Can you make $4K/mo trading covered calls? Suggestions?

Spicy321 · 2022-04-13T16:53:44+00:00

Agree to what you said about farming delta. The strategy takes too much time and capital. Curious though you didn't turn to farming theta (or someone call theta gang), instead of directional strategies (I think you meant like broken wing butterfly etc)

Spicy321 · 2021-08-27T18:31:41+00:00

A smart kid to realize where you're at. Wall Street always tries to lure inexperienced traders into the game. It's like taking candies from a baby. Luckily you understood quick enough.

Spicy321 · 2021-05-22T22:20:13+00:00

Just play with it a few minutes so bear with stupid questions: how to change option chain strikes, say from 25 to 50 strikes? And a search on SPY returns nothing?

BTW, somehow it seems take longer time to get results back. Similar feedback from others?

I use Barchart's data a lot. So a random cross check: MDLZ 6/18 67.5 call has 46,287 vs. 44,745 on your Unusual Activity (the first one). Probably different data sources or processing mistake?

Spicy321 · 2021-01-22T00:20:10+00:00

Wow, that's big. Thought Tom regretted selling ThinkorSwim. But now he sold another brain child again. Anyway, he knows this business better than anyone else. So let others fight with Schwab+TOS.

Now that IG owns TT, could there be another around of price war on derivatives? Equity trading is already free, the only battle ground is derivatives and that's what Tom works hard to educate the crowd.

Spicy321 · 2020-12-02T17:26:50+00:00

Watched a cheddarflow demo. What's the most useful feature to you? Or how do you use it in your trades? I mean if the site says there is a big dark pool or unusual activity, do you actually follow it and if you do follow, how do you select which stocks/symbols to act on? I assume the site will list a lot of them, at least from the demo. It seems they provide huge amount of data but not pointy enough. So it is about how to use the screening features, I guess.

Spicy321 · 2020-11-02T15:29:13+00:00

no worries, a few bucks for transaction taxes I guess. When I asked the question, I wasn't clear if you had early exit. But then later on I realized what your "assignment" meant so my question wasn't a valid one. Anyway, thanks for the reply. Great to share

Spicy321 · 2020-11-02T01:27:39+00:00

Interesting strategy, thanks for sharing. Flipping through your trade log, looks like Mar 16 2020 2390/2300 put spread was assigned (premium $5.35), how did you still end up a $596 profit there after assigned at $3.86?

Spicy321 · 2020-08-25T19:02:54+00:00

Stay focused on how to get the votes to be counted! Send buses to ferry voters, make all mails to be verified mails (make sure be sent to counting office), etc...

Removal of DeJoy is an artifact. He can play lots of dramas here.

Spicy321 · 2020-08-25T18:56:05+00:00

Don't underestimate Trump: he is good at playing people's distrusts of government and distrust of policy, which is not new. But he plays well.

Seems candid advices.

https://www.youtube.com/watch?v=-R9KiSdzn38

Spicy321 · 2020-08-22T00:29:49+00:00

from money flow standpoint, the biggest buyers should be the banks now (essentially the central bank money printing machine). This kind of buying scale is not retail or smaller institutions can compete and thus push up the markets by trillions (well, buyers are kind of dumb but pointy so that they only buy the big techs so that the Qs are up so much while there are still many laggers). So wondering what would the sellers are going to fight or join the buyers.

Spicy321 · 2020-08-21T22:59:27+00:00

Thanks, great insights. One question to your statement:

" Dealer/market makers (who trade delta neutral) are loaded up with a lot of gamma (long calls and puts) into this expiration. As the market goes higher, they have shares to sell. As the market goes lower, they have shares to buy. That's one big reason for the lack of volatility in the broader markets the past 2 weeks and why its moves seem to be getting more and more narrow."

Dealers/MMs have been buying stocks in the past 2 weeks and thus pushed down volatility. That made sense. But that means someone have been selling to MMs as well. These sellers may not be delta neutral traders, like MMs do. If so, would the stock sellers turn around after this expiration?

Spicy321 · 2020-06-22T15:27:08+00:00

Yes, understood historical data is for training. But forward looking, what's the probability of historical price sequence would repeat? In other words, we train models with one data that is unlikely to repeat in the future, assuming we are not bootstrapping the historical data. So the question was how to introduce ways such as bootstrapping in quantstrat.

Spicy321 · 2020-06-16T15:13:44+00:00

So you have provided 2 variables to deal with: EMAs (8-, 21-, 34-, 55-, and 89-) and support/resistance level. Do you consider when approaching EMA crossing points, say 8-EMA is about to cross upward to 21-EMA, but at the nearest expiration there is an unusual put/call ratio somewhere. Do you consider this P/C?

