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Optionstrategies

📊 Earnings Edge: Diagonal Debit Dynamics - #2 Trade in 20242024 Trading Challenge Entry #2: Diary of an Option Trader 💡 Trade Overview: I noticed LLY soaring on the TradingView stock heatmap today. Observing the monthly chart of AMEX:XLE (healthcare sector), it has been mostly sideways for years. However, in the past two days, NYSE:LLY has demonstrated strong bullish movement with increasing volume, indicating a potential uptrend. I strategized to profit from a possible breakout or continued trend within an ascending triangle pattern. 📊 Option Strategy choice: Given the high IVR of 42 and an upcoming earnings report on February 6th before market, I anticipate further price rise. I pondered various strategies: Single leg call: Not preferable due to increasing breakeven with time. Naked put/credit vertical spread: Not ideal close to earnings, expecting IVR increase. OTM calendar: Avoided due to back month’s illiquidity. ATM calendar: Lower upper breakeven point was a concern. Noticing that IV was higher for the front-month compared to the back-month, likely due to the nearing earnings, I decided a diagonal put debit strategy was ideal to allow significant upside potential while benefiting from minor retracements as time progresses and speculating on an IVR increase. 📊 Diagonal put debit Position Legs: Chosen structure and execution details: Buy LLY Mar 15, 2024, 600.00 PUT at 27.48 (Quantity: 1) Sell LLY Feb 16, 2024, 610.00 PUT at 26.57 (Quantity: 1) Trade Details & Key Metrics: Symbol : LLY Date/Time : 2024-01-03 15:00 POP : 54% Required Buying Power ( Req.BP ): $1090 IVR : 44 Price : buying for $0.91 debit Front month leg : February 16 @610 x 1 PUT Back month leg : March 15 @600 x -1 PUT 📈 My Risk Tolerance: For the 2024 trading challenge (goal: FWB:12K to $30k), I’m limiting floating losses to 1.5% per position, thus not tolerating more than a $175 loss. This threshold is approximately around a 590 strike price. While I’m comfortable with a considerable upside range, the upper breakeven at front month expiration is around a 711 strike, increasing to 760 at 21 DTE. 🎯 My Profit Target: I’m aiming for about 2x the allowed loss, approximately around $300, but will consider taking profits if the price approaches the optimal equity curve point near a 650 strike. Realizing profits is always the more gratifying part of trading! ANYWAY: HIT THE 🚀 BUTTON ABOVE! This trade is part of my 2024 option trading challenge , where I aim to turn a 12k account above $30K 💰 (details in signature and my profile page) .
NYSE:LLYLong
by TanukiTrade
ASML Holding Options Ahead of EarningsIf you haven`t sold the regional top on ASML: nor entered the dip before the previous earnings: Then analyzing the options chain and the chart patterns of ASML Holding prior to the earnings report this week, I would consider purchasing the 770usd strike price Calls with an expiration date of 2024-1-26, for a premium of approximately $15.85. And looking at the chart this would be probably the final leg of the Double Top. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NASDAQ:ASMLLong
by TopgOptions
💡 $357 profit with 72% PoP STRANGLE - #1 trade in my challangeTrade Overview: Initiated my first options trade for the annual challenge on January 2nd with an IWM strangle. Observing high IVR in the index, I capitalized on the recent VIX spike to enter the 45DTE 212/188 strangle for 3.57cr. Trade Management: Rolling Strategy: Will roll legs as needed before expiration if price diverges. Loss Management: With a FWB:12K account, I'm capping floating loss at $200. Closing Strategy: Targeting to close around 21DTE. Trade Details: Symbol: IWM Option Type: Strangle 45DTE Entry Date: January 2, 2024 Entry Price: 3.57cr Required BP: $1681 Max Profit: $357 (20% of capital) PoP: 72% Positions: IWM Feb 16, 2024 212.00 CALL - Sell | Price: 1.76 | Qty: 1 | R. PnL: 0 | Commission: 1.251 | Fees: 0 IWM Feb 16, 2024 188.00 PUT - Sell | Price: 1.81 | Qty: 1 | R. PnL: 0 | Commission: 1.2511 | Fees: 0 Key Metrics: Tasty IVR: 42 (High) Breakevens: 184/215
AMEX:IWM
by TanukiTrade
WDFC WD-40 Company Options Ahead of EarningsIf you haven`t sold WDFC prior to previous earnings: Then analyzing the options chain and the chart patterns of WDFC WD-40 Company prior to the earnings report this week, I would consider purchasing the 230usd strike price the money Puts with an expiration date of 2024-1-19, for a premium of approximately $7.55. 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.
NASDAQ:WDFCShort
by TopgOptions
Opening: XBI Jan '25 77 Covered CallComments: This started out as an October 20th 76 short put (See Post Below) and then proceeded to crater quite massively, resulting in early, random assignment of shares. In an attempt to get my cost basis immediately within earshot of where the underlying is currently trading, I went extremely long-dated and sold the Jan '25 77 for 7.05 against my one lot, resulting in a cost basis of my original short put strike at 76 minus the 7.05 I received for the short call or 68.95 relative to today's closing price of 67.07. The Jan '25 77 short call finished the day at around 43 delta, and -- as with all my covered calls, I'll look to roll out the short call at intervals, with an eye toward keeping the short call at or above the 30 delta and/or leaving it alone if price pops back above my break even. Unfortunately, the position becomes somewhat "dead money" for a bit since the current next available expiries to roll to are limited to June '25, Dec '25, and Jan '26 (although I can certainly roll down intraexpiry if push comes to shove).
AMEX:XBILong
by NaughtyPines
ASAN Asana Options Ahead of EarningsIf you haven`t bought the dip on ASAN: Then Analyzing the options chain and the chart patterns of ASAN Asana prior to the earnings report this week, I would consider purchasing the 22.50usd strike price at the money Calls with an expiration date of 2023-12-8, for a premium of approximately $1.65. 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.
NYSE:ASANLong
by TopgOptions
Option TradingOption Trading work based on a contract that gives the buyer the right to buy or sell a certain asset, at a predetermined price (strike price) within a certain time period. A very simple task, but is there a clear technical analysis method that can provide consecutive wins? This post is not trading advice, just a statistical hypothesis test. I will try in 100 candles, and stop if the win rate is below 70% If you are an options trader, or are interested in learning the system I use, please follow this post.
BITFINEX:ETHUSDEducation
by AzrulAzir
WDAY Workday Options Ahead of EarningsIf you haven`t bought WDAY ahead of the previous earnings: Then analyzing the options chain and the chart patterns of WDAY Workday prior to the earnings report this week, I would consider purchasing the 230usd strike price Puts with an expiration date of 2023-12-15, for a premium of approximately $5.85. 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.
NASDAQ:WDAYShort
by TopgOptions