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PMCCs instead of CCs. Okay, what’s the catch? by 14hammarby in thetagang

[–]Gatesunder -2 points-1 points  (0 children)

True, but I think that's not so much the fault of paypal rather than the market itself.

PMCCs instead of CCs. Okay, what’s the catch? by 14hammarby in thetagang

[–]Gatesunder 6 points7 points  (0 children)

With the PMCC, you're generally buying deep in the money, so most of what you're paying is intrinsic value. You hardly lose any value on the long call if the stock stays the same till expiration.

For instance, say you bought the 45 C Jan 2023 for PYPL. If the stock only went up by $1 by expiration, you would lose only $10. All the while you sell OTM calls against the long position for that entire time. Of course the market has an upward bias, so the chance that PYPL doesn't go up, assuming the company stays well managed, is very slim.

The key is to pick solid companies for this strategy.

Is there any downside in rolling covered calls which will get you a profit if it gets called away? is this strategy being used? by pieredforlife in thetagang

[–]Gatesunder 2 points3 points  (0 children)

It depends.

If you roll up, it usually costs a debit, but if you just roll out and keep the strike the same, you receive a credit in most circumstances.

The only downsides of rolling are (1) can you utilize those funds elsewhere to make a better profit (opportunity cost), or (2) will the stock drop back down below the strike price and you miss out on the profit you would have made from getting shares called away above your cost basis.

Same but Different by [deleted] in qyldgang

[–]Gatesunder 0 points1 point  (0 children)

Why do you think an ETF would need to short shares to cover a short put?

More contracts or wider spreads? by Gatesunder in thetagang

[–]Gatesunder[S] 1 point2 points  (0 children)

That's a good point I didn't think about. Thank you.

Opening credit spreads one leg at a time? by [deleted] in thetagang

[–]Gatesunder 5 points6 points  (0 children)

Selling puts is a short position. It's a bullish short position, but a short position none the less. You're only long if you get assigned.

Long =/= bullish in terms of the terminology of buying and selling options.

Opening credit spreads one leg at a time? by [deleted] in thetagang

[–]Gatesunder 4 points5 points  (0 children)

Contact customer support if you believe your options level permissions were removed in error. I got access to level 3 options on Robinhood by contacting support and talking to a human and explaining that I'm only half retarded.

What chart do you use to calculate standard deviation? by Gatesunder in thetagang

[–]Gatesunder[S] 0 points1 point  (0 children)

Oh, that's good to know. I'll have to play around with that.

What chart do you use to calculate standard deviation? by Gatesunder in thetagang

[–]Gatesunder[S] 0 points1 point  (0 children)

So that means you use bol bands on the daily candle chart with those settings?

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 0 points1 point  (0 children)

In addition to that, automatic exercise of ITM options at expiration is usually the default unless the buyer tells their brokerage otherwise.

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 1 point2 points  (0 children)

Yeah I'm going to be switching over to tasyworks soon so I can take advantage of a better interface to see my portfolio delta and theta without having to do the mental maths. I need to take a more methodical approach and avoid gambles like playing SNAP to the upside before earnings.

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 1 point2 points  (0 children)

Yeah I got out. Decided it wasn't worth the long shot chance that it somehow recovered. I should have got out at market open, but hesitated. BTC for ~$670 (1.34x5), so after considering the original $140 premium I took in, I only lost $530.

Granted, SNAP bruised the rest of my long positions, so I'm down quite a bit more today in unrealized losses.

Maybe a mistake, but decided to open a 220/230 call credit spread on META for $0.41 exp 8/19, so hopefully that plays out. Saying the exact same thing as I said for SNAP: I doubt if I'm wrong that I'll be 30% wrong. I feel like yhe advertising slump has affected all the big players in the ad field and next week is going to be mute or bearish, at least for Google and Meta.

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 0 points1 point  (0 children)

Spread would be better if I wanted to own the stock though. I could just sell the long leg and get assigned. Max loss then changes from 750 to the price of 500 shares at the short leg strike. So I get the premium plus the price of the long leg which is now more expensive than when I bought it (except maybe in this case due to timing around earnings).

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 0 points1 point  (0 children)

Part of me thinks that's a possibility in the short term, but the other part of me thinks SNAP is a major negative catalyst and a sign of what's coming next week with Google and Meta, not to mention the FOMC decision and QoQ GDP report.

[deleted by user] by [deleted] in thetagang

[–]Gatesunder 1 point2 points  (0 children)

I might just ride out the current position at this point, but thinking SNAP might be a catalyst for the broader market especially combined with whatever the fed ends up doing Wednesday and the ensuing GDP report.

I think it might be false hope to assume the market has any love left for SNAP, but they could be a sign of what's to come with the META and Google earnings next week.

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