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VXX Sold Calls - 16 Jul & 23 Jul ExpiryI'm weary of my exposure to VXX and will try to reduce my exposure to it. For now, the price action seems to be stabilizing below the S/R line of $38. This month's entries seem tight due to the price offerings and when I entered. I'm not totally happy but it is manageable just not as defensive (Previous VXX trade I could get a good price at +60% from the strike) I might exit these trades a week early and take a smaller profit so that I can get better Aug prices. My Concerns on the VXX: 1) Inflation worries seem to be quietened but this will come back 2) VXX has an exposure to the Tech sector and that sector is pretty volatile especially with it's crazy bullish moves Sold 45 Calls @ 1.02 Strike 51 - Expiry 16 July Sold 15 Calls @ 0.82 Strike 46 - Expiry 23 July BP Block: 53K Max Gain: Est $5285.76 % Distance to Strike 51: 37% % Distance to Strike 46: 29%
CBOE:VXXShort
by Ronin_trader
XRT ETF Bullish inclined Naked Puts 23 July ExpiryI originally planned for XRT to take up 45% of my BP but some how my week earlier VXX trade's required BP suddenly increased and so for July XRT is back to around 30% BP So far it seems like the inflation worries have been quietened at least for the time being. I do feel it is a matter of time. This is why I need to reduce my exposure to VXX as it is very vulnerable to the tech sector which is very volatile. XRT is retail and seems somewhat conservative at this point, but I need to find one which is more inclined towards consumer staples. Sold 45 Puts @ 0.85 Strike 85 BP Block: 48K Max Gain: Est $3825 % Distance to Strike: 9%
AMEX:XRTLong
by Ronin_trader
$REI Calls 5 Dec 17th, possible Return +494%Ring Energy Provides Encouraging Update on Northwest Shelf Phase II Development Program -- Successful 2021 Drilling Campaign Focused on Highest Rate-of-Return Inventory and Capitalizing on Higher Oil Price Environment -- THE WOODLANDS, Texas, June 16, 2021 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today provided an update on its previously announced program to drill and complete three wells (“the “Phase II Program”) on the Company’s top tier Northwest Shelf (“NWS”) acreage, targeting Ring’s highest rate-of-return projects in Yoakum County, Texas. The Bevo 664 C #2H well came online May 1, the Bevo 664 A #4H came online May 27, and the Bevo 664 A #3H came online May 30. All three wells started producing oil within three to four days of coming online, which is very encouraging in comparison to earlier wells drilled in the Section. During the last seven days, the three wells combined have achieved an average of approximately 300 barrels of oil per day per well. The Company’s working interest in each of the three wells is approximately 74%. Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “The continued successful results from our development program are very encouraging and re-enforce our confidence in the strong inventory of drilling locations on our NWS acreage. In addition to the strong production results, all seven wells in our Phase I and Phase II programs were drilled and completed on schedule and within budget. With the recent positive outcome of our spring 2021 bank redetermination, the increased flexibility afforded by our pivot to a more opportunistic hedging strategy, and a sustained higher oil price environment, we are actively developing plans for our Phase III drilling program that could commence as early as the third quarter 2021. We look forward to keeping shareholders apprised of our efforts as we remain squarely focused on maximizing free cash flow generation to best position Ring for long-term success.”
AMEX:REILong
by UnknownUnicorn19246015
$CRSR Calls 45 Nov 19th, possible Return +302%Corsair Gaming, Inc., together with its subsidiaries, designs, markets, and distributes gaming and streaming peripherals, components and systems in the Americas, Europe, the Middle East, and the Asia Pacific. The company offers gamer and creator peripherals, including gaming keyboards, mice, headsets, and controllers, as well as capture cards, stream decks, USB microphones, studio accessories, and EpocCam software. It also provides gaming components and systems comprising power supply units, cooling solutions, computer cases, and DRAM modules, as well as prebuilt and custom-built gaming PCs, and others; and PC gaming software comprising iCUE for gamers and Elgato's streaming suite for content creators. In addition, the company offers coaching and training, and other services. It sells its products through a network of distributors and retailers, including online retailers, as well as directly to consumers through its websites. Corsair Gaming, Inc. was incorporated in 1994 and is headquartered in Fremont, California. Corsair Gaming, Inc. operates as a subsidiary of Corsair Group (Cayman), LP.
