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Level 2 provides more in-depth info such as bid and ask prices, volume of offers or bids at a specific price, etc. It can be advantageous depending on how you wish to trade in options. I prefer looking at past fills on an option and place my trade accordingly. Often I will place an offer to sell slightly higher than the last trade was filled. However I am sure it could be of advantage. If the goal however is to rarely own stocks but just earn premiums from puts being sold, I like the Put Options Selling Tool Analysis and the Best Bets Tool as they look at trend and strength and make recommendations based on that. I hope this helps.
I updated the trades from Dec 3 to Dec 17. You can see that I am still in-the-money with my short put strikes and intend to follow the stock lower if needed.
https://www.fullyinformed.com/members/tomorrows-trade-portfolio-ideas-for-tue-dec-3-2024/
Hi Alvin;
I’m also waiting for a bounce of some kind. I will update the trades I have done to date on Tuesday or Wednesday for you. On your question of pharmacy business, I wouldn’t have a clue what to advise. That is definitely well beyond my scope of knowledge. I like the company and if eventually I am assigned shares I will average them lower and keep selling covered calls. I’ll post again when I have updated the trades I have done so far.
I don’t pay much attention to the spread size but focus on the prior trade and place my offers in relation to that trade. For example if the prior purchase was at 24 cents I place my offer at 23 or 22 cents to buy. I don’t focus on the spread but on where trades are being filled and try to better the prior fill. I hope this helps.
I like the trade. Just watch the Put Options Selling Tool Analysis to see if the ranking begins to fall back. That will be your signal to take your profit and close the trade early.
I replied to you by email. Tech support is aware of your issue. They will reply back to you as needed. Thanks for reaching out to me. Appreciate it.
Hi Alvin;
I added to my positions in UNH this afternoon as put premiums were excellent. Next week I expect a bounce back. If that fails to happen, I plan to roll out my position a couple of weeks and possibly down $10.00. I am expecting the stock will recover from the tragic shooting.
I can see what tech support can do but it’s hard when the sale ends because it has to be done manually. I will get back to you by email after speaking with tech support.
I’ll take a look for you. I assume you are in the USA and using IB there.
Sorry I didn’t see your question on Nov 4 but I closed many trades ahead of the elections. Most of those I discussed when placing trades. I also tried to place trades with expiry dates before the election. If after the election expiry, I tried to sell a lot lower put strikes in most socks to try to build some protection. While in hindsight it was not needed, it is always prudent to setup trades with enough protection to try to withstand these types of major events. This is why I close short put trades in most stocks ahead of their earnings and then restart a position after earnings are released. Thanks for your question and sorry to have missed it.
However, if you want to own shares, then holding the short puts longer makes sense if that is your interest. Each trade often has its own exit strategy being employed depending on the movement after employment numbers are known.
Hi Rob;
It’s the other way around. I normally buy back the short side first.
Teddi
Looking at the September trade the cost for the put side was a Debit Spread of = $15.00
Cost = $7,500.00. As this is a debit spread the cost is easy to determine.The call side was a debit Spread of $12.00 with a cost = $14,150.00
As the trade unfolds, because these are debit spreads the cost is in basic terms the difference of the spread cost. There will be a few dollars here and there that change but for the most part the real concern is a lack of a move and the long side not earning enough to cover the cost of their respective sides.
Again in basic terms, if the SPY moved enough and placed the long side, either put or call into the money, even deeply, the short side loss would still be covered by the long side. The spread determines the extent of the profit and helps control a loss should there be one.
I will attempt over the next couple of weeks to update a few of the recent trades done around the non-farm payroll numbers to show the handling of the trade. There are some already posted but I think they are back a couple of years. Most members ask for trade setups and not outcomes since they control their own trades once setup. As I only have so much time in a day to post, I focus on trade ideas and their setups which is what members have advised they want as the priority.
Thanks Elvis for your best wishes.
Hi and thanks for your question.
For the SPY ETF trades ahead of the Fed and for non-farm payrolls, I keep the short positions in place until the longs are gone.
Sorry but not sure which you are referencing. Apologies. Any chance of linking the article you read.
I’m sure by now you saw they are paying a $3 billion fine. LOL. That definitely impacted the stock and will for a few days.
Thanks for your question. Are you referencing the SPY ETF Hedge Portfolio?
I base the price on an estimate from the prior few days but check the prices at the start of the day.
Sorry to have missed this. Rolling the position out a couple of weeks to Oct 11 expiry and down to $277.50 or if you want to sell a few more put contracts, then the $275 put strike would be an idea.
Earnings are Oct 22, so I would try to roll into an expiry before then and then if needed, roll again, but if rolling after earnings I would go out two or even three weeks after earnings. That would be Nov 8 or Nov 15 expiry.If you took assignment of shares, selling slightly in-the-money covered calls would be worthwhile.
If you took shares assignment but do not want to hold shares at all, then reverse the trade back to a Put Selling trade by selling the shares and sell the $277.50 put strike to cover any loss and then roll the trade forward while waiting for the stock to rally back to $280. Stay ahead of expiry dates and roll early to avoid being assigned shares again.
I refer to the Put Options Selling Tool Analysis and look at the various ratings. As well I look at the moving averages and try to stay at or below the 100 or 200 day moving averages. The 200 day is often hard to sell put options against as it can be quite a way below where a stock is trading.
Thanks for your questions. It’s hard to remember back to Sep 6. I will try to write-up some of the trades more often but did you read through these articles:
https://www.fullyinformed.com/members/category/spy-etf-hedge-strategy-learning/
There are a lot of articles that answer your questions in there.
On your question of exiting, I often will sell out a few options at a time during a move but lately I have been so busy with a lot of new members and assisting as many have not sold put options for income before, that I find I just sell out in small groups at a time, such as 10 or 5 each time.
I used to trade the SPY ETF Hedge by watching it daily but now with so many other trades and members to work with, I keep the SPX monitor on all the time and if I spot a trade coming up I jump in and then try to watch for 10 or 15 minutes to exit out. It’s not so much the strategy as it is seeing the opportunity and taking it for both entering and exiting each trade. On some days when there is larger movement in the markets, I try to take more time to follow the SPX for the SPY trades but on days when the index is moving more sideways or with smaller swings in the market, I tend to not watch as much but focus on other trades instead.
I like the SPY trades as they can generate a lot of income daily but it takes a lot of time and you have to be watching the SPX. Overall selling put options with the Put Options Selling Tool Analysis is super easy and I prefer that. I can usually make $2,000 to $5,000 a day selling put options which is comparable to the SPY ETF Hedge but with a lot less work and less monitoring positions throughout the day. There are a large number of members using the SPY ETF Hedge for doing trades at the opening of the day and 12:00 PM and again at 2:00 PM and 3:00 PM. We have found that’s when the SPX is often most volatile. Therefore doing 4 or 5 trades at most in a day in the SPY requires a lot less work and still are profitable.
New trades were done today (Aug 29 2024) after earnings yesterday, in the Walk That Profit Home to Momma Put Selling Strategy. You can see that the concept is to eventually own shares but use the profits made to pay for them rather than my own capital initially. The trade is up 84%. If by chance it there.
I’ll update the trade but it does not expire until Sep 20 which leaves lots of room for more movement and profits.
I think they will beat estimates. Remember this strategy’s final goal is to own shares but not until profits have been made to help pay for those shares.