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Thanks for your posting.
Your positions are too large is you do not want to own shares and especially if you do not have the capital to own t
You should be working on reducing the number of positions you are holding.
For example, focus on trades that are going to not cost much to close out. The 10 citigroup. Remember that if you are assigned shares you can sell them and immediately return to setting up put options again. Look for bounces to close trades for either a profit or for limited losses.
Even closing a few and then going to the leaps can help but it needs to be based on a clear picture of available capital to actually hold shares and sell covered calls.
When I looked last the Citigroup puts would cost $4.00 to close. A total cost of $4000 less the $3.00 or $3000 you made. To recover the $1000 loss, you can sell 2 puts for Jan 2026 at $50, if you are willing to own 200 shares.
This reduces your capital commitment from $60,000 to $10,000 without a loss.The trade this morning in Merck after earnings were released should cover your questions.
https://www.fullyinformed.com/members/goal-of-80-return-for-merck-stock-mrk-trade-ahead-of-earnings-strategy-setup-for-mon-jul-29-2024/Crowdstrike Stock (CRWD) will bounce around and I think eventually work itself out. I would take your time and roll-down when opportunities present itself. There is no rush on roll-downs but if the goal is to never own shares, wait for a bounce, roll lower and fpcus on making profits on each roll.
If you want to buy some protection stay short-term, such as a week or two out and pay as little as possible.
Work from the Investing Strategy Notes each morning to setup your trades. Often I am busy intraday with other trades including closing some and answering a ton of email daily. I post trades as time permits which for some trades is after the close.
This trade should work well today as Netflix shot higher. Even if you decided to roll early, you should be able to close your trade and lock in profits at some point shortly.
I would wait to see if the stock drops. Since tomorrow is expiry, you could start the day before the open offering an amount to close the trade. That way if the stock spikes at the open you may get taken out. I think if the stock falls on Friday you should have an opportunity to roll-down but at $605 you are at a decent level.
I’m sorry I missed your post. When I place trades I place a stop-loss which is usually double what I earned. On Jul 10 I was stopped out of the trade at $1.65.
What are you presently holding and I can offer some ideas.
I agree. As we saw, the initial reaction was lower but now the stock is starting to move higher. That’s the beauty of this strategy. The trade is out a month which often allows enough time to profit from both sides of the trade.
The easiest way to look at this “schedule” is to setup the trade that when it reaches a specific percentage then you wait to see if it continues to rise or falls back.
Basically use the percentages as guides for closing the trade early.
If you have secured 50% of the profit, then 75%, then 80% but then the stock changes direction and suddenly the put premium begins to climb and costs more to close. If the profit falls back to 75% for example, I buy back the put option and lock in my profit.
You can use any set of percentages or use actual values. For example you sell a put for $1.00 and it falls to 15 cents to close but the next day it jumps to 25 cents to close, I buy it back and end the trade. I don’t wait to see what the stock might do next. I close the trade, take the profit and open another trade with my freed up capital.
A good rule is to always close any trade that has earned 90% or more of the original put premium received when the put option was sold. That means if you earned $1.00 when you sold a put option and it falls to 10 cents, buy it back and end the risk of the trade changing direction. I have seen many investors hold a trade that fell to 10 cents only to see the stock plunge and the put sold suddenly is $3.00 or $4.00 to close. Stocks are volatile and closing early and locking away profits is an excellent way to keep profits pouring in and reduce the risk to the capital being used in the trade.
Normally a support level has to be tested a few times by investors before it becomes support. I would say $190 is not support yet.
To my knowledge you can only do covered calls or option buying. You cannot short options or stocks as far as I know. I have not looked into RESP in years so the rules may have changed,
The trade table for the Hedge trades are on each day. Notes on the strategy are below. Trade notes show entry time and exit time. I used to show prices and do once in a while but investors wanted entry and exit points and it’s a lot of work to do up prices, returns, etc etc. I therefore focus more on showing entry and exit times so investors can learn how to trade the SPY intraday.
