How to trade options in a volatile market?

Opened spy position yesterday $SPDR S&P 500 ETF (SPY.US)$ And qqq $Invesco QQQ Trust (QQQ.US)$ spread bull put on, expiring on September 29, with respective near-term strike prices of 432 and 350.

Below is my trading plan:

If two weeks pass without reaching the strike price, and if the large cap market remains flat, then I will roll over to the end of October. If technology stocks and large caps rise, I may have to cut my losses and stop out, as the time cost involved in such trades may be unacceptable to me.

If the strike price is reached at any time within the next two weeks, I will immediately close the position, without considering taking the short side. Given that index options are involved, unless a black swan event occurs, expecting a continuous downward trend is not realistic, and there is a high risk of adding to losing positions.

Because I have been selling covered calls, buying low and selling high to reduce costs, Amzn $Amazon (AMZN.US)$ Both DIS and are preparing to buy out-of-the-money call options. If it doesn't work out, then these index put options will start to come into play, and in the end, they might even make a profit. $Disney (DIS.US)$ The downside this week has not caused me any losses, all the profits have already been secured, and the unrealized losses seem insignificant.

upst $Upstart (UPST.US)$ has unrealized losses in its cc, but if the stock price continues to trade sideways near 33 next week, I can capture a significant amount of time value and turn the unrealized losses into unrealized gains.

Regarding $Tesla (TSLA.US)$, I believe there will be a rebound in the short term, but the medium to long term trend is still downward. The bottom could be below 200, so if the position is too large, it is best to stop loss early. If you don't want to sell the stocks, the best way is to sell out-of-the-money (OTM) covered calls expiring in 2 weeks and buy at-the-money (ATM) puts expiring at the same time, which is equivalent to betting on a sharp rise with the option premium of the put-call. If the probability of an upward movement is considered higher than a downward movement, then buy a protective put and do not sell call options. If the stock price rises, everything will be fine, but if it falls, exercise the put option and sell the stocks. If you only want to sell at a high price, then sell a deep in-the-money (ITM) call, so you can also collect the premium while selling the stocks.

Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more

See Original

Report

65K Views

Comment

Silverbat : Hello! Excuse me, it is said that spread bulls are all used for bullishness. Why do you say, “If technology stocks and the general market rise, they may have to accept loss and stop loss”? Please explain it to me. thanks

Report
Reply

Cancel Reply
Silverbat : There is another problem with option operations. What strategies can protect OTM's call?

Report
Reply

Cancel Reply
TridentRodent OP Silverbat : Selling more OTM calls or buying ATM puts reduces profit and reduces risk. However, OTM Call itself is highly leveraged; what you are fighting for is an unlimited profit.
So my suggestions are:
1. Don't bet on targets you aren't sure about. Even if you make 10 times your profit in a single run, it may take 20 times before you can open it; it's always the casino that wins.
2. OTM Call is betting on the rise of Delta and Vega. Buying those that expire far away makes theta smaller. I'll buy it for at least two months and walk away when there are about three weeks left.
3. If you buy OTM Call randomly, the risk expectations are higher than buying a random ticket. So small positions small positions small positions

Report
Reply

Cancel Reply
TridentRodent OP Silverbat : The direction is not the same. Buying big and selling small is bearish; buying small and selling big is bullish.

Report
Reply

Cancel Reply

TridentRodent

记录自己的投资。不构成投资建议。

101

Followers

Following

407

Visitors