NASDAQ:CRSRLong
by UnknownUnicorn19246015
2
Ride Lordstown Stock - My Worst Trade?You know, on YouTube, all these traders, they’re always showing you how much money they make with trading, but very few of them are actually talking about the bad trades. Well, you know what? I thought today I’m going to address this head-on because many of you had questions about a bad trade that I’m in. That trade being RIDE , Lordstown Motors. I want to discuss why I entered the trade in the first place, what went wrong with this trade, how it is hurting my account right now, and what I’m personally doing to get out of it. Why I Got Into RIDE So far my realized profits for the year to date are at $94,476. So that’s pretty good, right? I mean, for trading for only 6 months and this is on a $250,000 cash account, which I’m using as a margin account. So I have a stock buying power of 2:1. So $500,000 in buying power. Well you see, all of this would be handy, dandy, and good if there weren’t this one pesky, huge unrealized loss. This huge unrealized loss comes from one trade, RIDE. Now, I want to tell you first quickly why I got into this, and then I want to show you what happened, what I’ve been doing so far, and what I’m planning to do. Back in mid-February or 2021, I am with my kids at a sailing regatta in Florida, and we’re doing good. I have a few positions on, all is planned and then this massive snowstorm hits Austin, Texas. Snowmageddon! This meant that we are trapped in Florida. Yeah, boohoo, could be worse places to be. Anyhow, I’m there in my RV. So it’s a 44-foot motor home and we are stuck there, and you know what? I’m bored out of my mind, and this is when I start tinkering around with my trading plan, which I definitely shouldn’t have done. So I’m entering a trade and I’m taking it with my Mastermind group. And I say, “you know what? I am going to take an aggressive trade.” Trading while bored is never a good idea, and I don’t like to trade the usual trades. But there was nothing to do, so I wanted to take a more aggressive trade. At that point, I liked Lordstown Motors and its story. Again, this is mid-February, way before Hindenburg Report. So I’m selling puts at a strike price of 21.50, the premium was good, and the current price was somewhere around $26, so all was looking good. What Happened To RIDE? Pretty much the day before my options expire, the Hindenburg Report comes out and says that they have a bunch of orders that are fake, that are not real orders, they are just pre-commitments, and their trucks catch on fire. So it’s a scathing report. Well the markets reacted, and within a few days, RIDE fell from $24 to around $17, and I got assigned 7,000 shares at my strike price of $21.50. Now, first of all, getting assigned is not a problem at all. I’m trading The Wheel Strategy and getting assigned is part of it. I’ve been stuck in trades before that went against me. My plan when this happens is, as soon as the stock dips more than 30 percent, I am flying a rescue mission . A rescue mission means that now I am selling more puts hoping to get assigned, and therefore lowering my cost basis . My Plan To Get Out of RIDE So this all is still according to my plan, and that plan is, I will fly a rescue mission at some point when the stock is down more than 30 percent. So this means I needed the price to go down to around $14. At this point, I flew a rescue mission and sold more puts. I do believe it was for a 10 strike price. I didn’t want to use all of my buying power for a rescue mission. I like to fly rescue missions in thirds so instead of going in with 100 contracts, which I would usually do, I’m selling only 30 contracts. So now after I’m doing this and getting assigned, I’m lowering my cost basis to $15.79. This basically means that I bought 7,000 shares at $21.50, and I bought another 3,000 shares at around $10, I now own $10,000 shares at an average price, so this is the cost basis here, at an average price of $15.79, instead of $21.50. Usually, what do you see? It is very, very rare that a stock will go down in a straight line. Usually what you see that the stock is going down, bouncing a little bit back up, down, bouncing a little bit up. This is where often you can apply Fibonacci lines, right? And this is why the Fibonacci tools are so powerful where you these retracements. However, RIDE is one of the rare stocks that does not like to bounce back. RIDE Is one of these rare stocks that actually went down almost in a straight line without ever bouncing back. That, of course, causes a problem, because if I’m owning 10,000 shares at a cost basis of $15.79, and the prices are now at around $9-$10, I cannot sell calls anymore. Now, this is part of my strategy The Wheel Strategy that again, I’ve been very successfully trading for a long, long time, where I made in almost $95,000 in realized profits. How RIDE Has Affected My Account But again, this one here is a bugger. It just did not want to bounce back. Now it gets even worse and here’s why. Since I have been flying a rescue mission with one-third, where I actually bought another 3,000 shares, I am flying more rescue missions because I still have another two-thirds available for my rescue missions. So I’m selling puts, 30 puts at a time, at a level of $8 and $7, hoping to get assigned. What does RIDE do? Never goes low enough to actually get me in so that I can lower my cost basis anymore. Now, with my Mastermind members, we have been following this trade together, and many of them have actually been able to get assigned and lower their cost basis. I don’t know what happened here, this is just one