Hi and thanks for your question. You can open a new membership for him. You can create the account, give it a username and password, make the payment and then present it to him. If he decides he wants to stay but wants a different username, he or you can let us know and a new name will be created and setup. It would be great to meet your son in the forums!
It depends on the stock. With those I am not interested in owning I use a stop-loss.
Thanks for your question. In a number of articles you will see content regarding stop-loss use with selling options. The retiring easy portfolio has a stop-loss section in each trade. Here is from the June 4 2024 trade:
Consider a Stop-Loss
For investors who would not own shares or not want to roll a position forward, a stop-loss is an idea to consider in a market sell-off. This strategy sets up how much of a loss an investor is willing to take before getting out. For example, if a put contract was sold for $1.00 an investor might be willing to take a 50% loss. The stop-loss would therefore be set at $1.50. If the put contract reaches $1.50 then the investor is “stopped” out, locking in a loss but also limiting the potential for further losses if the stock continued to fall further.
Call your broker. The $182.50 is trading for Jun 28 expiry.
In a rising market naked puts are fine if you plan to own the shares should the stock fall and you are assigned.
Credit put spreads provide a stronger level of protection and free up more capital for investing. Overall I would recommend credit put spreads over naked puts but it comes down to your final goal.
I never hold positions over earnings unless I am willing to own shares. I have no idea as to the quantity of positions you have but if this was my trade and I did not ever want shares I would be using the higher volatility ahead of earnings to roll out and lower and placing a stop-loss.
Everyone has a different outlook. I am not sure why you are in at $170 for this position but if I wanted to eventually own some shares then I would just keep rolling. If I did not ever want shares I would have used a stop-loss and got out of the trade prior.
Hope this helps.
I leave the tax situation to my accountant but he advises that both US and Canada have a tax treaty with many nations to avoid double taxation. Netherlands appears to be one of them but always check with your tax specialist first.
With markets rising ARM reached $98 today before closing at $93.11. You may find it back above $100 shortly. Just never know when it comes to these high volatility tech stocks.
I added in comments regarding ARM stock in the morning Investing Strategy Notes today.
https://www.fullyinformed.com/members/morning-investing-strategy-notes-for-mon-apr-22-2024/Hope this helps. Any further questions please post them!
I would roll out. I will take a look at premiums later today. If you bought long puts I would be selling those to bring in more profits before April 26 while they still have premiums. It really depends on what put strikes you bought to secure your credit put spreads. The plunges in many tech stocks has become so deep that normally we should expect rebounds or bounces that are tradable. ARM, I believe, will be around for years to come.
Sorry to have missed this before expiry but as explained, my plan was always to roll-down. I think $140 to may be $120 would be a bottom is any major sell-off or one day plunge in the correction. The stock is down deep already. Each move lower becomes more attractive. I never like a loss which is why I prefer to roll-down and keep bringing in more profits. All my AMD trades for Apr 19 and Apr 26 expiry periods have been updated.
It depends on your outlook. I don’t think we are going to enter a large correction until May, June or the summer. However if you do not like to roll a position down, then you want to:
a) watch for a point where the trade can be closed and part of the short put side profits taken. Even earning 25 cents on each contract is still a decent profit. Then hold the long puts to see if the IWM ETF falls and perhaps profit from that as well.b) set a stop-loss of whatever loss you are willing to take whether double the profit or whatever you feel is reasonable.
Thanks for your reply; Not sure what you mean with more than 1 reverse iron condor. An iron condor means both side of the trade are covered.
The trade was setup with 10 debit spreads on the call side and 10 on the call side. This is typical of all my trades. Some are 5 debit spreads on each side but most are 10. If you not doing both sides of the trade then it is not a reverse iron condor. Both sides of the trade are setup prior to the earnings being released.
Then it is a matter of watching the stock after earnings to determine which side to hold and which side to close over the coming days to expiry. Stocks move around a lot and these types of trades do well when held for a period of time. You can see that in the Netflix trade.
If you are planning on setting up just one debit spread on the put side and one on the call side, I might suggest setting up two. I definitely suggest paper trading to learn the strategy and learn to maximize the profit. Hope this helps out.