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Nashville, TN
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An extensive break down of put credit spreads!
This is the first of many I will posting over the next few weeks. Feel free to ask me questions, or provide any content suggestions!
I guess as Christians, we should just stay inside and live in a bubble. No roller coasters, no risk-taking of any kind. The Founding Fathers should never have declared Independence because fear was involved, and Christians shouldn't feel fear....
What a terrible take.
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Finished with +500 of each.
Also, the cowboys offense sucks, and NFL refs definitely care about the spread.
Who is ready for the 2028, 32 team playoff after 4 SEC teams get left out of the 24 team big next year?
“Comedy expert” because she studied it at college….
A degree in comedy is a literal joke of a degree. The funniest people don’t need to study comedy. It’s a natural talent.😂😂
There is a common character trait amongst traders who are capable of achieving a 0.5%+ average daily return:
They are prone to lying
Another important observation regarding theta:
The idea that theta decay is maximized at the 30-45 DTE mark has been a bit misleading.
Like the other Greeks, theta is a calculation of the here and now, and it's limited to that.
- Absolute profit from premium decay for OTM options has been larger between the 100-25 DTE mark.
- What the 45-30 DTE range does offer is an accelerated rate of decay that puts a governor on the influence that directional price movement of the underlying has on premium.
- As time shrinks, the speed at which the underlying must move to influence premium increases.
XSP options study: 📊📈📉
On September 8th, I began tracking 3 XSP options expiring on November 3rd (56 Days to Expiration). The contracts are:
- 770 Call-> Premium= $17.00 (ATM strike on Sept 8th)
- 805 Call-> Premium= $3.20 (1 SD)
-730 Put -> Premium= $5.76 (just inside of 1 SD)
-Underlying was $767.35
The first important note:
The premium you pay/receive when entering an options trade dictates the expected standard dev of the underlying price between now and expiration.
RECORD THAT STANDARD DEVIATION and use it to monitor the daily movement of the underlying asset throughout the duration of your trade. This provides a clearer understanding of underlying asset movement than any other technical indicator available.
Failing to reference your baseline standard deviation could lead you to close out a trade too late or too early.
The charts below illustrate a few different things:
1) The obvious assumptions hold: Time is the largest threat to premium; Underlying price is the second largest.
2) Greeks are a present-value illustration, not a reliable estimate of performance regardless of what an option does.
3) There was a window of profitability for all the contracts regardless of being short or long.
4) If you go long on OTM options, take profit as soon as you get it because you will likely not get the opportunity again!
- The 805 call illustrates the impact of time the best! In the first ten days, XSP trended positive, and the option became profitable. Today XSP is at its highest point of the entire study term, but the 805 call is down 60%+
6) Profitability and probability for the OTM options are largely influenced by the immediate direction of the underlying price after opening the trade.
- The 730 put offered a greater return than the 805 call because the underlying immediately trended down.
7) For the OTM premium sellers: Patience was your biggest ally! Managing risk with a stop-loss would have risked unnecessary realized losses.
- This is especially true for the 730 put. The key is to track the underlying relative to your original Standard deviation range, and fix risk with a spread rather than a stop-loss.
8) In my opinion, the ATM call trade offered the greatest risk to short-duration traders. They could have easily been stopped out in the first 10 days. In my opinion, trading vertical spreads is a better way to approach an ATM trade.
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 770 call expiring on 11/3
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 805 call expiring on 11/3
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 730 put expiring on 11/3
XSP options study: 📊📈📉
On September 8th, I began tracking 3 XSP options expiring on November 3rd (56 Days to Expiration). The contracts are:
- 770 Call-> Premium= $17.00 (ATM strike on Sept 8th)
- 805 Call-> Premium= $3.20 (1 SD)
-730 Put -> Premium= $5.76 (just inside of 1 SD)
-Underlying was $767.35
The first important note:
The premium you pay/receive when entering an options trade dictates the expected standard dev of the underlying price between now and expiration.
RECORD THAT STANDARD DEVIATION and use it to monitor the daily movement of the underlying asset throughout the duration of your trade. This provides a clearer understanding of underlying asset movement than any other technical indicator available.
Failing to reference your baseline standard deviation could lead you to close out a trade too late or too early.
The charts below illustrate a few different things:
1) The obvious assumptions hold: Time is the largest threat to premium; Underlying price is the second largest.
2) Greeks are a present-value illustration, not a reliable estimate of performance regardless of what an option does.
3) There was a window of profitability for all the contracts regardless of being short or long.
4) If you go long on OTM options, take profit as soon as you get it because you will likely not get the opportunity again!
- The 805 call illustrates the impact of time the best! In the first ten days, XSP trended positive, and the option became profitable. Today XSP is at its highest point of the entire study term, but the 805 call is down 60%+
6) Profitability and probability for the OTM options are largely influenced by the immediate direction of the underlying price after opening the trade.
- The 730 put offered a greater return than the 805 call because the underlying immediately trended down.
7) For the OTM premium sellers: Patience was your biggest ally! Managing risk with a stop-loss would have risked unnecessary realized losses.
- This is especially true for the 730 put. The key is to track the underlying relative to your original Standard deviation range, and fix risk with a spread rather than a stop-loss.
8) In my opinion, the ATM call trade offered the greatest risk to short-duration traders. They could have easily been stopped out in the first 10 days. In my opinion, trading vertical spreads is a better way to approach an ATM trade.
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 770 call expiring on 11/3
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 805 call expiring on 11/3
ALT XSP and $SPY daily option trend relative to the underlying price and time. Based on the 730 put expiring on 11/3
Put credit spread vs. cash-secured put: Which is best?
It's pretty simple
If you are serious about owning the underlying asset, then cash-secured puts are the superior option.
If you're not serious about owning the asset, then put credit spreads are the better choice.
I am technical analysis illiterate. Can someone explain to me why people keep saying this market is difficult?
It seems normal to me 📈📉
Cool to see my former football team getting national recognition!
Naples (FL) JV football hasn’t lost a game since 2014 🤯 The Golden Eagles are riding a 73-game unbeaten streak.
Full story ⬇️
maxpreps.com/news/I6W6qamTjk…