of these trades where nothing goes according to plan. Well, a few things went according to plan, but here I didn’t get assigned. So this means that my cost basis is still sitting at $15.79 and RIDE at one point went all the way down to a low of $6.69. Now, when you have a cost basis of $15.79, you have a difference of $9.10. When you have a loss per share of $9.10, and you own 10,000 shares, that is an unrealized loss of $91,000. This is how bad it got. However, I was still following my plan because that’s what I like to do. I have a plan, and I’m following my plan, and I’m selling more and more premium. By doing so was able to collect $14,248 in premium. So yes, I am sitting on a big unrealized loss, but then I have realized $14,248 that I collected in premium. That money has been deposited in my account. So I can subtract this, which is around $14.28. So I’m deducting this from my cost basis to get at a new break-even of $14.37. What Is Happening With RIDE Now? OK, so this is where my cost basis is and now the magic happens. RIDE actually popped up to $15.80. Now the key question here is that you might ask, “Did you get out?” No, I did not, and there are actually two reasons for it and I want to show you exactly why. 1) When that happened I wasn’t in front of my computer. I’m not watching the stocks all day long. Usually, my trading routine is such that I’m only looking at the markets for thirty minutes in the morning. After this, I’m walking away, I’m doing other stuff, and I’m living my life. So I did not see when RIDE went all the way up to $15.80, and I did not see when shortly after this it crashed all the way down to $11. 2) The 2nd reason is super important. So let me explain this to you according to my plan. According to my plan, I am selling calls against my existing position. I sold 100 hundred calls, at 15.50. These are covered calls because I own these 10,000 shares, and I sold another 200 calls that expire tomorrow (at the time of this writing). Now, here is what happens when the stock jumps up to call options. I mean, if you know options, then you know that as the stock goes up, these call options become worth more money. This is why I’m making money on the stock. So on the stock, yay, I’m making money, and on these options, before expiration, I would lose money. Part of the game. How much were these options down when this happened? So we are talking about the 15.50 call, and they went as high as $1.07, so means that on the option, I would lose $10,700, even though right now with the stocks, I would be at break even. So even if I were in front of my computer at this time, I might not have liquidated it, because if I had, I would have still suffered a $10,700 loss. Now, obviously, everybody can say, “Well Markus you should have done this.” Yeah of course. Woulda, coulda, shoulda. You see, in hindsight, we are all the greatest traders. So what happened here? We had positive momentum, this was all before the report with the SEC was filed and it looked good, right? I mean, Lordstown Motors just announced that they will take their Lordstown week virtual, where they let the whole world see what is going on. I mean, I don’t know how good you are at chart reading, but even if you just know some simple chart reading, you would have been able to see a solid one, two, three formation, and we broke above number two. So this from a chart formation standpoint is a solid uptrend. Also, you know that I like to use my indicators and the three indicators that I like to use, according to the PowerX Strategy, are RSI, they are stochastics, they are MACD. So all of this looked really, really good, and this is where we saw that RIDE has been in an uptrend. Then the news hit and of course, you can never factor in the news, and it went all the way down. What Do I Do Now? Honestly, when I looked at the chart, at this point when everything was going on, it looked good. RIDE just recently had the highest volume ever. So what am I doing right now? I am aggressively selling calls at, or slightly below, my break even. So I have an order in there to basically roll this week’s, so this will expire worthless. By doing so, it will add another $1,000 to the existing $14,000. So this is good. It brings me up to more than $15,000. And now the next thing that I want to do here is, for next week, sell the 14 call. My idea here is that for this I would like to achieve a credit of 50 cents. Now, just to let you know, a credit of 50 cents means for the size that I’m trading, $5,000. Now for tomorrow (time of writing was on 6–10–2021), depending on what Lordstown does tomorrow, I’m willing to lower it to $3,000. You see, if I can make $3,000 per week on Lordstown Motors, that will be good. Obviously, I know that there is a good possibility that Lordstown can go further down. Yesterday that there was a massive move. We went from $10 to almost $13 on some rumors that they might have secured funding. Now, hope is not a strategy. I’m not hoping that they will secure funding, but here’s what I see. I see that if there is a small pump, and at this point the pump might only be, right now we are trading at $10.59, so if it is from $10.59 to $11.50, the 14 call option will double in value. This is when I can possibly, instead of $3,000, bring in $6,000 or $8,000 per week. Now, what does this do? It lowers my break-even to a point where I can get out with maybe a small loss. And you see, for the size that I’m trading, for me a small loss, I discussed it with my head coach Mark Hodge earlier, would be around $20,000 That’s a fairly small loss for me. That would be absolutely OK. See, based