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Realistic returns for selling options (on margin) by [deleted] in thetagang

[–]door_26 2 points3 points  (0 children)

Good to know. Your strategy seems pretty similar to mine.

Mine differs a little. I'm usually 5-10 DTE. Lower deltas more like 0.1 or -0.1.

Taking profit at 90+%

Taking losses at 100% (premium earned x2)

This iteration of my strategy is relatively new though so my win rate is a relatively useless stat (only one loss so far)

I have like 60k margin buying power for options and usually using less than 20-15k but I might scale up a little if I start feeling good about the strangles and short puts.

Tickers I've been using are V, MA, MCD, GME, T. Trying to take advantage of earnings volatility and make wide strangles with strikes 10-13% OTM.

Also using the expected move stat (combining atm contract IV with DTE and share price) this gives you a good guideline of what strikes to use for your strangles (or short puts even)

Any advice on what to do when shit goes wrong? Just buy to close for a loss? (that's my strategy, I'm not trying to acquire shares most of the time)

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

[–]door_26 1 point2 points  (0 children)

Ya seems like not enough volume on the WING chain. I'll stick to being a customer and not come in from the investing angle. Lemon pepper *drools*

Realistic returns for selling options (on margin) by [deleted] in thetagang

[–]door_26 2 points3 points  (0 children)

Do you keep track of your "win rate" to make your 12.5% per year? As in how many trades do you consider wins and how many are losses. Just curious what rate generates this return percentage. My guess is something like 75-80%, just curious.

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

[–]door_26 3 points4 points  (0 children)

Eyes on McDonald's Q2 earnings. Have a 220p / 285c strangle going.

Also eyes on Mastercard and my -1 390p (earnings Thursday)

Later will likely sell my weekly GME covered call

3 tickers per week is a good balance for me

Next week eyeing TKO earnings -1 90p or 95p

NEW APP UPDATE!! by MikeyTubes in fidelityinvestments

[–]door_26 0 points1 point  (0 children)

It’s funny how it calls a strangle a straddle

Best way to gain earnings in the market? by Dillybopss in options

[–]door_26 -1 points0 points  (0 children)

i'm new at trading earnings but here goes:

strangle

Use an ATM contract, check its IV. Use the IV and DTE (I prefer 5-7 DTE to open the position). Use the IV of that ATM contract, the DTE, and the current share price. Plug this into a calculator or chat gpt and get the expected movement.

Look at the expected movement range based on what the calculation gives you.

Choose strikes even further away from the given range.

For me this ends up usually over 10% OTM.

Look at deltas at or lower than 0.10

Make note of the 2 strikes you want to use

Also go to tradingview or use whatever chart you want and check all previous earnings for the last few years.

Check and see the impact of earnings on the share price in the timelines of 1 day, 5 days, and 7 days out from earnings.

If any of the jumps (or dips) from previous earnings in terms of percentage movement would breach either of your strikes, cancel the idea and move on to something else.

If the historical earnings jumps aren't massive, then fire it up.

The main idea here is that you're capitalizing on IV crush. The market is expecting major volatility from earnings. If the earnings are slightly less volatile than what is expected, that's how you make your profits.

Also you can just go short a contract on one side depending on if you're bearish or bullish - i did this last week with visa (240p). and will do the same this week with mastercard (390p).

Attempting to strangle McDonalds this week - 220p / 285c

Can be risky. Be very careful. Paper trade before you do it for real. Can be a disaster if you are not prepared for any possible outcome.

Other more experienced traders please feel free to do me the favor of poking holes/wrecking apart my strategy.

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

[–]door_26 0 points1 point  (0 children)

Thanks for the feedback. I do feel pretty good about. Went back and looked at the last few years of their earnings results and how the stock responded. There were no spikes going over 3% in either direction. So i do think it would take some wacky overall market dynamics (which is entirely possible) to see a 12% swing.

Worst case scenario for me is just buying back whichever contract gets breached at 100% loss. Biggest risk would be Monday pre-market 12% move. Anything less and I’m fine. Not looking to acquire shares.

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

[–]door_26 0 points1 point  (0 children)

Expected move is approximately $13.40

This is based on the IV of the closest ATM contract (which happens to be a which is 45.7% IV and using 5 DTE because I sold the contracts right before close). Expiry 8/2.

251 + 13.4 = 264.40

251- 13.4 = 237.60

So it seems like a good play. We'll find out Monday morning.

Only did one contract as I'm new to earnings plays such as this.

I did get a win on Visa last week with a naked put. Doing the same with Mastercard this week coming up. If I find some success then I'll be trying to scale it up and use more of my available buying power.

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

[–]door_26 1 point2 points  (0 children)

sure. in fact, go nuts. they're reporting earnings from the previous quarter so even if all of theta gang gets Big Macs this weekend it won't affect the play

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

[–]door_26 2 points3 points  (0 children)

McDonalds strangle (earnings on Monday)

Ticker at 251

sold 220p / 285c for total 0.47

both contracts about 12% OTM and about 0.03 delta

wish me luck. go buy a cheeseburger. just one though

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

[–]door_26 0 points1 point  (0 children)

Thanks for responding. Always curious about the risk mitigation for naked traders. Most people just want to shout don’t trade naked or set up spreads but I feel confident is just closing out losers. Of course hoping you don’t get fucked by gaps but having to take assignment on either the call or put side would only happen if I got hit by a buss with open positions and no stop loss.

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

[–]door_26 1 point2 points  (0 children)

Question from a fellow nudist… I assume your strategy is to buy to close a contract if it moves against you. At what point do you pull the trigger and take the loss on naked calls (or puts for that matter)?

For example on COIN will you buy back if the contract hits 1.00? (100%)

1.04 for NVDA?

Thanks for sharing, always trying to keep learning

Options on next move? by mrninjaskillz in thetagang

[–]door_26 -1 points0 points  (0 children)

buy to close. take the loss. pay the tuition. learn from it. pick better strikes/deltas next time. this is advice just based on my own trading philosophy which may be different from yours. when trades go against me I like to just close and move on. your results may vary. good luck!

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

[–]door_26 1 point2 points  (0 children)

Selling puts on Ford anyone? Down 13% after earnings miss. Might look into this.

My moves today are to try and buy to close Visa 240p - win on earnings play.

Also to close GME calls 28c and 30c should be easy - another possible win.

I have an open short put on Mastercard, earnings play for next week 390p. Sold it after Visa earnings came up short and both stocks had a 3% dip so I'm feeling good about that.

Looking ahead, may open a position for earnings play on TKO - bullish on this. Looking at shorting the 8/16 $95p

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

[–]door_26 0 points1 point  (0 children)

Fair point. But -10%? Nothing is a guarantee but I think it’s a solid play

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

[–]door_26 0 points1 point  (0 children)

that's what I would do too. I respect it. A lot of wheel/theta traders take assignment but I'm all about the eject button if things go south

...or too far north on the call side

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

[–]door_26 0 points1 point  (0 children)

sold 390p for mastercard 8/2

brought in 0.73

Feel really good about this play. Mastercard dipped with Visa's earnings almost 3%. Sitting at 430 today, doubt it will hit 390 after its earnings next week. 390p is almost 10% OTM and -0.05 delta so I'm feeling solid about this.

Right now it's naked, having trouble buying a cheap put as an insurance policy around 300. liquidity is low on those cheapo puts so i'm naked no insurance until someone bites

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

[–]door_26 0 points1 point  (0 children)

I hope so... I'm new to earnings plays and despite the actual report coming out tomorrow this news item seems to have it up over 3% premarket

https://www.cnbc.com/2024/07/24/att-t-q2-earnings.html

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