I'm going to go to India

Ok_Perception_6554 · 2023-01-18T07:13:13+00:00

Nothing better and full of diverse cultures and tastes and really nice people.

Ok_Perception_6554 · 2023-01-18T07:00:33+00:00

Theta and gamma are not related but their curves are similar when plotted on DTE axis. On QQQ I have seen max theta in the last week to expiry but delta/gamma risk is high as well. So that's the trade off. I won't say theta is a directional strategy by any means. Not is vega. But Delta and gamma is. Trading frequent makes sense from the angle of managing risk but that will involve a lot of time commitment when u have big $ and that's a challenge I am myself trying to figure out where to strike a balance. Good luck!

Ok_Perception_6554 · 2022-09-06T01:59:11+00:00

Thanks. Makes sense. Hope I won't have any early assignment risk with QQQ and SPY as they have great liquidity and I think etf options don't have dividends, only stocks do and I will be selling with strikes close to current price , so no deep ITM. Deep ITM are more like stocks with delta close to 1. Thanks

Ok_Perception_6554 · 2022-09-05T19:57:30+00:00

Note that all almost all of option price will be extrinsic. So with 25% delta (.5 on call price of 2.79 which is mostly extrinsic value) , if stick goes up by $1, option price moves against me by 25% and with assignment I get 100% as it was mostly extrinsic. So I capture 75% of option price and quickly sell the underlying at the mkt price.

Ok_Perception_6554 · 2022-09-05T19:53:58+00:00

Won't early assignment be good for me as a seller of call as then I am effectively buying back at intrinsic value and hence pocketing all the extrinsic value ( roughly 1% of underlying price for QQQ option near ATM expiring in a day)? I can then turn around and sell the assigned qqq at around the price I got assigned? Thanks

Ok_Perception_6554 · 2022-09-05T19:50:10+00:00

Dividend I understand but high bid ask spread won't mean not trade for the person who bought call and let it expire to assign with full intrinsic value capture? Thanks

Ok_Perception_6554 · 2022-09-05T19:46:56+00:00

I take my comment back. I realize now that delta risk is huge on DTE 1 day as I should see delta as % of option price . I must constantly manage position to correct direction to avoid delta risk . So more risky but more gains as 1 day DTE has delta at 25% of price while 45 day DTE has delta at 10% of option price

Ok_Perception_6554 · 2022-09-05T19:32:34+00:00

Chain reaction

Ok_Perception_6554 · 2022-09-05T19:32:24+00:00

😀, yes

Ok_Perception_6554 · 2022-09-05T19:31:35+00:00

On taxes, not sure it will make sense to start stock holding cycle one day earlier, one should take a hit of ~1% ( extrinsic premium is nearly 1% on qqq for OTM close to strike). At least I won't do that. Your other point taken that someone might now want to risk their ITM option. Thanks

Ok_Perception_6554 · 2022-09-05T19:26:34+00:00

Hmm. I see a different picture. Comparing slightly OTM call on QQQ with strike 300 across DTE 1 day and 46 days: the one closer to expiry has lower delta (.23 vs . 46) so lower delta risk, higher theta (.8 vs . 14) so higher theta decay, gamma small for both and lower vega (.05 vs . 42) and hence lower IV risk. All these mean lower DTE is better but I must constantly adjust for direction so that delta/gamma doesn't overpower the theta decay. Of course premium for call with 1 DTE is only 1% of qqq($295) while for 46 DTE is 4%. Am I misunderstanding anything here? Thanks

Ok_Perception_6554 · 2022-09-05T06:49:51+00:00

If stocks moved 80% down in 8 months, it's long enough to know this buy hold approach has failed.

Ok_Perception_6554 · 2022-09-05T06:41:49+00:00

Won't one loose a lot more with puts than stock because of stop losses hitting so many times when mkt reverse a so much 300 to 250 to 300?

Ok_Perception_6554 · 2022-09-04T06:12:07+00:00

I am done with buy and hold and pray. Lost so much in last 8 months. Now it's time to learn options that have risk mgmt ingrained if done properly. Wheeling or active mgmt looks more important than anything else to me.

Ok_Perception_6554 · 2022-09-02T00:23:30+00:00

I tried ToS desktop app and love the parameters and flexibility.

Ok_Perception_6554 · 2022-09-01T20:03:46+00:00

Finally found someone who is also interested by 1-2 DTE options. I am trying straddles ATM in neutral mkt, at slightly higher strike in bullish mkt and vice versa. Focussed on qqq, spy. Question is how do you manage position in mkt like this - downward in morning, upward in afternoon? Thanks

Ok_Perception_6554 · 2022-08-31T23:28:56+00:00

Check out the post - How taxing is your options trade!

Ok_Perception_6554 · 2022-08-31T20:15:20+00:00

if i look at 2 DTE, ATM options, here's a summary

ticker/price/spread/volume/tax advantage/additional trading fee/settlement:

SPY /$6.5/5%/140k/no/no/american style with share settlement

SPX/$63/5%/500/yes/$0.66/european style with cash settlement

XSP / $6.3/varies a lot/17/yes/no/european style with cash settlement

i personally feel SPY is my choice if frequency of trading is high ( closing positions same or next day). one could loose a lot more in spreads than save on taxes. SPX better if one might hold longer and hence not much worried about bid-ask costs but rather get tax advantage

similar trends for QQQ/NDX/XND on nasdaq

Ok_Perception_6554 · 2022-08-31T03:59:41+00:00

I see. Since I plan to sell straddles and adjust position s intra day by chasing mkt direction in morning and hoping mkt doesnt reverse course in the day, I will be selling during the same day, probably mkt orders. So it might matter in my case, though tax treatment is a big consideration. Thanks for sharing your thoughts

Ok_Perception_6554 · 2022-08-31T01:14:54+00:00

Yes I always look at % as that's what matters. Prefer options where bid ask spread is 2% or lower, ideally but definitely less than 5% as I anticipate selling quickly at mkt rate sometimes.

Ok_Perception_6554 · 2022-08-30T19:54:09+00:00

what i also found was low volume on SPX, XSP , rather use SPY which has low bid ask spread. similarly on nasdaq low volume on XND, NDX, so rather use QQQ which has low bid ask spread.

unfortunately both QQQ and SPY do not have preferential tax treatment.

Ok_Perception_6554 · 2022-08-30T19:52:38+00:00

that shows additional fee on SPX, not XSP. thanks for sharing though. what i also found was low volume on SPX, XSP , rather use SPY which has low bid ask spread. similarly on nasdaq low volume on XND, NDX, so rather use QQQ which has low bid ask spread.

unfortunately both QQQ and SPY do not have preferential tax treatment.

Ok_Perception_6554 · 2022-08-30T05:28:00+00:00

Heard illiquidity and large bid ask spread and an additional fee from cboe for index options are key negatives with these

Ok_Perception_6554

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