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A brief thread 🧵 about a $JNJ Covered Call
It almost went out of hand but stayed patient with it
In the end it worked out
I created $263 of my own dividends in April and May 🔥🔥🔥
Initial call sold on April 3:
- 4/14 $160c
- Premium: $44
#OptionsTrading #Optionselling
It almost went out of hand but stayed patient with it
In the end it worked out
I created $263 of my own dividends in April and May 🔥🔥🔥
Initial call sold on April 3:
- 4/14 $160c
- Premium: $44
#OptionsTrading #Optionselling
Soon after selling that call the price of $JNJ spiked up
It reached $166+ before the expiration date
$6+ more than my strike price
I wasn’t ready to lose my shares
So I rolled to same strike of $160 a week forward to 4/21
Added premium: $47
It reached $166+ before the expiration date
$6+ more than my strike price
I wasn’t ready to lose my shares
So I rolled to same strike of $160 a week forward to 4/21
Added premium: $47
$JNJ stayed relentless and didn’t budge much
It closed at $162.5+ by the 21st
So I had to roll the option forward again
Again a week forward and same strike price
4/28 $160c
Added premium: $55
It closed at $162.5+ by the 21st
So I had to roll the option forward again
Again a week forward and same strike price
4/28 $160c
Added premium: $55
Did you know ?
You can earn monthly rental income(between 1%-2%) from share market just like any house owner earns rent.
I have been doing this for last few years.
#OptionsTrading #Optionselling #coveredcallstrategy #stockmarkets #StockMarketindia #Nifty #Banknifty
Read on 👇
You can earn monthly rental income(between 1%-2%) from share market just like any house owner earns rent.
I have been doing this for last few years.
#OptionsTrading #Optionselling #coveredcallstrategy #stockmarkets #StockMarketindia #Nifty #Banknifty
Read on 👇
The strategy is Covered call strategy
Pre-requisites for the covered call strategy
1. You need to own a house. (Let's take #Nifty index for an example)
2. You need to own the complete house.
In our case, we need to own atleast 1 lot of Nifty.
How do we do that ? Read next
Pre-requisites for the covered call strategy
1. You need to own a house. (Let's take #Nifty index for an example)
2. You need to own the complete house.
In our case, we need to own atleast 1 lot of Nifty.
How do we do that ? Read next
3. #Nifty is currently at ~18000 & it has a lot size of 50.
We need to own Nifty ETF worth 18000 * 50 = 9,00,000
Nifty Bees is the most liquid ETF & we get 90% amount after pledging as collateral margin.
So you get 8,00,000 back as collateral as well if you need more margin.
We need to own Nifty ETF worth 18000 * 50 = 9,00,000
Nifty Bees is the most liquid ETF & we get 90% amount after pledging as collateral margin.
So you get 8,00,000 back as collateral as well if you need more margin.
Selling Cash Secured Puts are not without risks
A hidden risk is LOST OPPORTUNITY
An example:
I had sold a $129 CSP on $AAPL in December that I rolled down a couple of times to $126
A brief thread 🧵
👇👇👇
#OptionsTrading #Optionselling
A hidden risk is LOST OPPORTUNITY
An example:
I had sold a $129 CSP on $AAPL in December that I rolled down a couple of times to $126
A brief thread 🧵
👇👇👇
#OptionsTrading #Optionselling
I received $220 in premiums
In 4 weeks
I never let the $AAPL shares get assigned to me at $129
I rolled down to $126
$AAPL then went up beyond $129 and never came down to $126
I LOST MY OPPORTUNITY to buy $AAPL at $129
#OptionsTrading #optionselling
In 4 weeks
I never let the $AAPL shares get assigned to me at $129
I rolled down to $126
$AAPL then went up beyond $129 and never came down to $126
I LOST MY OPPORTUNITY to buy $AAPL at $129
#OptionsTrading #optionselling
Today $AAPL is above $165
I made 1.7% in premiums in 4 weeks
$220 on $12,900 collateral
But that’s nothing compared to the lost opportunity in Capital Gains in $AAPL
Maybe $AAPL comes back down to the $120s again?
