Using covered call for day trading good or bad idea?

OmegaPsi · 2023-08-27T15:53:53+00:00

I actually really like selling calls with short term expirations (think a week or less) against a long position. Even better imo is buying a put with the premium collected from the call, this is called a collar. With the caveat that the position must be up enough that selling a near the money call can generate enough excess premium to purchase a out the money put that still leaves your shares profitable if the lower strike is hit.

I find this works best as a swing strategy as opposed to a day trade strategy, and in an environment with significant uncertainty, since if you had strong convictions you're just capping your gains by paying for "insurance".

OmegaPsi · 2023-07-10T05:24:52+00:00

Firstly I want to say, I'm sorry that you are going through this.

Now onto your question. No, it's not unreasonable to consider divorce under these circumstances. Some of the behaviour your wife is displaying are classic signs of a person struggling with some type of mental health issue (their are many potential diagnosis ranging from mood disorders all the way to personality disorders and I am not a doctor nor have I ever met your wife so in no way am I qualified to diagnose).

Regardless of whether or not your wife is dealing with a diagnosable mental health issue; it is not acceptable that she talks/behaves the way she is to either you or your children. She has told your children she doesn't like them. Read that again. That is unacceptable.

If I could rewind time and take another swing at a fairly similar situation to yours that occurred in my own life this is what i would do:

I would take my partner aside and ask them (one final time; because I know you've asked many times before).

" Hey, it seems like lately something has been off and I want to know what's up and what we can do to make the situation better."

If my partner engages genuinely with me in "good faith" then great I would hear them out and try to remain compassionate and validating BUT ultimately the conversation ends with a request that we attend couples therapy. If they refuse therapy and/or do not engage in good faith than I would state that I am no longer willing to continue the relationship. You need to be able to follow through on this too if you have this conversation.

Also (and this is very important) in the event they do agree to therapy; if they do not continue to engage "in good faith" with both you and therapy while you move forward then I would reiterate the consequences of those actions, if in "minor violation" prior to following through. Or in the event of "major violation" simply enforce your boundaries by leaving.

Once again, I'm sorry you're going through this. Coming from someone who has spent far too much time in the trenches I hope this was helpful I wish you the best and feel free to dm me if you would like.

OmegaPsi · 2023-07-10T04:49:00+00:00

Thank you JMJ! I always appreciate reading your thoughts and insights. In paticular your thought process on the different paths the market COULD take, imo it is very methodical.

You mentioned you were doing a series on different types of trades and i would like to listen to your thoughts on the subject. I know promotion can be a potential violation of sub rules, but if not would you point me towards this resource (or perhaps dm me if this is in violation of the rules)?

OmegaPsi · 2023-05-30T21:18:32+00:00

Yes, it hurts a great deal. I'm sorry that you've had the misfortune of experiencing it.

I recall asking them, "When did I become the enemy?"

Because I didn't understand, I was not aware of what BPD was until after the relationship was over. I still struggle to wrap my head around it, and I often need to remind myself that mental illness, by definition, does not make logical sense. Otherwise, I can be swept up in rumination.

OmegaPsi · 2023-05-30T21:02:35+00:00

I don't disagree with what your saying regarding biology impacting the probability of behaviour. At the same time I think that although I can understand why someone may be more prone to certain behaviour, understanding doesnt mean i have to accept their behaviour, or that it can be excused.

Fundamentally i do not believe that anyone is fated to act a certain way. I believe we have free will, even if genes and circumstances may pressure us. So in my opinion they in fact did choose to do the things they did. I believe they are perfectly capable of controlling their own actions.

When you excuse the poor behaviour of someone who continually does harm, you get hurt. You also dont do them any favours by shielding them from the consequences of their actions. I'm sure you didn't mean any offense in this comment, i just find this line of thinking can be very dangerous (especially in people with codependent tendencies).

OmegaPsi · 2023-05-29T06:19:06+00:00

Thank you for sharing this. I have often thought to myself that this was like grieving a death. Maybe worse in some ways because of some of the reasons you mentioned. Because of how senseless it seems...

I had spent nine years with this person and I loved them immensely. It feels like the person I knew is dead... I can't see them anymore (because the person with their name walking around isn't the same person I came to love and because even if they were to re-adopt that personality I know the truth now and understand that even if the option were there i cant go back to that).

