Calls trade, extremely riskyI just bought some calls exp. tomorrow, strike 190. I hope it breaks out tomorrow. Other big caps already broke out. Let's see how it goes.
Optionstrading
NVDA - MyMI Option Plays - CallsNVDA has outperformed outperformance in it's definition. This Titan has broken into a higher price range channel (top level of the orange channels) and is showing the potential to be headed back to $500. The most recent breakout in this week's trading sessions shows that there is still money on the sideline waiting to be injected in the markets and that we have much higher to go.
This has taken us bullish in all of our current open trades. We are not currently in NVDA but we are patiently awaiting a re-entry that's a little more favorable for a longer-term call option and share hold.
KO - a Warren Buffet Fav setup long from bottom of cycleKO as a long standing Buffet holding- is a slow mover with a decent dividend. For stock and
options traders like myself, it is now well positioned for a long trade. KO's recent pivot
highs were early to mid May with the highest trading volume at $64 according to the interval
volume profile. KO descended mid-May into June 1st and then had a Fib. retracement and
reversal. On the 4H chart, KO price is now at the bottom of the high volume area of the overall
while the RSI / MTF ( Chris Moody) shows relative strengths in the range of 25.
I see this as a classical opportunity to buy low and sell high. Trade specifics are a stop loss
of 59.30 and targets based on anchored VWAP lines of 61 (25% off) 62.5 (50%) and
63.75 (25%). As a low-risk trade for the stop loss compared with the potential profit, I will
devote 5 % of the account to this trade. Once price hits $60.25, I will raise the stop loss to
the break-even price of the entry and the trade will become stress and risk free. I will
select an entry buy focusing down onto the 5-15 minute time frame. Profits from a low
risk trade like this will be re-deployed into others a bit riskier as a means of stratifying
risk and its managment.
FrogAlgo: What is 0DTE Option?🔔 Trading zero-day-to-expiration (0DTE) options on AMEX:SPY has both positive and negative aspects. Let's explore them 🧵:
Positive:
♻️ High Potential for Quick Profits: 0DTE options offer the opportunity for rapid gains if the underlying stock, in this case, AMEX:SPY , experiences a significant price move within a single trading session.
♻️ Reduced Time Decay: As the options approach expiration, their time value diminishes rapidly. This can work in favor of traders, as time decay accelerates, potentially increasing the profitability of the trade.
♻️ Flexibility: 0DTE options allow traders to capitalize on short-term price fluctuations in AMEX:SPY without committing to longer-term positions. This flexibility can be advantageous for those seeking quick, opportunistic trades.
Negative:
♻️ High Risk: 0DTE options carry substantial risk due to their short expiration timeframe. The price of AMEX:SPY must move significantly and in the desired direction within the trading session for the trade to be profitable. Otherwise, the options could expire worthless, resulting in a complete loss of the investment.
♻️ Increased Sensitivity to Market Volatility: 0DTE options are highly sensitive to changes in market volatility. Rapid shifts in AMEX:SPY 's price can cause dramatic swings in the option's value, amplifying both gains and losses.
♻️ Limited Time for Adjustments: With 0DTE options, there is minimal time available to react and make adjustments if the trade goes against expectations. Traders must be prepared to act quickly and decisively.
🔔 It's crucial for traders to thoroughly understand these factors and assess their risk tolerance before engaging in 0DTE option trading on AMEX:SPY or any other underlying asset.
TSLA - MyMI Option Plays - PUTsI purchased some PUTs this morning as I expect TSLA to rebound back to at least the $268s or $264s for an excellent $12-$16 Puts Catch on the Drop.
I am sharing this to track the trade!
Stay tuned for updates and for more trades, be sure to follow!
Thank you all for the support, our numbers have been pretty phenomenal and we want to show our appreciation by continuing to share our ideas with you all!
Check your bio for links to get even more connected! Use our Financial Budgeting and Investment Manager to improve your trades and follow ours even closer!