on $250,000 in cash, $20,000 is less than 10 percent, closer to an 8 percent hit. If I’m basing it on the margin of $500,000, it would be a 4 percent hit. It really depends on how you see it. You see, some of you might do it based on the cash, others might do it on the margin. So that’s what I’m looking for. Where Do I Stand With RIDE Now? So where do I stand right now? So as of now, RIDE is down. The stock is down $51,000, and I collected $14,284 in premium. So right now I’m down about $36,000. It’s not too bad. I mean, yes, let’s face it, that’s not nice. $36,000 based on my account size is around 15 percent. So it’s not nice, but it’s manageable. I mean, think about it. Have you ever done a trade that took down your account by half, or by even more? I mean, in the beginning of my trading career, I did super stupid trades. I was placing trades that really brought my account down by 50 to 60 percent. So what I’m looking for right now are these pops where we go from $10.50 to $11.50. Because the implied volatility that is governing options premium for RIDE is kind of off the chart. The implied volatility, right now, 242 percent. Two days ago it was 300 and 400 percent. So what I noticed earlier today and yesterday is, as soon as we see a one-dollar pop, which again happens all the time, this is when it’s not that nice. I have to watch it a little bit more throughout the day, which is really not my style. I really don’t like to obsess about stocks. I don’t know about you, I like to go on with my life. But here, since right now we are really in trouble and I have to get out of this trade. This is my goal here, again with hopefully a small loss, we shall see. This is why I’m looking right now for these pops, because honestly, this little pop for the size that I’m trading, this here is probably worth to be around $1,000. Currently, every $1,000 helps. So right now, the loss is around $35,000. Once I’m getting to a loss of $20,000, I’ll be fine. Tomorrow, another $1,000 is being added to the realized profits. So I’m going from $14,284 to $15,284. And then the idea is right now to sell the 14 call, and by selling the 14 call I would probably make $5,000. Now, why would I sell the 14 call, if my break-even right now is $14.39? Doesn’t that mean that I’m losing money? No, because for this I’m bringing in 50 cents so this lowers my break-even to $13.89. Anyhow, this is what is currently happening, and this by no means is ruining me or, I don’t know, changing my living style. Yeah, it would suck if I lost $20,000, but it’ll probably honestly take me four to six weeks to make back that money. So this is why I’ve shown you earlier thus far I’m sitting in $95,000 in realized profits, but let’s see how it goes.
R
by rockwelltrading
8
AMC Stock up 3,000%!What is going on with AMC Entertainment? I'm sure you've heard the news: Defying all forms of fundamental analysis and business logic, AMC Entertainment AMC once again finds itself climbing higher. AMC is up 200% advance since last week and almost 3,000% since the beginning of the year. This is another coordinated short squeeze event by retail investors - especially the users of the Reddit Forum /WallStreetBets or "Apes" - as they call themselves. Back in January, AMC Entertainment and fellow Meme Stock, GameStop GME , were the focus of an attack on institutions and hedge funds that held substantial short positions in the stocks. "Being short" means that the investor believes that the price of the stock will fall and that the underlying business does not deserve its current valuation. A short squeeze occurs when the price of a stock climbs and goes against the short position, forcing the short sellers to buy existing shares to "cover" their positions. When a stock has an unusually high short percentage, like AMC and GameStop, investors can actually force the price to go higher by buying up shares at the current price. From there, it is simple economics: the supply of shares falls as the demand increases, driving the price of the equity higher. Just exactly how much have short-sellers lost on AMC? On Wednesday, June 1st, short-sellers betting against AMC lost $2.8 billion, bringing their year-to-date losses to more than $5 billion, according to S3 Partners. The idea of short squeezing these stocks was fueled on social media, Reddit to be exact. The subreddit r/WallStreetBets made AMC and GameStop its darlings, and along the way has amassed an army of Apes numbering over 10 million. Since then, the hashtag #SqueezeAMC has trended all over the internet. Daily trading volume for AMC has topped a staggering 650 million shares over the past few trading sessions, indicating that retail investors are all in! Why Is AMC Stock So High? Mark Twain once said, "history does not repeat itself, but it often rhymes" . AMC and GameStop are once again being squeeze by r/WallStreetBets and other traders that are growing tired of the market manipulation by institutions like hedge funds. There are other catalysts as well though, including the great re-opening following the COVID-19 pandemic. AMC operates nearly 1,000 movie theaters around the world and announced that all of its U.S. locations are back open following an aggressive vaccination rollout. Early indications from both the Easter and Memorial Day long weekends are that movie fans are ready to return to theaters. We are also nearing the summer blockbuster season that will see the return of big-name movies like Space Jam 2, F9 the latest Fast and the Furious movie, and the Suicide Squad sequel. Who is buying AMC stock? AMC CEO Adam Aron is a genius: He has also been hitting all the right notes with investors. Here are just 2 examples: 1.) Aron famously announced that AMC Entertainment was “under attack” by short-sellers, which served as a rallying cry for WallStreetBets. 