#MarketTiming looking for a swing leg up…UPDATED.

This is a results update for this post yesterday:

#MarketTiming – looking for a swing leg up…

#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.


$TSLA – #DayTrading #ShortStrangles for a steady 15% weekly gain

Despite being stopped out twice during the five days last week, TSLA short strangles once again had a double-digit gain, 15%.

This strategy since introduced here six weeks ago, in early February, on TSLA, a volatile stock with liquid weekly options, has had a double-digit return every week.

The cumulative gain is now 76% for the six weeks on a maximum margin requirement (as calculated by the CBOE) of $20,000 per contract.

The values on the table below for last week’s short-strangle trades are per contract.

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

(Click on the table for a larger view)

$TSLA – Day trading short strangles for 12% weekly gain

Choppy week in TSLA short strangles but still netted a 12% gain.

In the five days of the week the initial strangles were stopped out every day except Monday and twice on Friday, forcing a rewrite of the strikes each time.

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

(Click on the table below for a larger view)

#ShortStrangles on #Stocks – day trading the weekly #options

Interesting week last week in the strategy to day trade short strangles on various stocks.

The basic idea with this strategy is limit risk while taking advantage of daily time decay on the calls and puts expiring on each Friday.

The trades are taken 30 minutes into each day and closed at the close. The protective stop is a 5-minute close either above the upper strike or below the lower strike. If a protective stop is hit then both sides are closes on the stop.

Since the opposite strike hedges the losing strike, a stop at that point is usually a breakeven or small loss for the trade, and sometimes, depending how long during the day the trade has run, yields a small profit. When the stop is hit and the trade closed, if there is a enough time left in the day, the strangle can be rewritten and reentered at the next strike levels.

Last week the short strangles were on TSLA, NFLX and SHOP. See the table below for the day-by-day trading.

TSLA stopped out on Thursday for a 3.6% loss on the margin requirement (see the table) but the reentry has a 2% gain before the end of the day, mitigating the initial loss.”

What is obvious is how steady the week was for logging profits. Since this is day trading, the trades are using roughly the same cash margin over and over each day. As a result, although the daily gains for options trading may be relatively small, the accumulated profits for the week can have a notable return.

Margin requirements can vary day by day, strike by strike and, I supposed, broker by broker. Those listed here are calculated on the margin calculator at the CBOE. For presentation purposes, I’ve calculated the dollar amount on these trades as per each contract.

The short TSLA strangles gained 18.79% for the week, SHOP gained 6.52% and NFLX gained 11.03%. See the green blocks on the table to those results.

In the last green block, I averaged the margins across the week and across the three stocks and came up with the $11,857 number. The highest requirement was the $20K per contract on TSLA at the beginning of the week (that would also be the minimum required to trade this for the week).

The total profit for the trades was $4,759 for the week, a yield of 10% on the three strangles combined.

That’s what I meant when I said above it can have a “notable return.”

(click on the table for a larger view)

$TSLA – #DayTrading options on stocks for less risk and more gain.

TSLA announced earnings on yesterday’s close and gaped up 50 dollars a share today, closing finally at 640, up 63 dollars.

And to think not that long ago the company and its founder, Elon Musk, was the mockery of the market.

After cruising most of last year below 300 a share, it broke above 300 on October 25th and hasn’t looked back.

I wrote this back in August of 2017, giving a long term heads up on the stock:

Is TSLA the best long term investment since AAPL?

But this post is not about that.
This is about options trading. And more specifically day trading stock options.

I wrote about this strategy for the first time in August of last year but primarily in this post in November:

#ShortStrangles on #Stocks – stealing money weekly in cash

That post was about holding the weekly options to week’s end and did not yet consider day trading. Still, as that post indicated there was a 5.6% gain on the margin requirement for the stocks that week. If consistent each week, that would add up to something for the year.

But could it be consistent when the risk on a short strangle strategy is unlimited while the gain is locked in on the credit received? Probably not. Take TSLA today – that 50-point gap on the open would have killed any short strangle, and it would have been even more devastating by the end of the day.

So day trading…

See the chart panel below. The top row of charts in the panel are last week’s four days (Tuesday through Friday) since the holiday. The lower row is this week through today (Thursday).

In the last eight days, day-trading short strangles in TSLA has gained 16.7% against the margin required each day. The margin fluctuates a bit each day depending on the call strikes and puts strikes executed but since the strategy is a day trade on the weekly options the margin remains roughly the same each day.

On the charts the negative numbers in the white flags on the lower right are actually the pluses on the shorts per contract, and the positive numbers are negatives.

For example, Tuesday (the chart second from left on the lower row) the loss was $365 per contract while today (the last chart on the right on the lower row) the gain was $660 per contract. All total, those profits equal $2,012 per contract over the eight days, give or take a bit for commissions and slippage. That’s about 16.7% against an approximate $12K margin requirement day in and day out. With the risk limited to a single day (with stops), there is likely much more consistency in the trades.

I’ve been by a lot of pundits on the internet, so-call options experts parading the common wisdom, day trading on stocks can’t be done (to say nothing about SPY which I’ve written about many times now).

And of course, it takes persistence and discipline and experience to day trade options on anything but in at least this case with stocks, the common wisdom is, again, suspect.

P.S. One final note on TSLA today.The trade was made after its earnings were in the market. Note on the chart for today (lower row, far right) how flat the price action was for the rest of the day as time decay racked up an approximate 5.5% against margin, a 54% gain on the actual money, per contract, put into the trade.

(Click on the chart panel for a larger view)

$SPY #Options – $DayTrading Calls 1/28

Haven’t posted the day trades in SPY calls and puts for quite a while but the strategy still holds – tight spreads, high liquidity, less time decay.

The trades are always the nearest expiration (Monday, Wednesday, Friday), the closest in-the-money (ITM) or at-the-money (ATM) strikes, and never hold overnight (it’s always a day trade). They are posted on Twitter to get the time stamps.

Today was a good day, and a good day to drop this post here.


(A note on the “added note” in this tweet for the reentry later in the day – it was up 16% at one time but pulled back and broke even at the close)





$SPY #Options – Day trading calls 12/6




(Click on chart for a larger view)

$SPY #OPTIONS – Day trading puts – 12/02

A fast and furious drop-down day…





$SPY #OPTIONS – Day trading calls – 11/26

Truly a grinding day as one follower on Twitter so aptly noted, but at least managed to escape with a small profit.