Thank you guys/gals!
LI , a Chinese EV manufacturer LONGLI has seen a 60% price rise since significantly beating the earnings estimates of the analysts.
LI competes with TSLA and NIO primarily in Chinese and perhaps a little in Scandinavia. It
does not import to North America. The 2H chart shows price rising consistently in a channel
between the first and second standard deviation lines above the mean anchored VWAP
demonstrating trend persistence and momentum. The zero-lag MACD shows a line cross
at the zero horizontal line and rising as confirmation of bullish momentum. I see $40
as a reasonable target at the level of the 3rd upper standard deviation lines. With the
next earnings report due August 21st, I will take a long trade of ten call options striking
$38.00 expiring 8/18/23. On the last trading day, this option had a low of $1.75 and
a high of $1.90 for an intraday rise of about 8%. The contracts will cost about $1900.
I am expecting about a 3% average rise compounded over 30 trading days or 250%
return on the trade.
No more coffeePrice is sitting on a strong support but also was rejected from the broken uptrend. We may say another bounce but on the other hand is very probable that price opens with a gap down soon. I just bought some puts (are very cheap now) strike $97 expire 07/14.
SPX Outlook: Week Ending Jul 14th4400 remains to be the line in the sand. With CPI on Wed, the targets below are 4375-4350. Above we can test 4440 and over that 4450-4465.
TSLA Weekly Longterm LONGTSLA is here on the weekly chart. I have added a couple of anchored VWAPs and their
standard deviations to the chart itself. The two indicators are the zerio-lag MACD which
shows upgoing lines crossing the zero horizontal line and a positive histogram. The Price Volume
Trend indicator shows a cross and consistent upgoing action since February 1, 2023. The chart
itself shows price to have crossed over the two mean VWAPs 4 weeks ago which is confirm-
atory for bullish momentum. TSLA pivoted up from the second deviation below the mean
VWAPs about February 1st. My target is $360 the present level of the second deviation lines
(red) above the mean VWAP confluent with the horizontal resistance zone of the highs
from November 2022 January 2023 and April 2023 all a triple top of sorts. I am highly
bullish on TSLA overall given its progress in autonomous driving, charging station
station infrastructure, deal making with F GM and RIVN insofar as charging standards
and cooperative ventures as well as obvious signs of growth with Cybertruck production,
and new plants in Mexico and potentially Spain and India. I have purchased ten options
striking $350 with a December 2023 expiration. I have call options expiring in August
and September. I expect to roll them out for more than a year to minimize the tax treatment
of expected significant profits.
NVDA - MyMI Option Plays - PUTsJust purchased some NVDA PUTs after it lose movement from this mornings push upward. I was seeing if it would cross that $430 Fib Retracement Level but it didn't even make it that far before showing signs of moment loss (for the moment).
So in that moment, I will be looking to snatch some profits going backward for a bit, potentially back to the $400s.
50% Retracement would show $390 but I'm being gracious with the $400 target for now.
SPX Outlook: Week ending Jul 7thOptions premium is indicating 4450-4435 is key flip point. If 4435 gives out, we could drop to 4400 and 4375 below that. Hold the 4435-4450 area and we could ramp 4500-4525 by end of the week.
NVDA Calls - MyMI Option PlayzAfter making some decent profits from the NVDA PUTs we purchased last week, we have since purchased CALLs on NVDA to retest those $426 & $439.89 ATHs before finally losing steam unless it pushes beyond that ATH due to everyone fleeing to Tech Stocks, AI Stocks to be more specific. Will be traveling for the next few days so will keep up with this as much as I can over the next few days.
Puts tradeJust bought some puts (very cheap at this moment):
Exp. 07/07
Strike: $65
Price was rejected from the resistance and is forming a bearish flag. Is not confirmed yet but I think is going to break down soon, maybe opens with a gap down on Monday.