2.) He additionally revealed that retail investors "own more than 80%" of the company at the last count, meaning a non-institutional base now owns a super-majority of AMC shares. At the last earnings call. he said: "We work for them. I work for them... and their ambitions and passions are important to me." 3.) And yesterday, he was announcing plans that AMC investors will be rewarded with special screenings and free popcorn. Contrast that with ex-GameStop CEO George Sherman, who stayed largely quiet while his company's stock price soared in late January. Did AMC Sell More Shares? Recently, AMC Entertainment sold 8.5 million shares to an investment firm called Mudrick Capital, which helped the company raise about $230 million. Shares surged 20% after this news. Interestingly enough, on the next trading day, shareholder Mudrick Capital turned around and sold all those shares for a quick profit. Mudrick stated that the stock was now overvalued, and given the recent volatility, it's hard to fault them. Had Mudrick held onto the shares, they would now be worth well over $500 million. This morning, June 3rd, AMC announced that it filed for additional share offerings with the SEC. They said it may sell some of the 11 million shares “from time to time.” Apparently, that time was now as it completed the offering in about three hours. AMC said it sold 11.55 million shares at an average price of approximately $50.85 per share - bringing in an additional $587.4 million. This is on top of the $658.5 million already raised this quarter, resulting in a total equity raise in the second quarter of $1.246 billion. What's The Highest AMC Stock Has Been? Yesterday, on June 2nd, AMC rallied an unimaginable 95% to close the trading session at over $72.62 per share, which is the higher it has ever been. AMC has now gained 3000% year to date, which is a clear illustration of the current hysteria surrounding the stock. AMC has now surpassed GameStop's market cap, and is clearly the new favorite stock of WallStreetBets. How High Will It Go? Can AMC really hit 100,000? Nobody actually knows! Any guess is pure speculation right now, so please do not take anyone's word for an actual price target. A short squeeze like this is a ticking timebomb, and as we saw in January, the downside comes harder and faster than the ride up. If you do a quick scan of social media, you will find price targets of anywhere from $100 to $100,000 per share. Remember, it is all speculation, and there are many people who will take advantage of investors feeling FOMO, by pumping out inaccurate information. Let's take the popular figure of $100,000 per share as an example. There are 498 million shares outstanding for AMC. Simple market cap calculation would place the value of AMC at about $50 trillion, or more than the entire S&P 500 index, which is valued at about $35 trillion right now. Before we talk about whether you should be investing in AMC or not, let's talk about the fundamentals: Is AMC losing money? Yes. 2020 was tough for AMC: The company lost 4.5 Billion Dollars. AMC is in a tough position: During the pandemic in 2020, streaming services like Netflix, Disney+, Amazon Prime, Hulu and others gained a lot of momentum. And many people upgraded their home theaters. But with the cash infusion of more than $1.2 Billon, AMC can buy up their competitors, upgrade their theaters and invest in their growth. And as COVID restrictions are being lifted in the US, people are ready to get "back to normal" , and this includes visiting theaters. So AMC could be in a good position to stay in business. Will AMC go up tomorrow? Who knows? In their SEC filings, the company said: "We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, and we do not know how long these dynamics will last." And AMC CEO Adam Aron warns: "Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment." "Should I Buy AMC Shares?" This is the real question: should you buy AMC? Is AMC a good buy? If any other stock gained over 1,100% in less than six months, would that seem like a good time to buy in? Warren Buffett famously said, "be greedy when others are fearful, and fearful when others are greedy". And even the CEO himself thinks that the company is overvalued, stay away from the stock! I can guarantee that much of the FOMO investors buying in now are doing so out of greed. Now, I'm not saying the stock won't continue to rise. WallStreetBets has certainly rallied a large enough army to keep the momentum going for now. But realistically how much higher can we expect the stock to rise? But after last week's gains, most of the move might already be over, and trust me when I say, this is not a bag you want to be left holding. So you might be asking what about me? Would I buy this stock? Heck no! I tend to steer clear from volatility and this level of risk. My focus is always on SRC Profits: Systematic, Repeatable, and Consistent . If you are investing your hard-earned money, there are certainly safer investments to make than a highly speculative social media short squeeze attempt. How to buy AMC shares? At the end of the day, if you still want to buy AMC shares, all you need to do is log on to your brokerage and decide how many shares you would like. With a stock that exhibits as much volatility as AMC does, you may want to consider entering a stop/loss to protect yourself from the downside, which almost always comes faster than you think.
