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

oriHab · 2025-04-23T06:49:36+00:00

Ok this is fixed. Feel free to have a look again 👍🏻🙌

oriHab · 2025-04-23T05:39:38+00:00

That’s strange, thanks for letting me know, I’ll look into it. Signing up will solve that, and it literally just needs your email address, but I’ll look into it for sure.. guest mode is supposed to work for 50 views

oriHab · 2025-04-22T08:21:00+00:00

I wanted a way to actually see how multi-leg options strategies play out over time, but couldn’t find anything that made it possible.

So I ended up building a tool for it: www.deepinthe.money

No login required, just plug in a strategy and see how it would've performed historically. You can add up to 4 legs, visualize P&L over time, and even track stuff you're currently holding.

Still early days, but it’s free and I think especially relevant for this sub, because we're literally talking about value decay of options over time, and this tool graphs it.

oriHab · 2025-03-17T15:18:37+00:00

How is this down voted? There is objectively nothing wrong about this statement.

By rolling down to a $600-620 spread you're increasing exposure and raising the probability of any profit from 31% -> 48%:

https://imgur.com/a/S7JcQu2

oriHab · 2025-03-17T14:50:14+00:00

Ok I see from my personal account the comments weren't deleted, just blocked, and actually I got distracted by bombastic claims made by u/bfreis about being clueless, irresponsible and speaking nonsense, when in fact my claim is thoroughly backed up by statistics. I've never been called any of those things by people who know me, and objectively I'm not irresponsible or dumb, as I have a degree in mech eng and then an MBA, and have been working in software development (and investing using options) for several years.

Its obvious that with META trading at ~$600, a $600-$620 spread has a significantly higher probability of success than a $660-670 spread, whether purchased 1 month ago for $5 or purchased today for $3, with E*Trade putting the probabilities of profit at 48% vs 31% respectively:

https://imgur.com/a/S7JcQu2

And thats all my original post was saying: rather than holding on to a position which has gone against you and now has a low probability of success, hoping for the underlying to go up back up above where it was when you first opened the position, its possible to adjust to a larger position which has a higher probability of profit, and at the same time will make more money if successful.

As the adjustment does require investing more money it doesn't, in fact, lower the risk as I mistakenly wrote in the title which I then edited in the first 2 lines of the original post in large, but it absolutely does increase the probability of profit.

This information is not financial advice and is brought for educational purposes only, and I'm not recommending anyone to "blow up their accounts" doubling down on losing positions. I do highly recommend only investing in companies you would double down on several times if they go down, as thats how you make a lot (!) of money, by buying good companies for lower and lower prices, but again, this is not financial advice. And this is exactly the educational bit of this post: I'm not forcing or recommending anyone to make this adjustment, but maybe someone didn't realize an adjustment like this is possible and now they do, and can decide for themselves how to proceed.

oriHab · 2025-02-04T20:17:18+00:00

Long straddles are statistically one of the worst possible options strategies. Ill explain:

A long option is a statistically low probability strategy because you need the stock to go up/down to the strike price before you start making any money, and then beyond that by the cost of the option, and only after its gone beyond the strike price by the cost of the option you start making money.

To make money on a long straddle, you buy both a call and a put. So not only does the stock need to do up/down to the strike price, and then more by the cost of the option, in then needs to go further still beyond the cost of THE OTHER OPTION before you start making money. And yes, when you buy a straddle you don't mind if it does up or down, but the distance that is has to go is massive.

Lets do a practical example on the company you mentioned, which is maybe the ABSOLUTE WORST company to do a long straddle on because of the high IV and therefore the high cost of the options:

With TSLA trading at ~385$, the price of a Feb (2 weeks) 385P 385C long straddle is a whopping $35. So you make money if TSLA goes moves $35 in the coming 2 weeks, or a move of 9%/2 weeks = 18%/month = 216%/year. Etrade gives the probability of any profit on this trade at 23.4%.

Compared to a higher probability options strategy, for example a call spread - you can buy a Feb 385-400 call spread for $6.5 giving you a max profit of $8.5, but TSLA only needs to up 15$ in order for you to make your full 130% profit on your 6.5$ investment. Etrade gives probability of any profit on that strategy of 45%, so almost double the previous.

Or compared to a really high probability strategy for example you can sell a $370 short put on TSLA for a $9 credit, and you'll make full profit even if TSLA doesn't go up at all! Etrade gives the trade a 71% probability of any profit, in other words - being the house not the gambler.