Unlocking the Potential of Option Trading: A Comprehensive GuideIntroduction:
💥 In the world of finance, option trading has gained significant popularity among investors and traders alike. It offers a unique and versatile set of investment strategies that can be employed to capitalize on market movements, hedge against risks, and enhance overall portfolio performance. Whether you are a seasoned investor or just starting, understanding the fundamentals of option trading can provide you with valuable tools to navigate the financial markets effectively. In this article, we will delve into the basics of option trading, explore its benefits and risks, and provide insights into some popular option strategies.
👀 What are Options?
💥 Options are derivative financial instruments that grant the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time period. The underlying asset can be stocks, commodities, indices, or even currencies. The predetermined price is known as the strike price, and the specified time period is the expiration date of the option.
👀 Call Options vs. Put Options
💥 There are two types of options: call options and put options. A call option gives the holder the right to buy the underlying asset at the strike price before the expiration date. On the other hand, a put option provides the holder with the right to sell the underlying asset at the strike price before expiration.
👀 Benefits of Option Trading
💥 Flexibility: Options provide investors with a flexible range of strategies to suit their investment goals and risk appetite. They can be used to generate income, hedge against potential losses, or speculate on market movements.
💥 Leverage: Option trading allows investors to control a larger position of an underlying asset with a smaller upfront investment, known as the premium. This potential leverage can amplify returns if the market moves in the anticipated direction.
💥 Risk Management: By using options, investors can manage and limit their risk exposure. Protective put options, for example, can act as insurance against potential price declines in a stock, while covered call options can generate income and provide a cushion against potential losses.
💥 Diversification: Options can be used as part of a diversified investment strategy to mitigate risk and enhance portfolio performance. By incorporating options with different underlying assets and expiration dates, investors can reduce reliance on a single investment and spread their risk across multiple positions.
👀 Risks of Option Trading
💥 Limited Time Horizon: Options have expiration dates, and if the underlying asset doesn't move in the anticipated direction within the given time frame, the option may expire worthless, resulting in a loss of the premium paid.
💥 Complexities: Option trading involves various strategies and concepts that may seem complex to beginners. It is essential to thoroughly understand the mechanics and risks associated with each strategy before implementation.
💥 Volatility and Market Uncertainty: Options are sensitive to changes in market volatility. Increased volatility can lead to higher option premiums, but it can also increase the risk of unexpected price movements, potentially resulting in losses.
👀 Popular Option Trading Strategies
💥 Covered Call: This strategy involves selling call options on an underlying asset that the investor already owns. It generates income (the premium received) while limiting the potential upside if the asset's price rises above the strike price.
💥 Protective Put: This strategy involves buying put options on an underlying asset to protect against potential downside risk. If the asset's price declines, the put option will offset some or all of the losses.
💥 Long Straddle: This strategy involves buying both a call option and a put option with the same strike price and expiration date. It profits from significant price movements in either direction, regardless of the underlying asset's actual price movement.
💥 Iron Condor: This strategy combines a bear call spread and a bull put spread. It aims to benefit from a range-bound market, where the underlying asset's price remains relatively stable
The Greeks in Option Trading!The Greeks are mathematical measures used in options trading to assess and quantify different factors that impact the price and behavior of options.
📌 VEGA:
Vega measures how much an option's price will change in response to a 1% change in implied volatility. Implied volatility reflects the market's expectation of the future movement of the underlying security. When implied volatility is high, options tend to be more expensive, while low implied volatility makes options cheaper. Vega has a greater impact on options with longer expiration dates. As an option approaches expiration, Vega decreases, while it increases as the underlying security moves closer to the strike price. Vega is highest when the option is at-the-money and decreases as it goes out-of-the-money or in-the-money.
