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Optionstrategies

Opening (IRA): SMH January 17th 130/225 Short Put Vertical... for a 3.40 credit. Comments: Adding to my SMH position on weakness, but using a setup with a lower buying power effect (BPE). Here, I'm selling the 25 delta put and buying the put that is at a strike that is approximately one half the value of the short put strike to bring in the buying power effect by about half over going with a naked short put. The standalone 225 would cost about 221.54 to put on versus the 91.60 in buying power for this trade, with a resulting bump in ROC as a function of BPE. Metrics: Buying Power Effect: 91.60 Break Even: 221.60/share Max Profit: 3.40 ROC at Max: 3.71% (versus 1.53% for the naked) 50% Max: 1.70 ROC at 50% Max: 1.86% (versus .77% for the naked) Naturally, the warts on this setup is that I remain subject to assignment risk at the 225 strike, so need to keep that in mind as I put on trades, since BP will have to be free in order to accept assignment of a one lot at 225.
NASDAQ:SMHLong
by NaughtyPines
Opening (IRA): TLT December 20th 88 Covered Call... for a 86.84 debit. Comments: High IVR at 74.8% plus weakness. Looking to grab both the November 1st and December 1st dividends here while I twiddle my thumbs waiting for the general election to pass, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Buying Power Effect/Break Even: 86.84 Max Profit (Excluding Dividends): 1.16 Max Profit (With Dividends): 1.80 ROC at Max Excluding Dividends: 1.34% ROC at Max (With Dividends): 2.07% Immediately post-fill, I put in a GTC order to take profit at .20 short of max or 87.80, but may take if off after the December dividend drops if something more "sexy" gives me that come hither look.
NASDAQ:TLTLong
by NaughtyPines
2
Opening (IRA): QQQ Nov 15th 420 Covered Call... for a 415.50 debit. Comments: After taking off my Nov 415 covered call in profit (See Post Below), re-upping here, but at a slightly higher strike (there are only five-wides available). The 420 is at the -87 delta, so this is less aggressive than I usually do (-75 delta call). However, I've already booked profit in the November cycle, so am fine with getting what is kind of a weak sauce ROC here with plenty of "room to be wrong," particularly with the elections coming up. Metrics: Buying Power Effect/Break Even: 415.50/share Max Profit: 4.50 ($450) ROC at Max: 1.08% 50% Max: 2.25 ($225) ROC at 50% Max: .54% Will generally look to take profit at 50% max, roll out the short call on side test/IV expansion.
NASDAQ:QQQLong
by NaughtyPines
Opening (IRA): MSTR Dec 20th 75/155 Short Put Vertical... for a 5.43 credit. Comments: High IVR/IV at 61.1/113.9. Doing something a little different here, selling the 10 delta short put and buying a put that cuts BPE in about half over doing a naked. Going low delta because, well, the underlying kind of scares the poo out of me. Metrics: Buying Power Effect: 74.57 Max Profit: 5.43 ROC at Max: 7.28% 50% Max: 2.72 ROC at 50% Max: 3.64 Compare: Dec 20th 155 Short Put (Cash Secured) BPE: 148.30 Max Profit: 6.65 ROC at Max: 4.48% Will generally look to take profit at 50% max.
NASDAQ:MSTRLong
by NaughtyPines
Opening (IRA): USO Oct 18th 69 Monied Covered Call... for a 67.44 debit. Comments: This isn't as low as I wanted to get in, but the short call is below where I would've entered would have to have been more patient and waited for 70. In any event, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Buying Power Effect/Break Even: 67.44/share Max Profit: 1.56 ($156) ROC at Max: 2.31% ROC at 50% Max: .78 ($78) ROC at 50% Max: 1.16% Take profit at 50% max; roll in-profit short call to maintain net delta <30.
AMEX:USOLong
by NaughtyPines
Opened (IRA): USO Dec 20th 63 Covered Call... for a 61.26 debit. Comments: (Late Post). High IV (67.7% as of Tuesday close) + weakness. Added a "rung" to my existing position at a strike better than what I currently have on, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Buying Power Effect/Break Even: 61.26 Max Profit: 1.74 ROC at Max: 2.84% 50% Max: .87 ROC at 50% Max: 1.42% Will generally look to take profit at 50% max, roll out in-profit short call on test of take profit. Here, the 50% max take profit would be .87 + 61.26 or 62.13.
AMEX:USOLong
by NaughtyPines
Opening (IRA): USO Nov 15th 67 Covered Call... for a 65.26 debit. Comments: Adding a rung at strike prices better than what I currently have on, selling the -75 delta call against long stock to emulate the delta metrics of a 25 delta short put, but with built-in short call defense. Metrics: Buying Power Effect/Break Even: 65.26 Max Profit: 1.74 ($174) ROC at Max: 2.67% 50% Max: .87 ROC at 50% Max: 1.33% Will generally look to take profit at 50% max/roll out the short call on side test.
AMEX:USOLong
by NaughtyPines