NYSE:AMC
by rockwelltrading
2
$TLRY 1- Leaps Calls 100 Jan 2023 2- Leaps Calls 100 Jan 2023Support and Resistance Tilray Inc. engages in the research, cultivation, production, and distribution of medical cannabis and cannabinoids. The company offers cannabis-lifestyle and consumer packaged goods; and hemp-based foods and alcoholic beverages. It offers medical cannabis in extracts and dried flower forms; and cannabis extracts, including purified oil drops and capsules. The company supplies cannabis extract products to patients, physicians, pharmacies, hospitals, governments, and researchers. It has operations in Canada, the United States, Europe, Australia, New Zealand, and Latin America. The company was formerly known as Aphria Inc. and changed its name to Tilray, Inc. Tilray Inc. is based in Leamington, Canada.
NASDAQ:TLRYLong
by UnknownUnicorn19246015
XRT ETF Bullish inclined Naked Puts 18 June ExpiryXRT is my JETS replacement. This month I was also trying to enter JETS but I couldn't get in at a good price. XRT is an ETF reflecting the US retail industry, specifically the Consumer Discretionary segment. I selected them because with the pandemic optimism and the decreasing unemployment, I expect the customers to be less tight on their retail habits especially on everyday items. ATR is low which is a good sign but my worry is the S/R line just above at 95, which might cause a retracement. But if it breaks through it would be a nice padding. Sold 50 Puts @ 0.5 Strike 82 BP Block: 43K Max Gain: Est $2500 % Distance to Strike: 13%
AMEX:XRTLong
by Ronin_trader
NIKE Put Option Play - Ex-Dividend Expiration 5/28NYSE:NKE NIKE (NKE) Put Option Play - FRI 5/28 I hope you guys were able to capitalize on todays NKE Put option play. I had to wait it out but it did pay out a nicely. OK, as many of you know, today 5/27 was the last day to buy NKE shares in order to qualify for Nike's dividend payment. Those who were only holding for the dividend are able to sell tomorrow 5/28 and still receive their payment. If you look thru NKE chart history you can clearly see a sell off directly after each qualifying date. SNAP has ran up nicely ALL WEEK after being shorted/manipulated last week so that many CALL options would not cover. I think with the potential inflation data looming over the market and it also being the end of the week, we are going to be seeing folks take some profits. Tomorrow 5/28 the Personal Consumption Expenditures Price Index will be released. This index is what is used by the FED as their preferred inflation measure. If this shows that inflation is going higher than expected, it could cause the FED to act sooner and the market WILL react. Taking into consideration these factors, I think it is likely we have a bearish day tomorrow. Pay very close attention to futures and the 10-Yr bond yield tonight and before market open as this should give us a feel as to what type of day it will be. Possible Option Play NYSE:NKE Strike Price: $136-138 Put Expiration Date: 5/28 or 6/4 Stop Loss: 40% Notes: Watch price action & volume in pre-market. Make sure there is liquidity/open interest in the option. This will be a quick in & out play as I'm anticipated a sharp gap/spike to the downside. Open to all questions, critique and conversation. I'm a beginner and would love to know what you know and pick your brain. Thanks for reading & happy trading tomorrow! Disclaimer: This is not financial advice. These are just my ideas and notes on what I may do. NYSE:NKE
NYSE:NKEShort
by CLEEN50
Option Strike Price "Secrets" In this article you will learn... - what a strike price is, - the different intervals for strike prices, - how to pick the right strike price, … and much more. Let’s get started. 1.) The basics: What is the strike price? Strike Price Definition: The strike price of an option is the price at which the option buyer has the right to buy or sell an underlying security. As an example, if you are buying a CALL option of AAPL with a strike price of 126, then you have the right to BUY 100 shares of AAPL for $126. And if you are buying a PUT option of AAPL with a strike price of 125, then you have the right to SELL 100 shares of AAPL for $125. Strike Price Intervals When you open an options chain, you will see all the different strike prices that are available. The strike price intervals are set by the options exchange and will change depending on market conditions and the price of the underlying stock. There are four commonly used strike price intervals: $1, $2.50, $5, and $10. There are currently no strict standards and the exchange reviews and decides on the strike price interval of each optionable stock from time to time in order to adjust policies to better cater to trading needs. Here are some general guidelines provided by the Chicago Board Options Exchange (CBOE): - 2.50 points strike price interval is used when the underlying stock is trading between $5 and $25, - 5 points strike price interval is used when the stock is trading between $25 and $200, - and 10 points strike price interval is used when the stock price is over $200. But these are just guidelines. The options