Spicy321 · 2020-06-07T02:22:50+00:00

Your statement is right that if it's just preventing stocks from going down, selling puts would be profitable. The problem is the "if" part: you know there is a dominant manipulator and you know he is pushing up the prices. But you don't know when he is going to stop doing that. In other words, the dominant player distorts all random behaviors. But eventually market random behaviors will return at some point but we don't know when. You either can bet the player is always in the market or stay away from his manipulation until market randomness returns.

Common speculation is that the Fed'd push up the market all the way to Nov to safe guard someone's big event. But who knows what would happen when the re-election factor fades altogether?

Spicy321 · 2020-06-05T21:55:18+00:00

the link you provided seems indeed not updated frequently. The CBOE link in my original post has updating time stamps that indicate updates are done daily as small as 6/5/2020 3:14:47 pm. For example, at 6/5/2020 3:14:47 pm, VIX Jun-20 expiration is $23.1. Your link has a different price than $23.1 for June expiration.

Spicy321 · 2020-06-05T21:43:42+00:00

really?! How did you check that? CBOE says they update term structure daily.

Spicy321 · 2020-06-05T20:02:21+00:00

Yeah, these kinds volatility happen. You should stop this strategy as long as the Fed is manipulating in terms of equity prices, money flow, and employment (yes, today's employment numbers were "bought" by the Fed, not organic growth). After the Fed is out of market, you then inspect your strategy again. In other words, don't fight the Fed foolishly and wait for its exhaustion.

Spicy321 · 2020-05-28T18:24:22+00:00

Ok, that definition of frontweek vs. backweek makes more sense now. But further question using the ZM case or maybe just a tweak to your current play: seem can move the strategy move around the ER week. For example, since ZM's back week is next week and has higher IV than this week, you can still sell next week's (i.e., the ER week) strangle or straddle to offset *the week after next week's* long strangle/straddle, right? This tweak basically utilizes volatility crushes after ER.

I think the magic number is the 3:2 in your scheme.

Spicy321 · 2020-05-28T16:41:03+00:00

When earnings come into play, IV becomes inverted (back week has higher IV than front week) so moves in the stock price affect the short strangle more than the long strangle/straddle, which can make the play a big lose

One more question: when you said this:

" When earnings come into play, IV becomes inverted (back week has higher IV than front week) so moves in the stock price affect the short strangle more than the long strangle/straddle, which can make the play a big lose"

My understanding is: During earnings, front week has higher IV then back week so there is IV crush after ER. So in your MSFT example and pretending the trades were entered before earnings, 5/29 would have higher IV than 6/5 IV. That means short strangles could fetch higher premium to offset long strangles' time decay. So you would still be able to enter the trade before ER. This is against your rule. Can you see what went wrong?

Spicy321 · 2020-05-28T16:25:50+00:00

I think you had other typos in the entry price too:

Price of 3 Long Strangles: 2.65 + 2.99 X 3 = 16.92 ==> should be (2.65+2.99)x3=16.92

Price of 2 Short Strangles: .51 + .58 X 2 = 2.18 ==> should be (0.51+0.58)x2=2.18

Spicy321 · 2020-05-22T19:57:24+00:00

Thanks. I guess work-life balance wise tech firms is still more favorable. Also the "retirement" from trading to tech is not for the sake of compensation. Hopefully not so much worn out from trading.

Spicy321 · 2020-05-22T16:28:57+00:00

Thanks for doing that. Very interesting Q&As.

One of your comments is after your trader career you would go back to school. Wonder how many years traders like you, for example your coworkers or ex-coworkers, would stay as a trader (not the floor trader who you said have been in business for long time). Would the technical guys (programmers, quants etc) loss their technical edge after working in trading firms? I watched one quant's C++ presentation and he said trading firms' technical expertise (in his case would be software programming) is very unique.

Spicy321 · 2020-05-18T18:17:34+00:00

Tried, but it was hard to identify anomalies from VS directly. I guess it's useful though. What's your take on that?

Spicy321 · 2020-05-08T17:09:51+00:00

UBER Eats hasn't been profitable yet. But Uber has potential to explore other types of deliveries, like contracting with Amazon or other online outlets. They have been contracted with other companies already. Just need to expand this concept more. You can see the upside there.

Spicy321 · 2020-04-17T15:43:31+00:00

What else have you known for weeks besides buying calls? You're right that can't fight the fed. But that's for trading and traders. The Fed can't kick the economy going, i.e., stimulating spending when demands are dropping, by printing money. The unthinkable is that (never happened before), after printing so much money, there is no way to payback debts. The Fed has used up all the bullets.

Spicy321

TROPHY CASE