But who knows 🤷♂️
I made 1.7% in premiums in 4 weeks
$220 on $12,900 collateral
But that’s nothing compared to the lost opportunity in Capital Gains in $AAPL
Maybe $AAPL comes back down to the $120s again?
But who knows 🤷♂️
I have 800 shares of $AMZN for long term
On Aug 1, 2022 I started selling Covered Calls against these shares
✅ My objective: To get premiums without losing my shares
✅ 9 month summary:
Premiums: $9,780
No shares lost
No active calls
A brief thread 🧵
👇
#OptionsTrading
On Aug 1, 2022 I started selling Covered Calls against these shares
✅ My objective: To get premiums without losing my shares
✅ 9 month summary:
Premiums: $9,780
No shares lost
No active calls
A brief thread 🧵
👇
#OptionsTrading
The premiums received in the amount of $9,780 is on top of the capital gains or losses in the $AMZN stock since Aug 1
I was going to hold these shares anyway
I don’t try to time the market with my core stocks by getting in and out of the stock
#OptionsTrading #Optionselling
I was going to hold these shares anyway
I don’t try to time the market with my core stocks by getting in and out of the stock
#OptionsTrading #Optionselling
It wasn’t a smooth ride up in this journey of selling $AMZN Covered Calls
There were a few times where the stock spiked up beyond my strike price
I had to carefully maneuver and manage through the Rollovers
Had to stay patient a LOT
#OptionsTrading #Optionselling
There were a few times where the stock spiked up beyond my strike price
I had to carefully maneuver and manage through the Rollovers
Had to stay patient a LOT
#OptionsTrading #Optionselling
$PLTR Covered Call Update
A brief thread 🧵 on the ups and downs of $PLTR and all the maneuvering I had to do with my Call Option
Premium: $528
Risk: $9600
5.5% return in ~4 months
16.5% annualized return
#OptionsTrading #Optionselling
👇👇👇
A brief thread 🧵 on the ups and downs of $PLTR and all the maneuvering I had to do with my Call Option
Premium: $528
Risk: $9600
5.5% return in ~4 months
16.5% annualized return
#OptionsTrading #Optionselling
👇👇👇
Sold a 1/27 $PLTR $7.5C on Jan 9
12 contracts (1200 shares)
Premium added: $72
#OptionsTrading #Optionselling
👇👇👇
12 contracts (1200 shares)
Premium added: $72
#OptionsTrading #Optionselling
👇👇👇
On Jan 27 I rolled over the $PLTR call
$PLTR was above $7.6 and I didn’t want to lose my shares
Rolled the call over by one week to:
- 2/3 $7.5C
- Premium: $216
$PLTR was above $7.6 and I didn’t want to lose my shares
Rolled the call over by one week to:
- 2/3 $7.5C
- Premium: $216
🔥 $SQ Covered Call Journey🔥
A thread 🧵 on two separate calls that I had sold against my 200 $SQ shares
Cost Basis: $69 per share
Initial calls sold on Jan 17 and 20:
1/27 $77C
1/20 $78C
Premiums: $123
👇👇👇
#OptionsTrading #Optionselling
A thread 🧵 on two separate calls that I had sold against my 200 $SQ shares
Cost Basis: $69 per share
Initial calls sold on Jan 17 and 20:
1/27 $77C
1/20 $78C
Premiums: $123
👇👇👇
#OptionsTrading #Optionselling
On Jan 20 $SQ reached beyond my strike price of $78 expiring that day
So to protect my shares I rolled over the call
To 2/3 $80
Added premium: $111
So to protect my shares I rolled over the call
To 2/3 $80
Added premium: $111
By Jan 27 $SQ was almost at $84
I could let my 1/27 $77C expire and take the capital gain loss
But I wanted to capture the upside in the stock so I didn’t want to lose the shares
No idea how far up $SQ would go
So I rolled way up and over: 6/16 $97.5
Premium: $78
I could let my 1/27 $77C expire and take the capital gain loss
But I wanted to capture the upside in the stock so I didn’t want to lose the shares
No idea how far up $SQ would go
So I rolled way up and over: 6/16 $97.5
Premium: $78
All rollovers are NOT the same when you Sell Options
What are rollovers?
