#DayTrading $SPY #Options – simplifying today’s put buy and sell for a 237% gain

The 315 in-the-money put, expiring today, netted 237% on the day-trade buy signal near the SPY open with a sell of half at up 215% and the second half at up 260%. Had the trade been held to the close, it would still have netted approximately 220%.

See the tweets (for time stamps) and the chart below:

THE STRATEGY

There are so many options strategies in the stock market the head spins – a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen – the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game? Like everyone in options trading says?

For day traders it doesn’t have to be. If the trader is persistent, discipline and experience, it almost never is.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for scalping on any time frame intraday but that, as they say, is another story.

Again, the key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable taking.

Today, again, was a spectacular day for the strategy.

(click on the chart for a larger view)

#DayTrading $SPY #Options – Buying Calls and Puts

The contents of this blog entry was first posted here a year or so ago about buying SPY calls and puts for day trades.

I am copying the contents of that post here in order make it easier for me to find. Plus, the current volatility in the market makes this strategy better than ever.

There are so many options strategies in the stock market the head spins – a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

But buying options…

Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen – the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game, like everyone in options trading says?

For day traders it doesn’t have to be. If the trader is persistent, discipline and experience, it almost never is.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for scalping on any time frame intraday.

Again, I must stress the key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable taking.

I have included the chart below from today as an example – the SPY 278 in-the-money call, expiring Friday, up 106% to close the day trade. (I will probably edit this out of this post, along with the chart, as time goes by.)

(Click on the chart for a larger view)

#ShortStrangles – $TSLA marching through March for a 62% gain…

Day trading weekly short strangles on TSLA, even as the market swung wildly both up and down, has turned out a steady 62% gain for March.

The total cash gain per options contract for the month was $10,969, using a maximum margin of just under $18k. Every week had a double-digit gain.

See the green-colored weekly totals and the final yellow-colored cumulative total for the month on the table below.

Each short strangle had a hard %200 stop loss. If stopped out the strangle is rewritten for new strikes calculated on the stop’s price level. Each trade is closed at the market at the end of the day to eliminate overnight risk.

The same short strangle strategy can be applied to any volatile stock with liquid weekly options – TSLA here, but other prospective stocks would include AAPL, NVDA, BA, ROKU, GS, FB, WYNN and NFLX. No doubt others from time to time depending on market conditions and an individual stock’s story (for instance, BA of late).

The reference for this strategy is this link: $TSLA – Day trading short strangles for simplicity’s sake.

There are many complicated options strategies but this blog strives to apply the idea that simple is best, or at least better…

Remember this information is presented here, and throughout this blog, for entertainment purposes and as my personal journal for trading and tracking strategies, and should not in any way be construed as investment advice.

(CLICK ON THE TABLE FOR A LARGER VIEW)

$SPY #options – Day trading calls in the 10/04 market bounce

This trade was based on this post:

#Options – Buying calls and puts

And this context:

$SPY #Options – Day trading calls for 10/3 bounce…

All Twitter timestamps are Pacific Time.

FIRST TRADE:

SECOND TRADE:

CLOSE OF DAY:

$SPY #Options – Day trading calls for 10/3 bounce…

This trade was based on this post:

#Options – Buying calls and puts

And this context:

#MarketTiming – okay, we are close to a bounce…

All Twitter timestamps are Pacific Time.

ENTRY:

FIRST HALF

CLOSE

(CLICK ON THE CHART FOR A LARGER VIEW)

$SPY #Options – Day trade for 30% gain

#Options – Buying calls and puts

There are so many options strategies in the stock market the head spins – a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

But buying options… Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen – the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game?

Doesn’t have to be. Not for day traders.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for scalping on any time frame intraday.

The key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable with taking.

$SPY – Friday’s calls at the end of the bounce…

Friday’s 285 calls immediately vaulted as high as a 42% gain but wound down for the rest of day, hitting a breakeven stop along the way, and finishing down 52%.

If one studies the day’s bounce from the opening gap down and final reversal at the close (see final chart below), it’s apparent there was not much to do to capture some of the profit on the day before it was all gone on the stop loss. The bearish gap at the open might have given a hint to fast and nimble traders three days was all this bounce would have. Of note, it’s evident how important a stop is to avoid letting a profit turn into an outright loss.

Suspect Friday’s price action is a sign this little three day bounce has reversed and there will be downside next week, but we’ll have to see Monday.

There were no puts to buy on the reversal day since after the early run up SPY never quite fell back through its open.

(click on the chart for the full twitter thread)

(Click on the chart for a larger view)

$SPY – Long Friday calls on bounce day three…

The bounce continued Thursday…

(Click on the chart for a view of the final tweet)

(Click on the chart for a view of the initial tweet)

$SPY #Options – Puts on a put day….

This Tweet was made at the time today’s 284 put (282 on the chart is a typo) hit a 100% profit for the day.

The day-trading strategy, which I call “BUY THE YELLOW, SELL THE BLUE,” topped out up 144%. and even with the choppiness at the end of the day managed to register a 76% gain (see the final chart below).

(click on the chart for a full view of the Tweet)

(click on the chart for a larger view)