exchanges decide on strike price intervals based on market demand and trader’s needs) more than any strict mathematical formula. In the example above, you see that AAPL is trading at about$127. So according to the guidelines, the strike price interval should be $5. But since AAPL is a very volatile stock that currently moves $2.50 per day on average, which is around 2% per day, the $5 strike price intervals wouldn’t make sense. That’s why the exchange decides to only offer $10 intervals to best serve the trader. Strike Price, Option Premium & “Moneyness” When buying or selling an option, you must choose a strike price, and often you will hear terms like: - In-The-Money (ITM), - At-The-Money (ATM), - or Out-Of-The-Money (OTM). I call this the “Moneyness” of an option. In-The-Money Options Strike Prices (ITM) TM Call Options will have strike prices below the current stock price. And ITM Put Options will have strike prices above the current stock price. In the example above, AAPL is trading at around $127 right now. Therefore, the strike prices of 125 and below are considered ITM for Call options. And the strike prices of 128 and above are considered ITM for Put options. At-The-Money Options Strike Price (ATM) An ATM option would be the closest strike price to the current market price of the stock. For our AAPL example (The current price is about $127), the strike prices of 126 and 127 are the closest strikes to the market. So these strikes are considered ATM for both Call and Put options. Out-Of-The-Money Options Strike Prices (OTM) An OTM Call Option’s strike price would be above the current market price of the stock. With an OTM Put Option, the strike price would be below the current market price of the stock. For our AAPL example (The current price is about $127), the strike prices of 128 and above are considered OTM for Call options. And the strike prices of 125 and below are considered OTM for Put options. 2.) How to Pick the Right Strike Price Wow! So many strike prices! So how do you pick the right option strike price? Are some strike prices more desirable than others? Absolutely! It really depends on what you are trying to accomplish: Do you want to BUY an option and make money? Do you want to SELL an option, collect premium and let it expire worthless or Do you want to SELL an option, collect premium, and get assigned? For now, let’s keep it easy. Let’s say you want to make money with a CALL option. Call option strike price example We will use AAPL again as an example. Right now, AAPL is trading at about $127. Let’s say you’re bullish AAPL and expect Apple to move up to 135 within the next month. If you were to look at an options chain, you would have several choices. a.) You can buy a cheap OTM option with a strike price of 135. The last price of the option was $0.86. Since options come in “100 packs”, you would have to pay $86 for the option. This would allow you to buy 100 shares of AAPL at a price of $135. b.) You can buy an ATM option with a strike price of 127. This option is more expensive. The last traded price was $3.80, so you would have to invest $380 for this option. And this option would allow you to buy 100 shares of AAPL at a price of $127. c.) You can buy an ITM option with a strike price of 124. This option is the most expensive. The last traded price was $5.90, so you would have to invest $590 for this option. And this option would allow you to buy 100 shares of AAPL at a price of $124. Now let’s say that AAPL never goes back up to $135. Let’s say that on expiration day (June 11), AAPL is trading at $134: a.) OTM Option with a strike price of 135 This option allows you to buy 100 shares of AAPL at $135. Since AAPL is trading at 134, that wouldn’t make sense. Why would you pay MORE for 100 shares of AAPL than the underlying stock price? So this option is worth nothing, and you lose the $86 option premium that you paid. b.) ATM Option with a strike price of 127 This option allows you to buy 100 shares of AAPL at $127. Since AAPL is trading at 134, you could buy 100 shares at $127 and immediately sell them for $134. In this case, you would make 134–127 = 7 per share. 1 option allows you to buy 100 shares, so your profit is $700. You paid $380 for this option and make $700. That’s a net profit of 700–380 = 320 or 84% based on your initial investment! c.) ITM Option with a strike price of 124 This option allows you to buy 100 shares of AAPL at $124. Since AAPL is trading at 134, you could buy 100 shares at $124 and immediately sell them for $134. In this case, you would make 134–124 = $10 per share. 