You BUY back an option that you sold and then you SELL another option at a different strike price and/or expiry
Here are a few different types of rollovers
👇👇👇
🧵
#OptionsTrading #Optionselling
What are rollovers?
You BUY back an option that you sold and then you SELL another option at a different strike price and/or expiry
Here are a few different types of rollovers
👇👇👇
🧵
#OptionsTrading #Optionselling
Forced Rollover
Your option is already at a LOSS
Your option is about to be called or assigned
But you don’t want that
So you are FORCED to roll it over to the future at the same strike price or higher
Example: $AAPL
Your option is already at a LOSS
Your option is about to be called or assigned
But you don’t want that
So you are FORCED to roll it over to the future at the same strike price or higher
Example: $AAPL
The price of $AAPL is above the strike price of the call option
To prevent my shares being called at a value below my strike price I ROLLOVER the option
I kept the same strike price and only went out by a week
I could have chosen a higher strike and more distant expiry
To prevent my shares being called at a value below my strike price I ROLLOVER the option
I kept the same strike price and only went out by a week
I could have chosen a higher strike and more distant expiry
A thread 🧵 about $AAPL Covered Call that didn’t work out as I had hoped
There are risks with selling options that need to be understood
As they say “No Free Lunch”
But…
Even trades that go against you can be managed and maneuvered
👇👇👇
#OptionsTrading #Optionselling
There are risks with selling options that need to be understood
As they say “No Free Lunch”
But…
Even trades that go against you can be managed and maneuvered
👇👇👇
#OptionsTrading #Optionselling
I sold an $AAPL Covered Call on 4/10:
- 4/14 $162.5C
- Premium: $115
$AAPL was around $159 at that time so this was a higher than usual risk that I took by selecting an aggressive strike price
- 4/14 $162.5C
- Premium: $115
$AAPL was around $159 at that time so this was a higher than usual risk that I took by selecting an aggressive strike price
The risk materialized and $AAPL reached ~ $165.2 by expiry
I rolled over the call to 4/21 just prior to close on 4/14
Same strike price
Premium: $95
It was a risk by rolling over in the money but I was willing to be patient
I rolled over the call to 4/21 just prior to close on 4/14
Same strike price
Premium: $95
It was a risk by rolling over in the money but I was willing to be patient
Option Sellers make profits more frequently but they earn small amounts every time
Option Buyers earn larger profits from each winning trade but they win less frequently
Which options camp 🏕️ do you lean towards?
👇👇👇
#OptionsTrading #optionbuying #Optionselling
Option Buyers earn larger profits from each winning trade but they win less frequently
Which options camp 🏕️ do you lean towards?
👇👇👇
#OptionsTrading #optionbuying #Optionselling
Agree with this assessment about option sellers and option buyers?