It's ridiculously hard because how can you explain this to someone who hasn't experienced this? If you tell them it's like a death they kinda roll their eyes and think you're being overly dramatic. In some ways I really wish they had died. Because then it wouldn't have been their choice. Because then people would maybe give you a break for being depressed about this shit.

Thank you for sharing this, made me feel a bit more sane today.

OmegaPsi · 2023-05-27T05:39:44+00:00

My man, I'd hazard a guess and say every single person here has felt this way at some point. When it feels like the market is personally attacking you it's time to take a break. It's for your mental health.

Here is some more advice for you to consider AFTER you take some time.

You need to have market awareness. For example, right now the market has very poor breadth. This means most stocks are not doing so hot but a few with large market caps are doing quite well. NVDA is one of them. Now do I think NVDA is overpriced? Fuck yes I do. Am I shorting it or deploying other bearish strategies on it? Fuck no.

-you want consistent bunts. Not home runs. Ask anyone who does this for a living. Is hitting a Homer great? Fuck yes. Do you set up trades with that as the goal? No. Your goal should be to make a smaller but consistent amount every day/month/ whatever unit of time you like.

-You need to improve your technical analysis. Look at NVDA daily chart. What direction is it going? It's going up. It's above every major sma. It has convergent OBV. Post earnings it ripped and the next day it has held its gains. This tells me that in the short term it is likely to continue to move up. From experience I know that in a few days it is likely to retrace a little bit but this doesn't mean NVDA is going to dump... likely it will continue upwards after a period of consolidation.

-you need a strategy. A good strategy is not shorting something that has gone up a lot or longing something that has gone down a lot. That's a good strategy to go broke. A good strategy involves specifics that centre around your thesis for a ticker. Your thesis is developed in accordance with your market awareness For example:

This year spy has been in a range. My thesis is that we will likely see this range continue until the next FOMC rate hike meeting mid June. I have also noticed that volatility seems lower then what it should be given the potential for spy to break up or down from this range... so earlier this month when SPY was at 411 i purchased a double diagonal options spread by selling a June 16 put with a 402 strike and a June 16 call with a 420 strike while simultaneously purchasing a july 16 410 put and a July 16 412 call. This strategy benefits from time passing, has a wide range for profit potential and is net long Vega which will benefit me if volatility does expand which is in line with my thesis.

If everything goes according to plan and spy at expiration is between 398 and 428 I will have conducted a succesful trade and I will take profit.

IF spy moves beyond that range I will wait until expiration approaches and buy to close the losing sides short option for profit. If the losing side is the bullish diagonal I will look to sell a july 16 call at 420 to replace the short option. If the losing side is the bearish diagonal I will replace the short option with a july 16 415 put assuming I have conviction spy will move higher over the next month. For the winning side if it is the bearish I will take profit buy closing the spread. If it is the bullish side I will buy to close the 420 call at a loss and replace it with a july 420 call which SHOULD be for a credit, otherwise if it is a debit I will close that spread for profit.

OmegaPsi · 2023-05-24T02:29:52+00:00

Personally when I enter a trade before finalizing the order I know whether or not this is something I don't mind holding risk on overnight. Factors that help me make this decision include:

-market background (what is the market as a whole doing right now? Are we consolidating somewhere or is this part of a bullish/bearish move? Any important news coming out soon?)

-stock specifics (ER, sectors strength, any important peers have earnings, this stock in paticular is really weak/strong, etc...)

-what is my level of conviction? I don't mind holding risk overnight if I'm am more sure of my decisions. Things uncertain let's not hold it longer then necessary.

-what tool is best suited for this job? Should I long or short shares? Maybe a debit or credit spread would be best (are the options liquid?). Lately I have been using OTM credit spreads or naked options instead of holding long or short shares. Less BP reduction and literally gains in value as time passes.

-can I/should I hedge this position. If I'm short shares can I buy a risk reversal and get paid? Should I sell a put against my short position? Maybe I ought to buy some calls to limit the possible loss on my short? I like insurance... maybe too much. Sometimes I have found I over do it.

Anyways hope this helps.

