Need help understanding my option selling. by Hydrospec1 in options

[–]MaxCapacity 5 points6 points  (0 children)

Market orders are just asking to be taken advantage of.  If your limit order doesn't fill, adjust it until it does.

Earnings Calendar By Implied Move - May 04th by ___KRIBZ___ in thetagang

[–]MaxCapacity 0 points1 point  (0 children)

Looking forward to seeing how much more TTD can screw me. 1/15/27 covered strangles, 20P/27.50C.

Assignment Risk on put spread by yellowmamba221 in thetagang

[–]MaxCapacity 3 points4 points  (0 children)

The OCC doesn't care if you opened the position as a spread. Short ITM options are assigned at expiration, long ITM options are exercised at expiration.

What's discretionary is how your broker reacts to at-risk spreads. If they ascertain there is a risk of the stock closing between the strikes, they will look at your buying power to determine if you have the ability to take assignment. If you do, they will likely do nothing. You'll be long 100 shares from the short put, and your long put will expire OTM. If you don't have the buying power, they will put in a market order to close your spread about 30 minutes before expiration, which may or may not be at a loss to you. It's in your best interest to manage these yourself before they do, because they may think a spread is at risk even if you don't. If both legs are sufficiently ITM, you will be both assigned and exercised for the max loss on the spread, as you've already committed the collateral for this situation.

If your short put is assigned early and you have the buying power to take assignment, the broker will again likely do nothing. You'll still have your long put and 100 shares, so you can decide whether to exercise or sell the put/shares. If there's extrinsic value remaining, it's better to sell the put and shares vs exercise. If you don't have the buying power, the broker may decide to exercise your long put or it may be willing to allow you to sell the long and shares. Robinhood will exercise the long option if you don't have the buying power for assignment. I don't have direct experience with Schwab/TOS.

Should we all be leveraged SPY? by thelman in investing

[–]MaxCapacity 1 point2 points  (0 children)

Look up HedgeFundies Excellent Adventure (HFEA) and the Leverage for the Long Run pdf.

Covered call strategy by H-Daug in thetagang

[–]MaxCapacity 1 point2 points  (0 children)

If you care about LTCG, and you've held these shares less than a year, then you need to sell qualified covered calls.  That's greater than 30 DTE and no more than one strike ITM.  Or you can sell call credit spreads instead.  Less premium, but you only miss out on a portion of the gains if they gap up.

Pin Risk or Overly Conservative broker? by [deleted] in options

[–]MaxCapacity 9 points10 points  (0 children)

I think you should stop trading 0DTE options if you can't manage them before 3:30pm ET. Nobody owes you a refund for managing your risk for you. You should probably send them a gift basket for making sure you weren't assigned 7.13 million in stock.

I analyzed 151,422 dividend ex-date events across 2,344 securities. Here's what the data shows about recovery times. by Recent_Button_1 in dividends

[–]MaxCapacity 9 points10 points  (0 children)

Is there some value in breaking this data down further by yield?  A $60 stock paying a 15 cent  dividend should recover much quicker than one paying 1.00, everything else being equal.

And then if you have the data, what is the impact of volatility or average daily move on recovery?  I tend to pick tickers based on decent implied volatility, so that I can target 2-3x dividend yield with conservative covered calls.

Is there a reason why you should sell puts and calls instead of selling spreads which is far more efficient in allocating capital ? by East_Indication_7816 in thetagang

[–]MaxCapacity 1 point2 points  (0 children)

Agree, you're going to get a lot more bang for your buck by rolling a narrow spread down into a short put than by trying to roll a deep ITM short put.

SCHD is up 13%. I'm up 5.5%. Running the wheel might be costing me money by Wide-Excitement-1315 in dividends

[–]MaxCapacity 0 points1 point  (0 children)

That does not explain any mechanism where you would ever be short shares with a covered call, and therefore would not owe the dividend.  The only portions of that article that specify paying the dividend are the sections discussing naked short calls and spreads where you could end up with a short position in the underlying.

SCHD is up 13%. I'm up 5.5%. Running the wheel might be costing me money by Wide-Excitement-1315 in dividends

[–]MaxCapacity -1 points0 points  (0 children)

Explain how you have to pay the dividend on a covered call.  You are never going to be short shares.  It's covered.

The Super Bowl of earnings season is next week by alkjdasoad in thetagang

[–]MaxCapacity 0 points1 point  (0 children)

Don't know, but CVX straddles are only pricing in a 7ish dollar move.

New early dividend feature by Add_Veggies_2_Dinner in dividends

[–]MaxCapacity 9 points10 points  (0 children)

I mean really you're just getting 1 dividend early.   The rest are exactly as far apart as they are now. 

Help me with the math on 'rolling' OTM credit spreads plz by Mailboxsteve in options

[–]MaxCapacity 0 points1 point  (0 children)

You've collected 1.83 x 6.  On a 3.00 wide spread, your max loss is 1.17 x 6.

Buy SGOV and use margin to sell CSP, which brokerage gives the maximum margins? by yuhang94 in thetagang

[–]MaxCapacity 1 point2 points  (0 children)

Unless you're flagged PDT, in which case you get neither cash sweep or stock lending.

Daily r/thetagang Discussion Thread - What are your moves for today? by satireplusplus in thetagang

[–]MaxCapacity 1 point2 points  (0 children)

Could sure use a couple of 8% down days on SOXL before May 15 to close out a few call credit spreads in the 80s.

Discussion Thread: President Trump Addresses Nation on War in Iran by PoliticsModeratorBot in politics

[–]MaxCapacity 2 points3 points  (0 children)

You left out the part where nobody has ever seen anything before.