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Opening (IRA): TLT Oct/Nov/Dec Short Put LadderComments: Targeting the 16 delta strike here in successive expiries to generate free cash flow and emulate dollar cost averaging into 20 year+ maturity paper. October 20th 89: .77 credit. November 17th 87: .76 credit. December 15th 86: .84 credit. Since these aren't paying buckets of cash on a per contract basis, I'll look to manage these on extrinsic approaching worthless either by closing them out in profit or rolling for credit and duration to reduce my cost basis further.
NASDAQ:TLTLong
by NaughtyPines
Opening (IRA): TLT Nov/Dec 86/84 Short PutsComments: Targeting the 16 delta strikes in November and December to erect rungs at strikes better than what I currently have on to emulate dollar cost averaging into 20 year+ maturity paper. November 17th 86: .83 credit December 15th 84: .79 credit Here, I'm fine with getting assigned and proceeding to sell short call against, but want to get in at the biggest discount the market will let me get away with because at some point, you know they're going to cut. Naturally, this may be months out in time ... .
NASDAQ:TLTLong
by NaughtyPines
Opening (IRA): TSLA January 19th 200 Covered Call... for a 191.76 debit. Metrics: Cost Basis/Break Even: 191.76 Max Profit: 8.24 ($824) Max Profit ROC %-age: 4.3% 50% of Max: 4.12 ($412) 50 Max ROC %-age: 2.1% Delta/Theta: 23.45/12.70 Here, selling the -75 delta call against a one lot in one of the higher IV single names (currently at 50.5%) to emulate a 25 delta short put, but with slightly better profit potential and a better break even than selling the same delta'd put outright. Naturally, I wish the underlying was weaker and the IV higher, but you can't have everything ... . The 25 delta short put at the 205 would bring in 7.25 or so in credit at the moment, with a 197.75 break even. This is relative to the maximum profit potential of the monied covered call with the same delta metrics with a max profit potential of 8.24 (almost $100 more) and an even lower break even some 6.00 below where the short put break even would set up. Naturally, this only makes sense in a cash secured environment where the buying power effect of the naked 205 short put would be 205 - 7.25 or 197.75 and the monied covered call -- 191.76 (that's 19.8 and 19.2k, respectively). On margin, the buying power effect of the 205 short put would be substantially less, which is basically why you'd stick with the naked short put in the vast majority of instances in a margin account. As far as trade management is concerned, I'll be looking to take profit at 50% of max and/or look at rolling the short call down intra-expiry (e.g., from the 200 to the 195) or down and out (e.g., from the Jan 200 to the Feb 195) should my break even at 191.76 be tested, thus lowering my break even and reducing my cost basis.
NASDAQ:TSLALong
by NaughtyPines
Opening (IRA): TQQQ December 29th 34.5 Covered Call... for a 33.04 debit. Comments: Selling the monied -75 delta call against a one lot to potentially take advantage of early random call away/*assignment. 33.04 break even with a 1.46 ($146) max profit; 4.42% ROC/32.9% annualized as a function of buying power effect at max. "Random" call away occurs when someone holding the 34.5 long call choses to exercise it before expiration, but I'll look to close at or near max (e.g., 34.45) to avoid the call away/assignment fee if I get the opportunity to do so. On the flip side of the coin, I'll look to roll out the short call to reduce cost basis and my break even further if it chooses to crap its pants.
NASDAQ:TQQQLong
by NaughtyPines