📌 GAMMA:
Gamma represents the rate of change between an option's Delta and the price of the underlying asset. Higher Gamma values indicate that even small price changes in the underlying stock or fund can cause significant changes in the option's Delta. At-the-money options have the highest Gamma because their Deltas are most sensitive to underlying price movements. For example, if XYZ is priced at $100.00 and a XYZ $100.00 call option is considered at-the-money, any price movement in either direction will push the option into either in-the-money or out-of-the-money territory. This high sensitivity to stock movement is reflected in the option's Gamma, making Gamma higher for at-the-money options.
📌 THETA:
Theta represents the theoretical daily decay of an option's price, assuming all other factors remain constant. Options gradually lose value over time due to time value decay. The decay is more significant as the expiration date approaches, particularly for near-the-money options. Theta does not behave linearly; instead, it accelerates as expiration nears. A higher Theta indicates that the option's value will decay more rapidly over time. Short-dated options, especially near-the-money ones, tend to have higher Theta because there is greater urgency for the underlying asset to move favorably before expiration. Theta is negative for long positions (options purchased) and positive for short positions (options sold), regardless of whether it's a call or a put.
📌 RHO:
Rho measures an option's sensitivity to changes in the risk-free interest rate. It represents the amount of money the option will gain or lose with a 1% change in interest rates. Changes in interest rates can affect an option's value because they impact the cost of carrying the position over time. This effect is more significant for longer-term options compared to near-term options. Higher stock prices and longer time until expiration generally lead to greater sensitivity to interest rate changes, resulting in higher absolute Rho values. Rho is positive for long calls (the right to buy) and increases with the stock price. It is negative for long puts (the right to sell) and approaches zero as the stock price increases. Rho is positive for short puts (the obligation to buy) and negative for short calls (the obligation to sell).
📌 DELTA:
Delta is a measure that estimates how much an option's value may change with a $1 increase or decrease in the price of the underlying security. Delta values range from -1 to +1, with 0 indicating minimal movement of the option premium relative to changes in the underlying stock price. Delta is positive for long stocks, long calls, and short puts, which are considered bullish strategies. Conversely, Delta is negative for short stocks, short calls, and long puts, which are bearish strategies. A Delta of +1 is assigned to long stock shares, while a Delta of -1 is assigned to short stock shares. An option's Delta can range from -1 to +1, and the closer it is to +1 or -1, the more sensitive the option premium is to changes in the underlying security.
Mersana Therapeutics: Enjoy!If it holds support, it'll take off and head towards the top end of the range. Check out the crazy Call Options volume for the 8/18 $7.5 Strike Price... over 23,000 for this little unknown Pharma company. Somebody knows something... don't you think?
Mersana Therapeutics, Inc. is a clinical-stage biopharmaceutical company, which engages in the development of antibody-drug conjugates that offer clinical benefit for cancer patients. Its product candidates are Upifitamab Rilsodotin (UpRi), XMT-1536, and XMT-1592. The company was founded by Mikhail Papisov in 2001 and is headquartered in Cambridge, MA. The listed name for MRSN is Mersana Therapeutics, Inc. Common Stock.
Using Heikin Ashi Candles to Exploit the BIG REVERSAL on $FAs you can see, on NYSE:F there is a large area of supply on the daily timeframe from 14.72-15.00. The blue dotted line at 14.55 is a point of control. I have started a small position short on NYSE:F 1-2 months out. Notice the 1 and 4 hour Heikin Ashi candles already showing the start of a bearish trend. I'd like for the daily candles to confirm the bearish trend before adding to this position. Let it dump, I never liked Ford vehicles anyway!
KMX CarMax Options Ahead of EarningsAnalyzing the options chain of KMX CarMax prior to the earnings report this week,
I would consider purchasing the 78usd strike price in the Puts with
an expiration date of 2023-6-30,
for a premium of approximately $3.30.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
the Bull Put SpreadIn the world of options trading, there are numerous strategies available to help investors mitigate risk and maximize profit potential. One of my favorite strategies is the bull put spread which I use when I have a bullish outlook on a particular stock or market.