I am in Option Sellers camp 😀
Buying options occasionally but mostly staying with selling
Buying options occasionally but mostly staying with selling
$DDD Covered Calls have been good to me
My Cost basis on 2800 $DDD shares: ~$6.5
I started selling Covered Calls on these shares on Oct 19, 2022
I earned $2296 in 6 months
$2072 out of that was in first month
A thread 🧵 on how
👇👇👇
#OptionsTrading #Optionselling
My Cost basis on 2800 $DDD shares: ~$6.5
I started selling Covered Calls on these shares on Oct 19, 2022
I earned $2296 in 6 months
$2072 out of that was in first month
A thread 🧵 on how
👇👇👇
#OptionsTrading #Optionselling
First Covered Call sold on $DDD on 10/19:
- 10/28 $9 x 28 lots
- Premium: $420
Call expired worthless
Then:
- 11/4 $9.5 x 28 lots
- Premium: $168
Rolled DOWN to 11/4 $9
Premium: $196
- 10/28 $9 x 28 lots
- Premium: $420
Call expired worthless
Then:
- 11/4 $9.5 x 28 lots
- Premium: $168
Rolled DOWN to 11/4 $9
Premium: $196
The 11/4 $9 Call expired worthless
Sold another call on 11/7
- 11/11 $8.5 x 28 lots
- Premium: $728
By 11 $DDD spiked from $8 to $10
I rolled over the call to 6+ months out:
- 5/19 $11 x 28 lots
- Premium: $560
Total earned so far: $2072 in < 1 month
Sold another call on 11/7
- 11/11 $8.5 x 28 lots
- Premium: $728
By 11 $DDD spiked from $8 to $10
I rolled over the call to 6+ months out:
- 5/19 $11 x 28 lots
- Premium: $560
Total earned so far: $2072 in < 1 month
🚨$AMC Cash Secured Puts 🚨
Total CSPs sold: 4
A brief thread 🧵 on all:
👇👇👇
#1:
- 3/17 $2P x 10 lots opened on 2/14
- Closed on 2/27
- Net Premium: $330 - $50 = $280
- Risk: $2000
Return: 14% in 2 weeks
Annualized: 364%
#OptionsTrading #Optionselling
Total CSPs sold: 4
A brief thread 🧵 on all:
👇👇👇
#1:
- 3/17 $2P x 10 lots opened on 2/14
- Closed on 2/27
- Net Premium: $330 - $50 = $280
- Risk: $2000
Return: 14% in 2 weeks
Annualized: 364%
#OptionsTrading #Optionselling
#2: $AMC
- 1/19/24 1P x 15 lots opened on 3/2
- Still OPEN
- Net Premium: $390
- 15 lots out of 20 filled (other 5 cancelled)
- Risk: $1500
Return: 26% in 10.5 months
Annualized: 31%
A long dated order risking $1500
- 1/19/24 1P x 15 lots opened on 3/2
- Still OPEN
- Net Premium: $390
- 15 lots out of 20 filled (other 5 cancelled)
- Risk: $1500
Return: 26% in 10.5 months
Annualized: 31%
A long dated order risking $1500
#3: $AMC
- 5/19 $2P x 5 lots opened on 3/15
- Closed on 4/21
- Net Premium: $170 - $15 = $155
- Risk: $1000
Return: 15.5% in 5.5 weeks
Annualized: 146%
#OptionsTrading #Optionselling
- 5/19 $2P x 5 lots opened on 3/15
- Closed on 4/21
- Net Premium: $170 - $15 = $155
- Risk: $1000
Return: 15.5% in 5.5 weeks
Annualized: 146%
#OptionsTrading #Optionselling
A brief thread 🧵 about trades that didn’t work this week
Some were not expected to be winners right away but still counting them here
None were spectacularly bad 😎
👇👇👇
$AAPL $JNJ $TSLA
#OptionsTrading #Optionselling
Some were not expected to be winners right away but still counting them here
None were spectacularly bad 😎
👇👇👇
$AAPL $JNJ $TSLA
#OptionsTrading #Optionselling
A rollover of $JNJ Covered Call
- 4/21 $160C
When that trade was made (a rollover from previous week) $JNJ was at $166
$JNJ came down after earnings but not enough
So this one remains in the rollover “jail”
- 4/21 $160C
When that trade was made (a rollover from previous week) $JNJ was at $166
$JNJ came down after earnings but not enough
So this one remains in the rollover “jail”
$AAPL rollover
- 4/21 $162.5C
$AAPL is pretty much holding the market
It did come down some this week but not enough for the sake of this call
So rolled again today
- 4/21 $162.5C
$AAPL is pretty much holding the market
It did come down some this week but not enough for the sake of this call
So rolled again today
New iOS in #Markets
Indian #Options Speculators.
There has been a huge surge in #Retail and #Proprietary trading in #Options and more specifically in #Index Options.
The Data & Charts below are just #Crazy and getting crazier.
Indian #Options Speculators.
There has been a huge surge in #Retail and #Proprietary trading in #Options and more specifically in #Index Options.
The Data & Charts below are just #Crazy and getting crazier.
Alright as promised i'll be sharing one of my strategies from my arsenal!
Sell 1 strike ITM CE & 1 strike ITM PE at 9:16. Put a SL of 40% on both side. Once 1 side SL is hit keep the other side open.