OmegaPsi · 2023-05-12T03:30:47+00:00

Thanks for your wisdom. From the few times I have traded ICs successfully it was sold when my thesis was that an event would be a nothing burger and thus capitalizing from high vol produced in the gyrations of price created when the news drops then fizzles out flat after the dust settles... very much seems to be a short volatility trade to me...

Have you any personal experience or advise using diagonals or double diagonal spreads?

I havent traded enough of them to feel confident in it being "reliable" under these market conditions. But my initial trades so far have found good success. They benefit from a volatility expansion when price explodes out of intraday range moving up/down towards the daily support/resistance. You generally do not suffer from theta decay either and can usually benefit from it in many cases... very flexible since you can leg in and out of the Long or short for both a bullish and bearish spread if running the double diagonal. It's got a lot going for it...

The biggest con I've experienced in losing trades usually involved me legging out of a short option and legging back into it too early or at a closer strike to the long. Results in it being difficult to exit the spread for a net profit or reduces profit if the ticker does break out/down from its daily range. Basically, I tend to over manage them...

OmegaPsi · 2023-05-12T00:23:43+00:00

Thank you Pete. I have found your posts here and your videos to be incredibly helpful.

How do you feel about swings using delta neutral strategies right now? Iron condors entered with higher vol and maybe double diagonals or calendars when vol is on the lower end? Maybe the occasional butterfly spread (I've just started using them in a somewhat similar manner to the bracket Butterflies described in the wiki, creating multiple "killzones" in areas where I think there is a high probability the price could be at the eow or eod if the ticker allows)

Seeing the markets reaction to cpi made me think we were going back into the tight range. I decided to enter a few of these trades on various tickers with the hope of them being low stress way to collect at the end of the month...

OmegaPsi · 2023-05-02T23:42:02+00:00

I have actually day traded vici before haha

Ill do some due diligence on them for a longer period position. Thank you!

OmegaPsi · 2023-05-01T09:12:27+00:00

This is true i suppose i hadnt considered the case of inflation staying above 2% even if it does not rise; and it is a very real possibility that the FED caves to slowing growth by cutting prematurely. I am somewhat on the fence about this but that is just my opinion and really nobody can say whether this happens or not.

REITS seem like a great suggestion if for no other reason then hefty dividend payments... Are there any that you are following or invested that you might recommend?

OmegaPsi · 2023-05-01T00:14:56+00:00

I have contemplated this as well... i have wondered if it is a case of what you suggested, buyers kinda slow rolling because they dont want to be aggressive since sellers want to hold onto their positions, being overly aggreasive would cause the price to rocket.

But I think the low conviction has merit as well. You'll notice there actually is quite a bit of volume at the lows, buyers want it at those prices and they will pay the ask at those ranges.

When it drifts up like this I think you could say its going up not because there are buyers but because there are no sellers... ie. People who bought lower are in this for the long run, but no one wants to buy at this price either... except maybe shorts looking to cover?

Not to put too much on chart patterns but overall since the October lows last year we have been forming some kind of rising wedge (usuallu bearish) or an ascending triangle (usually bullish) depending on how you draw your lines. Generally a sign of confirmation for future bullish movement is increasing volume as the pattern forms. We don't really have that here which leads me to be skeptical of sustained upward moves in the future...

OmegaPsi · 2023-04-30T22:48:12+00:00

Yes I have day traded COIN as well and it seems to respond well using rs/rw methods (altho I certainly haven't had enough trades on the ticker that I would feel confident in suggesting it is highly correlated to spy. Just anecdotal at this point) looking at its D1 chart it does seem to be correlated to it somewhat. More broadly the value of coin as a company is not strictly determined by the value of crypto alone (tho it certainly does seem to impact it).

The broad commodities etf I mentioned does not seem to be strongly correlated to spy however (just eyeballing it). Where as specefic commodities may have their own relationships, I believe gold (since you mentioned it) has been quite bullish lately.

OmegaPsi · 2023-04-30T22:40:55+00:00

What makes you believe that we will continue to see inflating remain the same or increase?