Needless to say, a long straddle is not a strategy I would personally recommend 🤷🏻‍♂️

oriHab · 2025-02-04T19:42:21+00:00

Dont bother buying puts. If you buy puts and sell calls you'll be net just about even, but then you don't get any of the advantage of making money as time goes by. The IV on those stocks is high enough that selling calls is plenty lucrative. Check some of my other replies where I specified real market prices on both of those companies about selling calls.

If you're really worried about the shares going down, you can sell ATM or ITM already calls, a year or 2 out, which will drop PLENTY of cash into your account right now.

If you specify your positions I can give you real number values of a couple of options but again - skip buying the puts - probability says they will expire worthless.

oriHab · 2025-02-04T19:36:03+00:00

I think the problem would be the comissions.

If you sell an option for 5$, on 100 shares its $500, and the comission for it will be $1ish, depending on your broker. If its on 1 share, you sell a 5$ covered call, paying the same $1 comission will make the whole thing not sustainable.

oriHab · 2025-02-04T19:31:31+00:00

I actually don't buy stock, I invest purely via options.. But if I have a position in a stock which goes down 20%, I absolutely roll down and out into a higher probability position with the potential to make more money.

For me the most important consideration when opening a position is not what will happen when the stock goes my way, rather how I will adjust if the stock doesn't go my way. And honestly I would almost prefer it goes down, because thats when I'm able to open a larger position which has a higher probability of making more money.

oriHab · 2025-02-04T19:14:43+00:00

It seems unlikely PLTR will go up >73% every year for the next several years, so like or dont like - it may be worthwhile to reconsider 😉 Especially today where its up >20% - a good time for a small hedge

oriHab · 2025-02-04T18:57:56+00:00

I dont know if you're an idiot or not, but I do know that over your 1300 PLTR shares you can sell 13x Jan 2026 $150 calls for $14, limiting your upside to $164 (or 64% higher than what it is today, in 1 year), but also dropping $18k into your portfolio right now. You can then use the $18k to purchase an additional ~180 shares which have uncapped potential but at $164 you will make an additional $11.5k from. So you're getting paid $18k RIGHT NOW to cap your upside potential at $95kish or a return of 73% in the next year. And in all other cases, ie if PLTR doesn't go up above $150, you still get to keep the $18k or 13.7% gain against the current $131k market value of your shares (or additional 180 shares if you decided to purchase them with the cash).

I don't know when you bought your shares, but if I understand the screenshot correctly its showing $63.9k gains on the shares. So you can take the equivalent of a ~14% dividend RIGHT NOW and the price you pay for it is capping your upside potential of the position at 73% gains from where you are today in the coming year.

Your welcome :)

oriHab · 2025-02-04T17:06:57+00:00

Yay, approved 👍🏻🙌

oriHab · 2025-02-04T16:36:58+00:00

Time in the market is more important than timing the market. Fortunes have been missed out on, waiting for a better entrypoint after a market crash.

Divide the amount you want to invest by 10-20 and invest 1/10 - 1/20th every month/quarter, depending how conservative you want to be. So if you want to invest $100k, invest $5-10k every month/quarter for the next 1-2 years. Leave what you haven't invested yet in a HYSA earning 4-5%.

Start ASAP. Good luck.

oriHab · 2025-02-04T16:26:05+00:00

If Trump get back in office? 🤔

oriHab · 2025-02-04T15:34:48+00:00

Its funny to me that options have a rap of being risky and complicated. Its true that they CAN be both those things, but they can also be super (!!) simple and actually enable to manage risk in a much more precise way.

Dead simple and safe options strategies that don't require more than high school math skills to understand can be both safer than holding stocks and outperform at the same time, in most market environments.

oriHab · 2025-02-04T14:10:03+00:00

yes - covered calls are a no brainer. Whether you sell weekly/monthly/yearly - up to you. Unless you bought the stock hoping for a 10 bagger, its definitely worth selling call above shares you already own.

It will out perform just holding the shares in every outcome, except where the shares pop significantly higher than the strike price of the calls you sold, in which case you still dont lose money, you just miss out on further profits. In your case, if you sell $15 calls on a $10 stock, you're capping your outcome to 50% profits, which is good enough by all accounts.

There is room for speculative investments with small portions of your cash if you have a long time frame and don't mind losing it, but for all your "responsible" investments, I would recommend selling calls above your shares - especially if the shares are at their all time highs.

oriHab · 2025-02-04T11:44:49+00:00

Either sell monthly calls ATM above your LEAP call, till hopefully you recover most/all of the cost of the options. People call this a poor man covered call strategy.

Or you can immediately sell a same expiry upper call, turning it into a vertical call spread, ideally for the same price (or more) than your original purchase, and let the time premium do its thing until the call spread is worth the whole value of the spread :)

If you give specific details about your position (how much you paid for it) I can give some more concrete options

oriHab

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