Sell 1 strike ITM CE & 1 strike ITM PE at 9:16. Put a SL of 40% on both side. Once 1 side SL is hit keep the other side open.
Also we will re enter the side in which SL was hit once it reaches at the cost again. We exit the strategy at 3:15.
For E.g
Lets assume Nifty is trading at 18000. We will sell 17900 CE and 18100 PE. Assuming both are trading at 100 each. SL
becomes 140 on both sides.
For E.g
Lets assume Nifty is trading at 18000. We will sell 17900 CE and 18100 PE. Assuming both are trading at 100 each. SL
becomes 140 on both sides.
Lets say market moves up and CE sl gets hit. We will continue to hold position on Put.
We will sell CE again if it comes back to 100 again with a sl of 40%.
We will sell CE again if it comes back to 100 again with a sl of 40%.
Selling options can be a powerful way to generate income and manage risk in your portfolio. However, it's important to avoid common mistakes that beginner option sellers often make. Here are a few to watch out for:
#StockMarketindia #Optionselling
#StockMarketindia #Optionselling
Not Enough Premium in sale - Options prices are heavily influenced by the volatility of the underlying security. Selling an option when the Implied volatility is too low is setting up for failure.
Wrong strike selection - Selling an option too close to the ATM strike will reduce your probability of profit due to significant delta. It will give you more anxiety if you select strike closer to ATM and it's equivalent to trading futures.
Planning to BUY 100 shares of your favorite stock?
Before you do, read this thread on Writing Options. 👇
For educational purposes, I will use $SNOW as an example and
@Barchart
for the options data which is an excellent website for options!
#Optionselling #Options
Before you do, read this thread on Writing Options. 👇
For educational purposes, I will use $SNOW as an example and
@Barchart
for the options data which is an excellent website for options!
#Optionselling #Options
Selling OTM (Out of The Money) Puts (Bullish)
• Receive Premium Today
• If you are "put" the shares your cost basis will be much LOWER
• Expiration depends on your strategy, for me, I generally prefer selling 2-5 wks out for higher premiums so we will look at Dec 16 monthly
• Receive Premium Today
• If you are "put" the shares your cost basis will be much LOWER
• Expiration depends on your strategy, for me, I generally prefer selling 2-5 wks out for higher premiums so we will look at Dec 16 monthly
On choosing the "strike" price
• Choose a "strike" price you don't mind buying shares at
AND/OR
• Use delta as a gauge - the delta tells you the % that strike will be ITM at exp
• The lower the delta, the lower the probability
• Choose a "strike" price you don't mind buying shares at
AND/OR
• Use delta as a gauge - the delta tells you the % that strike will be ITM at exp
• The lower the delta, the lower the probability
#Straddle Explained
This #strategy involves two options of same strikes price & same expiry, A long straddle is created by buying a call and a put of same strike & same expiry whereas a short straddle is created by shorting a call & put option of same strike & same expiry
1/n
This #strategy involves two options of same strikes price & same expiry, A long straddle is created by buying a call and a put of same strike & same expiry whereas a short straddle is created by shorting a call & put option of same strike & same expiry
1/n
Let us say a #stock is trading at Rs 6,000 and premiums for ATM call and put options are 257 and 136 respectively.
Long #Straddle
If you buys both a call & a put at these prices, then his maximum loss will be equal to the sum of these two premiums paid, which is equal to 393
2/n
Long #Straddle
If you buys both a call & a put at these prices, then his maximum loss will be equal to the sum of these two premiums paid, which is equal to 393
2/n
And, price movement from here in either direction would first result in that person recovering his premium and then making profit. This position is undertaken when trader’s view on price of the underlying is uncertain but he thinks that in whatever direction the market moves
3/n
3/n
#USDINR #Optionselling
Few lessons from last week Fiasco.
1. IV will go from low levels to higher levels increasing premiums suddenly
2. Market is cyclic in nature; What goes up will come down: What goes down will come up
++
Few lessons from last week Fiasco.
