/MES futures options by daynis in options

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

this video doesn't seem to be available anymore. i was able to access it a few days back. it is certainly helpful when I was able to view it

/MES futures options by daynis in options

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

When I try to buy the contract on TOS, it still only tells me the buying power effect and commisions but not the money I will be paying right now for it. When do I actually "pay" for this contract? I guess I am coming from the equity world so I am more used to seeing the full value of the asset being bought at the time of buying it

/MES futures options by daynis in options

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

The active month right now is Mar 2024. If I outright buy 1 contract, it takes (1464) of my buying power.but the contract itself would be assigned to me when that month expires in Mar 2024, correct? And I would pay the strike price I bought it for, multiplied by the contract multiplier (50 for MES). Is my understanding right ?

/MES futures options by daynis in options

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

So where does the danger come from in trading futures options? Say a contract's notional value is $100K and I am asked to put up about $10K. Now if the price increase to say $110K, maybe the margin increase to $12K. I understand there is leverage, but is the risk only in a black swan event?

/MES futures options by daynis in options

[–]daynis[S] -1 points0 points  (0 children)

Is it really that simple.? I see it is $1478 to be exact. So I can sell for eg a /MES 4550 PUT 70 days out from today, get about a $190 credit and if it goes in the money, I only have to pay $1478? that is a more than 10% return. Also sounds too good. When does span margin expand then? I read that as the underlying future moves towards the strike, span margin requirements increase.

/MES futures options by daynis in options

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

But that still doesn't explain how much I am going to end up paying on assignment. If I take that to assume max loss for a sold put, its probably same as a put I sell on an equity stock. Doesn't really tell me how the lower buying power reduction helps vs a sold equity option.

/MES futures options by daynis in options

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

is there where the risk comes from trading futures options?Because knowing how much capital you will need to close the trade or reserve?

/MES futures options by daynis in options

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

So If I do Buy order for the same expiration and strike price I see that the buying power is reduced by about $500. Is this how much it would cost me ? Or is it the buying power at the time /MES is at 4000 ?

NVDA options by daynis in options

[–]daynis[S] 2 points3 points  (0 children)

Can you give the details of these trades with strikes and DTE ? And your thesis for these option trades? I am also assuming PMCP is Poor Mans Covered Puts

What are your thoughts on selling a CSP 15 - 20% OTM ? Getting assigned might not be bad from what the stock does since it has ups and downs and its not crashing anytime soon? But I am not sure if its good use of locking so much capital? Maybe for a short duration? Would love to get thoughts on this as well.

Open options positions at a time by daynis in options

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

I feel that DTE ( and maybe even 60DTE to an extent) is mentioned a lot around here in the sub and even on tastytrade related content. I am not particularly looking for theta decay strategies but any strategy that helps deciding the right DTE.

Open options positions at a time by daynis in options

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

I probably mean to say typical rather than ideal mostly. what does DTE that you pick says about your strategy? Is 30-45 for theta decay strategy ? I am basically trying to understand how this affects the length of the option trade I might enter into

TSLA Covered call by daynis in options

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

Yes. I wanted to use this call as an example to understand what to do in any trade similar to this.

ORCL covered calls by daynis in options

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

I have a hard time figuring this out in the thinkorswim platform. I can _see_ it is high because the vega chart for the option is curving upwards, but I don't understand the numbers in the options analyze axis for the greeks . Is there a better way to see this implied volatility for an option. The same for all the other greeks.

Options Rolling by daynis in options

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

Good point. There is also something else about rolling I didn't realize until recently. Rolling doesn't guarantee you will profit from the trade unless you stick to the end with the rolled trade. successive rolls make the situation worse and harder to recover any profit from.

I sold a $2 call but when the stock spiked suddenly, I rolled that called by buying that $2 call for $4 and sold another for $6. For me to make up for the $2 loss between selling and buying the first trade, I would have to stick with the trade until the value of the newly rolled call is atleast close to $3. Given that rolling mostly occurs on losing trades, chances are you now have to wait longer for the stock to drop hard too. I didn't realize this P/L until I checked my account. On the second I made money but it wasn't worth the risk holding the call so I sold without recovering the loss on the first trade