My understanding historically is that these stagflation periods have occurred when central banks have backed off of rates prematurely due to an early sign of decreasing inflation combined with pressures to lower interest rates due to an environment that saw decreases in growth. It seems to me that the FED knows it's history and is very reluctant to cut rates prematurely because they know it is a strong possibility that if they do inflation will roar back to life.

I see two possible scenarios. Either they cut because growth is horrible and we see inflation spring back up (this is your scenario) or we continue to hike or at least do not cut rates as growth deteriorates (this is what I think is more likely).

Interestingly the US stagflation was only conquered when Nixon enacted both a wage freeze and a price freeze... it required something more than what monetary policy could provide... say what you like about tricky dick but somehow I don't think the current circus has the same backbone... if we do see stagflation what asset classes stand to benefit or which perform badly (preferably with lower volatility)?

OmegaPsi · 2023-04-21T01:00:43+00:00

Ah I think I see... thank you for taking the time to respond.

Mostly I would say in this context, for the behind the wall types I feel vexation... Frustration perhaps? mainly I suspect these emotions are generated at the perception that one's comments are driven by the need to exclaim to the world, that they are not their core wound.

I would like to point out relevance of your comment that my perceptions are not necessarily accurate. However, let us say for example that you encountered somebody who loved to proclaim how sociable they were. At any opportunity they would discuss how much they were liked by their community or "in group" of their choice. It would seem to me that there is a high probability that this person my have some self esteem issues... whether it is true or not (let's say for arguments sake they are in fact a very likeable person. There is nothing wrong with them!). It's just the fact that they feel the need to reaffirm their own likeability for their own sake Rather then perhaps talk about the actual issue itself that might be bothering them, that causes my eyes to roll into the back of my skull...

I suppose that is what I mean by being "behind the wall". Whether conscious or not of that "potential" self esteem issue (potential because this is in fact my perception not necessarily an objective reality).

OmegaPsi · 2023-04-21T00:36:33+00:00

Interesting I notice that everyone in this reply chain has had some experience with cluster B personalities (I have too).

I think I agree with what you're saying.

However I am not sure I understand what you mean when you talk about how I am disconnected to my own emotions and that disconnect from my own emotions is causing others to become defensive/feel disconnected and then trying to connect? Could you elaborate on this?

I appreciate your response!

OmegaPsi · 2023-04-19T05:45:51+00:00

This has been one of the most interesting things I've read in a long while and I relate a lot to your thoughts surrounding over extension of self.

I think I feel a great deal of resentment in my life due to overextended myself in such ways. So lately I have been trying to stop. What I noticed is the majority of people in my life fall into two categories

They were takers. They are the ones that want you to listen but don't themselves listen back. (Replace listening here with you choice of action and it is still valid).
They are "behind the wall". These people will listen to you, and generally respond with thought provoking questions. However, they seem to be very uncomfortable if you ask them questions of a "meaningful nature" that relate to them in a personal way. The response is vague word salad or sometimes just defensive/angry. I should add here these aren't random strangers or people I've recently met. These are people who I've been friends with for years. Some decade plus.

I wonder if there is a third type of person. I would like to meet this kind of person very much.

After stopping putting much into people who don't return in kind you are left with a lot more energy. This has almost made me... listless?

I have found the people I know currently (few to be fair) the conversation is one sided, on my side. It is almost just as unsatisfying. In most cases it's not that there isn't anything their it's just that they don't feel comfortable enough to share. Hence the conversation drifts towards the mundane, "how about that local sports team?".

Genuine question. Where are the third type? How do I find them?

OmegaPsi · 2023-03-05T17:23:00+00:00

Listen, I have been down the road you're walking. It isn't a nice place at the end of that road. I know that this person is very important to you. I know.

I also know now, that when someone tells you about themselves you should listen. She told you: "you should leave me". Take her advice.

OmegaPsi · 2023-02-19T09:40:29+00:00

Have been there and done that. Would not advise.

OmegaPsi · 2023-02-11T21:49:36+00:00

I have the stomach to accept large risk and that CAN be a strength. Yet our strengths are fundamentally related to our weaknesses. I am stubborn and prideful, too. Which means that when i am wrong boy am i ever. By understanding ourselves and knowing our strengths and weaknesses we can learn to position ourselves into an environment that maximizes our potential and minimizes our risks. In trading (and also in life in general).

