized multiple days the back half of July. A couple outcomes I had in mind. My first, is that we break out of this resistance area of 78 within 2-3 weeks. We could possibly base between 75 and 78 this week and then breakout. Second outcome could be that we pull back more to the 20 day or 50 day and test the lower upward trend I drew by.... lets say..... by December 9th or 19th, that would be around the 71 or 72 area and then continue higher between this channel to get to 85 six weeks from today. So if this decides to go against me and fall apart, I'll be set up for max loss and I'll move on to the next trade. If this trades sideways for the next few weeks I'll still have enough time for this to break out. If not, I'm set up for max loss. If this goes higher than my 85 target, I'll close out the entire combo before the 6th. I'll also watch this if this decides to fall back down into the apex of the trade.
NASDAQ:WYNNLong
by MMOTA_
DIS 9 DEC 22 91/ 16 DEC 22 96 Diagonal BEAR RALLY SET UP: DIS made a new swing low 11/09 and since then it has made its way back to the 50day with lower or equal volume making this a potential bear rally. The entire market has been in a bear rally, so based on the patterns forming, this should make it's way lower to fill the gaps below. I used the doji candle on the 28th as my reversal candle at the 50day. And today it trigger because it traded below the previous days candle. Momentum indicators suggests more downside. I'm set up for max loss on this trade so if this decides to head higher, I'll be ok and move on to the next trade. I determined 91 would be a safe middle zone target based on the downward channel I drew. And if the market decides to bring this lower....to lets say 84 or 83, that would touch the lower trend line and could bounce back up to 91 to hit the apex of the trade on the 9th. DIAGONAL SPREAD STRATEGY: If this falls below my 91 target before Dec 9th, I'll wanna see if this goes down and touches 83 or 84. Lets say it gets there by Monday the 5th. It may want to rebound back to 91. If it does that and gets to 91 by lets say the 8th, I'll close out the entire combo. If this just stays below 91 by the 9th, I'll close out the entire combo as well. If this goes sideways until about the 8th or the 9th (that would be around the upper trend line which could happen) I'll still have the Dec 16 96 strike. I'll have to watch it the week of expiration to see if I'll wanna close this out a couple days before the 16th. If this goes higher I'm set up for max loss, so I'll just move on to another trade. Ideally I wanna see this at 91 or lower by the 8th because I prefer to close the entire combo and move on to another trade.
NYSE:DISShort
by MMOTA_
$STZ — Diagonal Calendar Put Spread?This price forecast is purely based on technical analysis of the current setup. I guess people are drinking a lot? We've had an extremely long stretch of green - which is a stale green light - 11 days in a row of green & 6 weeks straight of green - that hasn't happened since 2017 - it looks like the stock is trying to breakout on the weekly chart, but it looks so overbought technically speaking - very wide divergence from the all of the moving averages. This is a great candidate for a diagonal calendar put spread , or just naked put buys. I'm considering buying a very far out put - possibly January 2023 - and selling near-month puts against it with the goal of both having my bought put appreciate in value and have the sold near-month puts degrade in value so I can either buy them back for cheap or let them expire worthless. If I am able to successfully roll in near-month credits against my bought strike then I can slowly pay off the position's debit & eventually have a risk-free position. In other words, if I make enough money from selling puts - against the bought out of the money & far dated puts - then I can completely pay off the cost of the puts I bought while still owning them - creates a risk free position. Let me know if this is a confusing strategy for any of you, or if you disagree with my analysis.
NYSE:STZShort
by OptionsAddicts
THE BITCOIN ZEBRA BULL IS BACK! Bulls unite, for he has come.Right now the Zebra Bull is back in full play. After the last time the zebra bull appeared He smashed his entry, then smashed his way up to his third given target. Good job Zebra Bull, good job. He is back, and there is something brewing. I have linked to the prior idea dated July 4th so you can see how well the levels in bright green from last year were respected- more than most other levels - weird ; ) Now this future Bull Scenario that the Zebra Bull speaks of is displayed in the following. There is a conservative entry, as well as a bullish entry. The targets will be hit, all within the next day, or the next few weeks. We have seen the power of the Zebra Bull before, lets see if he can really help rev up the liquidation engines on shorts. For he is in favour of the longs. Goodluck, Namnaste
BITMEX:BTCUSD.PLong
by SKYLOBSTER
XLELong via Jun15/Mar16 diagonal for $4.37 POP: 50% Max Loss: $4.37 Stop Loss: Price at $64.40 Max win: As of right now, $263 Target: Price at $75 Long Jun15 $66 call: 61 delta Short Mar16 $73 call: 14 delta. I structured this trade to give me the most profit as close to my target as possible (in the case it shoots straight up), while still having a positive theta trade. For reference try to match the thetas of both options up for choosing a strike for your short. I will continue to roll the short call each cycle to continue to eliminate basis as well.
AMEX:XLELong
by Benji
2
OPTIONS TIP: THE NET CREDIT DIAGONALIf you're going to do diagonals without potentially taking it up the glory hole if price rips away from the setup, well, this is the way to do that. Unlike naked shorts or short verticals, diagonals benefit from volatility expansion, which makes them one of the go-to strategies in this low vol environment we're experiencing. To get into this setup, you sell the front month short at the 20 or 30 delta (depending on your risk appetite; closer to current price means lower POP% for the short option, but higher credit brought in at the door for that option). You simultaneously buy the back month long for a debit slightly less than what you were paid for the short option, receiving a small net credit for the whole setup. If price rips away from the diagonal (in which case both the long and short go to worthless), you haven't earned much, but you're also not losing what you would pay in debit for a tighter diagonal where the debit you paid for the back month exceeds what you received for the front. I like to use an expiry that is at least two months out from my front month option so that I have an opportunity to roll my front month short at least twice (in the example, from April to May and then May to June), but you can certainly set these up for shorter duration and then, for example, roll from a weekly to a weekly instead. This particular setup, however, doesn't come cheap; the spread is 24 wide and comes with a $2400 BPE price tag. Of course, you can piddle with the back month long option; bringing it in closer in time will allow you to narrow the spread while still being paid a net credit for the setup.* Similarly, bringing in the short option closer to current price (e.g., the 30 delta; I wouldn't go in closer than that) will allow you to bring in more credit for the short option and bring in the long option closer to current price.** Alternatively, you can use a smaller, broad market instrument like IWM ... . Notes: Because this setup has downside risk, it may be advisable to also get into a call side diagonal using the same back and front months. * -- The April 21st 230 short put/May 19th 220 long put diagonal (a 10-wide). (.04 net credit/contract). The downside to this is that you only get one opportunity to roll -- from April to May. ** -- The April 21st 233 short put/June 16th 217 long put diagonal (a 16-wide), where the April 21st 233 is at the 30 delta. (.04 net credit/contract).
AMEX:SPY
by NaughtyPines
1
BOUGHT VXX SEPT 16TH 13/MAY 13TH 18 SHORT CALL DIAGONALLayering on another long volatility setup here on this dip below 17.50 in VXX. (See Post below as to how to work this "poor man's covered call"). Unfortunately, there are virtually no metrics to provide with a diagonal, such as probability of profit, since it will vary depending on how much credit you collect during the life of the setup, when and how much VXX pops during its "lifetime", and when you chose to take your money and run ... . The one metric that can be provided is the fact that this setup cost $413/contract to put on, which is the extent of your loss if you allow your long call to expire worthless in September (in which case VXX would have to be below 13 at expiration). Naturally, I intend to bail long before that ... .
AMEX:VXXLong
by NaughtyPines