What is a Bull Put Spread?
A bull put spread is a defined-risk, vertical options spread strategy that involves the simultaneous purchase and sale of put options on the same underlying asset with different strike prices. It is typically employed when an investor anticipates a moderate upward movement in the price of the underlying security.
How Does It Work?
To initiate a bull put spread, an investor sells a put option with a higher strike price and simultaneously purchases a put option with a lower strike price. Both options have the same expiration date. The premium received from selling the higher strike put option helps offset the premium paid for buying the lower strike put option. As a result, the strategy is implemented at a net credit, reducing the upfront cost and risk.
Profit Potential:
The bull put spread strategy profits from two scenarios. First, if the price of the underlying security remains above the higher strike price until expiration, both options expire worthless, and you keep the initial net credit received. Second, if the price of the underlying security experiences a moderate increase, the spread narrows in value, allowing you to buy back the short put option at a lower price, realizing a profit.
Risk and Loss Potential:
While the bull put spread strategy offers limited risk compared to naked put selling, it is not without its downsides. If the price of the underlying security falls below the lower strike price, both options may end up in-the-money at expiration. In such a case, the investor incurs a maximum loss equal to the difference between the strike prices minus the net credit received. It is crucial to assess the risk-reward ratio and have a clear exit plan in place to manage potential losses.
Picking your Spot
When you decide you want to try this strategy, the question becomes what stock should I choose? Choose an asset that has sufficient liquidity and options volume. Stocks or ETFs that are actively traded and have a large market capitalization tend to meet these criteria. I have done well with several tech stocks in the past.
Strike Prices: For a bull put spread, you will sell a put option with a higher strike price and buy a put option with a lower strike price. The difference between the two strike prices (less the credit received) will define the spread's width (and the $$ you are risking). Consider strike prices that are below the asset's current price but still provide a comfortable buffer. The specific strike prices will depend on your risk tolerance and profit target.
Implied volatility: Implied volatility reflects the market's expectations of future price fluctuations. Higher implied volatility generally leads to higher options premiums, making it more attractive for option sellers. However, excessively high implied volatility might also indicate heightened risk or uncertainty. Evaluate the implied volatility levels of the options you plan to trade and assess whether they are within a reasonable range.
Time to expiration: The time remaining until options expiration can impact the premium you receive and the potential risks. Shorter time frames generally result in lower premiums but also limit the trade's duration and potential profits. Longer time frames provide more room for the underlying asset's price to move favorably but come with increased exposure to adverse market events. Consider your desired trade duration and how it aligns with your outlook on the underlying asset.
Benefits of a Bull Put Spread
Limited risk: Unlike naked put selling, the maximum loss potential is known upfront, allowing for better risk management.
Lower capital requirement: The strategy is implemented at a net credit, reducing the upfront capital required to initiate the trade.
Profit potential in multiple scenarios: The bull put spread can generate a profit if the underlying security remains above the higher strike price or experiences a moderate increase.
Considerations and Trade-offs
Time decay: The passage of time erodes the value of options, benefiting the strategy as long as the underlying security remains above the higher strike price.
Market volatility: Higher levels of volatility can increase option premiums, potentially improving the initial net credit received.
Margin requirements: Some brokers may require a margin account to implement this strategy, as it involves short-selling options.
Risk Management
Risk is a very personal thing, so you will need to determine the maximum loss you are willing to accept for the trade, and then set appropriate stop-loss orders or exit strategies. Consider the potential loss if the underlying asset's price falls below the lower strike price of the spread. If you're new to options trading or want to validate your strategy, consider paper trading or backtesting your bull put spread using historical data. This can help you assess the performance and risk of your strategy under various market conditions before committing real capital.