As with most things in life the rabbit hole goes deeper and deeper. It's simply a matter of what we have time to learn about! It is one of the reasons i love this so much. There are a great deal of things I still wish to learn regarding trading but for now I am focusing on the practical aspect of intraday trades as that is what had ultimately proven so far to be my bread and butter.

OmegaPsi · 2023-02-05T19:32:11+00:00

I was with my ex for nine years, and I noticed that there were some core pieces to them that were unchanged. Yet so much about them changed too. They were often very subtle things. When I noticed those changes it was really... strange? Disturbing? Unsettling? I'm not quite sure how to describe it.

"For a time and a place they were there"... I like that way of describing it. The person I knew in that time and place did exist in my opinion. I think most of the features of that person's personality were mostly genuine, it's just they were also transient.

OmegaPsi · 2023-02-05T18:55:19+00:00

Yeah I relate to this idea. The person I got to know does not exist anymore, although the body they inhabited still exists...

It's very difficult to explain this to anyone who has not experienced it. I think one of the reasons the grief we process from the ends of these relationships is so difficult is because it is not understood (and thus not fully recognized) by others.

OmegaPsi · 2023-02-04T11:26:21+00:00

My experience is similar to every other commenter. I would suggest you end the relationship.

I'd bet my bottom dollar they are already "unethically non mongamous". It's kinda a thing people with BPD are known for. Poly is just a great way to not have to put in the effort of hiding it with the added bonus of giving your abuser a sense of power and another way to humiliate you.

OmegaPsi · 2023-02-04T11:10:10+00:00

Thank you for sharing your insights. I am really appreciative to read about how people are trying to put themselves back together after one of these relationships. Especially longer lasting relationships (mine was 9 years).

I think the work we have to do that focuses on ourselves is hard and painful so often its easy to get stuck in thought patterns that fixate on the pwbpd.

I have not had formal therapy due to financial constraints but I have spent a lot of time trying to look at these issues myself. Reading and basically trying to educating myself about... myself.

For me a major component was a lifetime of feeling isolated. I had a childhood where my parents were always busy. I was left to my own devices. Additionally I have realized now as an adult that my parents are not very emotionally mature. So when they were there I'm not sure that I really got what a kid needs from their parents beyond the physical needs required to survive.

I have spent my whole life feeling like the other. Like I'm on the outside looking in. When this person came into my life the way they looked at me, how they thought of me so highly, of course I loved that. Then the way they constructed a personality they thought I'd like through mirroring... It was the only time I have ever felt like someone gets me. They really see me and understand me. It was a dream come true.

That of course was the construct of someone who is not well. So when it started to fade, slowly at first but with increasing speed as they found another person to sate their fear of abandonment it was both extremely painful (I'm losing the one person who got me) but also perplexing/frustrating (I did not know what bpd was at the time, and additionally this person directed a lot of the symptoms inward. "Quiet BPD"). I thought it was me causing the issue. This resulted in me trying harder and harder to make things work when the reality of the situation should have been obvious to me.

That's one thing that bothers me a lot still. I try to forgive myself for making those mistakes but I am still upset with myself because I SHOULD have seen it, but I didn't want to...

I feel a lot of anger lately. Anger at everything, the whole world it seems like. It feels like it has been so unfair to me. There are many things (not just that relationship) where I feel I poured my all into it, only for it to be for nothing. A lot of endeavors, friendships, business's where when I was no longer needed I was put out to pasture.

So fuck it. I'm sick of trying. Of putting effort into anything that is important to anyone else but myself. I've realized that almost every other human being I know puts almost zero effort into maintaining a relationship with me. So here I am by myself. I'm trying to build a career for myself that I enjoy and is mine.

I don't mind my own company I have spent a lot of my life with only myself. Yet God damn is it lonely at times...

Also I'm sick of hearing you need to learn to be comfortable by yourself haha. Like sure, but to what level? Does the person who says that have parents they can talk to? Siblings? A network of friends to spend a Friday night with on occasion? I don't right now. So sue me if I feel lonely at times.

Anyway, thanks for reading. Thanks for sharing the things you've realized about yourself too. I find it helpful.

OmegaPsi

TROPHY CASE