1. IV will go from low levels to higher levels increasing premiums suddenly
2. Market is cyclic in nature; What goes up will come down: What goes down will come up
++
3. Hold on your losses until expiry; if it continues roll-in-time
4. Adjust your position until the short strangle becomes a short straddle & then all you have to do is to wait for the market to do its job.
5. last & Important - DO NOT P A N I C; Emotional control matters
++
4. Adjust your position until the short strangle becomes a short straddle & then all you have to do is to wait for the market to do its job.
5. last & Important - DO NOT P A N I C; Emotional control matters
++
These lessons doesn't seem to be a new one for me r U
But the thing is, these lessons went in air, when there was a huge spike in MTM loss & emotions took control of my mind
Tho such ocurence has redcd signfcantly from past, dis incident showd me wher I need to improve myself.
++
But the thing is, these lessons went in air, when there was a huge spike in MTM loss & emotions took control of my mind
Tho such ocurence has redcd signfcantly from past, dis incident showd me wher I need to improve myself.
++
Many traders usually buy OTM options near the day end, especially on expiry days, with Hero or zero mentality. Seeing certain volatile movements at times, they think such OTM trades could give exponential returns when market make some significant movement during the last hour.
Either they buy Out of the money put options and expect market to crack big time or Out of the money call options and expect market to move up much higher, sometimes people buy both put and call. (Long Strangle)
So we gathered the last 10 years historical data of Bank Nifty and analyzed their last 30 mins #Intraday movement, that is between 2:45 PM to 3:15 PM, we wanted to find out how #BankNifty usually behaves during this period and how it moves specially on expiry day as well.
It is a new #Nifty #Intraday #OptionSelling Strategy developed by us based on advanced Option Chain data analytics. It just places one trade every day with defined risk, which generates on an average 3% returns per month with minimal drawdown. Will make this available as bot soon
Free trial has been enabled for all exiting users of Squareoff , you can login to squareoffbots.com and enter your lot size
Here's the detailed write up about the #nifty #optionselling bot and how to subscribe to it bit.ly/niftyoptionsel…
#optionselling - We know #StockMarket always moves up in longer run, what if we short the Put options every month, can we make money in the longer run, as it would expire worthless as market move up? So, I tested this logic with last 11 years data, including 2008 bear market.
I do not want to short deep OTM options, since premiums are too low in it, so i took OTM options which are just 2% away from Spot price. I enter the trade on expiry day and exit on next month expiry day. Monthly expiry,not weekly.
I did a scatter plot to find what's the close price of all trades from 2008 to 2019. As you can see, out of 140 expiry, almost 100 expiry, all put options expired worthless. near zero ,however there are certain days, where market tanked, and PUT options expired deep ITM
We have analysed the historical data to find out how #BankNifty moved on expiry days. Most of the time Bank Nifty ended the #expiryday with flat movement, there are very few days where bank Nifty closed more than 1% from its open price. squareoff.in/single-post/Ba…
The average intraday % returns on expiry days is just 0.03%, which means on expiry days, the markets are closing near the open price itself, which means that all options strikes that are above/below 0.5% or 1% from spot price expire worthless.
There were only 19 days out of 107 expiry days, where bank nifty ended up with more 1% movement, which is just 17% of the time. Instead of buying OTM options on expiry days, #optionselling is more profitable provided if you are able to control your risk during the wild movements
Don't create focus on return in trades.
3/n
3/n
The God of #Options #Greeks is often disregarded and has no mercy, especially on #Options #expiration day.
A #Thread on #Gamma.
#OptionsGreeks
1/n
A #Thread on #Gamma.
#OptionsGreeks
1/n
The primary feature of #Options is their non-linear payout.
Most traders understand that #OptionsPricing is dependent on the price of the underlying, but the response is non-linear. #Gamma is the variable that describes this non-linearity.
#OptionsGreeks
2/n
Most traders understand that #OptionsPricing is dependent on the price of the underlying, but the response is non-linear. #Gamma is the variable that describes this non-linearity.
#OptionsGreeks
2/n
Loosely, if #Delta is the speed of the #Options position, #Gamma is the acceleration.
#OptionsGreeks
3/n
#OptionsGreeks
3/n