The bull put spread strategy can be an effective tool for traders who hold a bullish view on a particular stock or market. By combining the sale and purchase of put options, investors can define their risk, reduce capital requirements, and profit in multiple market scenarios. However, it is crucial to thoroughly understand the mechanics, potential risks, and market conditions before implementing this strategy. As with any investment strategy, proper research, risk management, and ongoing monitoring are key to successful implementation.
📊 Exploring Basic Options StrategiesOptions are contracts that grant buyers the right, but not the obligation, to buy or sell a security at a predetermined price in the future. Buyers pay a premium for this privilege. If market conditions are unfavorable, option holders can let the option expire without exercising it, limiting potential losses to the premium paid. Options are categorized as "call" or "put" contracts, allowing buyers to purchase or sell the underlying asset at a specified price. Beginner investors can employ various strategies using calls or puts to manage risk, including directional bets and hedging techniques.
🔹 Buying Calls (Long Calls)
Trading options offers advantages for those who want to make a directional bet in the market. It allows traders to buy call options, which require less capital than purchasing the underlying asset, and limits losses to the premium paid if the price goes down. This strategy is suitable for traders who are confident about a specific stock, ETF, or index fund and want to manage risk. Additionally, options provide leverage, enabling traders to amplify potential gains by using smaller amounts of capital compared to trading the underlying asset directly. For example, instead of investing $10,000 to buy 100 shares of a $100 stock, traders can spend $2,000 on a call contract with a strike price 10% higher than the current market price.
🔹 Buying Puts (Long Puts)
Put options provide the holder with the right to sell the underlying asset at a predetermined price before the contract expires. This strategy is favored by traders who hold a bearish view on a specific stock, ETF, or index but want to limit their risk compared to short-selling. It also allows traders to utilize leverage to capitalize on declining prices. Unlike call options that benefit from price increases, put options increase in value as the underlying asset's price decreases. While short-selling also profits from price declines, the risk is unlimited as prices can theoretically rise infinitely. In contrast, if the underlying asset's price exceeds the strike price of a put option, the option simply expires without value.
🔹 Covered Calls
A covered call strategy involves selling a call option on an existing long position in the underlying asset. This approach is different from simply buying a call or put option. Traders who use covered calls expect little or no change in the underlying asset's price and want to collect the option premium as income. They are willing to limit the upside potential of their position in exchange for some downside protection.
🔹 Risk/Reward
A long straddle strategy involves purchasing both a call option and a put option simultaneously. While the cost of a long straddle is higher than buying either a call or put option alone, the maximum potential loss is limited to the amount paid for the straddle. On the other hand, the potential reward is theoretically unlimited on the upside. However, the downside is capped at the strike price. For example, if you own a $20 straddle and the stock price drops to zero, the maximum profit you can make is $20.
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$ARKK - The Growth Story will PUSH higherAMEX:ARKK moved nearly 8% higher since I shifted my focus towards small-cap potential in my initial post. Price is currently testing supply and approaching my target of $45. In anticipation of a potential market pullback next week, I may consider trimming my position. However, I'll continue to monitor the market closely and keep an eye on the gap fill above $46.41.
$PDD - The Appeal 🔥 NASDAQ:PDD appealing setup - remaining subdued throughout the day, setting the stage for a potentially stronger push. If it surpasses $82.83, we can expect a move towards $84, followed by a possible pullback before attempting to test the 61.8% retracement level at $88.45 (gap fill). PDD's showing promise with the recent distribution of $697 million USD in deep discounts to generate consumer demand. The extended rally is also fueled by China stimulus hopes ( NYSE:BABA , NASDAQ:JD and major Chinese tickers are witnessing the same effect).
$PYPL - Brewing for further upside ☕NASDAQ:PYPL displaying relative strength with price advancing 6% since my previous analysis (considering the stock's historically low valuations and the expected clarity on their leadership outlook later this year). It remains one of my favorable long-term trades despite debatable growth outlook. With selling pressure gradually diminishing and I expect a gap fill above $69.68 within my designated timeframe for my positions.