1 option allows you to buy 100 shares, so your profit is $1,000. But you paid $590 for this option to make $1,000. So the net profit of this trade is 1,000–590 = 410 or 69% based on your initial investment. Let’s review: OTM Option: $86 loss ATM Option: $320 profit = 84% ITM Option: $410 profit = 69% As you can see from this example, it’s super important to pick the right strike price. The underlying security (AAPL) moved from $127 to $134. That’s a 5.5% move. Often traders who are new to options pick the cheapest options contract, i.e. the OTM option. But you would have lost the whole option premium. So should you pick the most expensive one? As you can see in this example, picking the most expensive option (i.e. ITM option) would have yielded the higher DOLLAR amount. But in terms of Return on Investment (ROI), the ITM option was best. Based on the trading strategy that you use, I can give you several guidelines on how to pick the right strike price. In a nutshell, when you are BUYING options, you want to buy an ATM or ITM options contract. And when you are SELLING options, you want to sell OTM options. More about that later. 3.) Three Important Things You Need To Know There are 3 more things you need to know when about strike prices when trading options: What happens when a call option hits the strike price? What would have happened if AAPL would have traded above the strike price of $135 before expiration? Nothing — unless you choose to exercise the option. But if this happens before the expiration date, then it would be better to sell the option since you would make more money. How do I change my strike price once the trade has been placed already? You can’t. You need to choose a strike price when you enter the trade, and you can’t change it while you are in a trade. You can only “roll” the option, and here’s how it works: Let’s say you bought the OTM option with a strike price of $135. And you realize that it was too ambitious and that AAPL probably won’t hit 135 before the expiration date. So you could “roll” the option by selling your 135 call and simultaneously buying the 132 call. What Is Spot Price and Strike Price? The SPOT PRICE is the current price of the underlying security, so using AAPL as an example, Apple’s current spot price, at the time of this writing, is $126.76 which is the price it’s currently trading. The STRIKE PRICE is the price at which you can buy or sell the shares of the underlying security on or before expiration. Summary s you can see, picking the right option strike price is extremely important. It will affect your returns and it could even make or break you in the market. In a nutshell, when you are a BUYER, you want to buy ATM or ITM options since even a small move in the underlying stock price can yield double-digit returns. When you are a SELLER, it’s the opposite: You want to sell OTM options that have a low probability of getting assigned.
NASDAQ:AAPLEducation
by rockwelltrading
2
Developing a ChannelI see Yelp developing a channel between 37.31 and 40.95. There's a possibility that this flag pattern turns into a continuation of a previous up trend so I am cautious but today opened a broken wing iron condor to profit the most if it stays in the said range but still make a slight profit slightly above or below. If it breaks resistance, then I will roll the puts to create an iron butterfly; even a partially inverted iron condor if needed. I can also roll the calls to protect the bottom if the price falls below support but will have less room to defend serious price drops since that is the side of the long wing. Spread: Brought: Jun 18 34.5 Put Sold: Jun 18 38 Put Brought: Jun 18 39.5 Call Sold: Jun 18 43 Call Credit: 1.80 Profit Range: 36.19 and 41.30 Max Profit Range: 38.00 and 39.50
NYSE:YELP
by rufuspeoples
Avoid Unprofitable Options ! - GME ExampleHello everyone, this is an example of how to detect unprofitable options BEFORE you take the trade , to better your chances. We are all doing this (trading) for our own personal reasons, so we need to make sure we succeed. I see many people want to SHORT GME, some other people suggest they buy PUT options on GME ---> This is a MISTAKE! Because those options are considered not probable to generate money. In this example of GME (notice this is LOG CHART), you can buy a relative short-term put option for 41 days, but as you can see, to make 2 points of your risk you need the price to crash to a price of $50 within 41 days. Why is it not profitable? It costs 34.3, so you need the price to move down 34.3 dollars to be break-even, then another 34.3 dollars to 1 point of profit, and another 34.3 dollars to make 2 points of profits. All this within 41 days... price could stay flat on a range of 160-255 and only then crash... Assume that you fantasize about a 3 point profit on this PUT option, do you see the purple line? this is where the price needs to get so this fantasy will be true. HIGHLY UNLIKELY to happen. So just avoid it! Now, we will check the long-term option, maybe it gives us better results... If we look at the long-term put option for 97 days, to make 2 points of profit you need the price to crash to 6!!! So just avoid it! It is fair to say though, that the longer-term put option, if someone thinks that a crash will happen testing the price of 45 within the next 3 months, he has a play of 1 to 1, that could be profitable. But you can clearly see, that once you get that 1 to 1, you better snatch it and grab it because you are probably not going to get more $$$ from this trade. Currently, the options on GME are not worth it (unprofitable), because the implied volatility is very high (150%+), they are very expensive.
NYSE:GME
by ZoharCho
9