How to trade options in a volatile market?
I opened a spy position yesterday $SPDR S&P 500 ETF(SPY.US$ and QQQ $Invesco QQQ Trust(QQQ.US$ The spread bull put expires on September 29, and the near-end exercise rights prices are 432 and 350, respectively.
Here's my trading plan:
If the exercise price is not reached after two weeks, if the general market trend is sideways, then it will roll to the end of October; if technology stocks and the general market rise, they may have to accept the stop loss. The time costs associated with left-hand trading are not necessarily acceptable to me.
If the exercise price is reached at any time within two weeks, I will immediately close my position, and the short side will not consider taking over shares. Since index options are used, in the absence of black swans, it is unrealistic to want to go all the way down; there is a high risk of floating profit and increasing positions.
Since it has been selling covered calls, high sales and low absorption reduce costs, Amzn $Amazon(AMZN.US$ and DIS $Disney(DIS.US$ This week's downturn hasn't caused me any loss. All of my profits have already been reduced to safety, and my losses don't seem to matter.
upst $Upstart(UPST.US$ CC has floating losses, but if the stock price is still trading sideways around 33 until next week, it can eat quite a bit of time value, and the losses will also become profitable.
For $Tesla(TSLA.US$I think there will be a rebound in the short term; the medium to long term will still be a downward trend. The bottom may fall below 200. If the position is too large, you still have to stop loss as soon as possible. If you don't want to sell stocks, the best way is to sell OTM covered calls that expire in 2 weeks, and buy ATM puts that expire at the same time. This is equivalent to using Put-Call's option money to compete for a sharp rise. If you think the probability of an increase is greater than a fall, then buy a quick put, don't sell calls; if the stock price rises, everything is fine; if it falls, exercise your right to sell the goods. If you want to ship at a high price, then sell a Deep Itm Call, and you can also eat premium money while shipping.
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Silverbat : Hello! Excuse me, according to reports that Spread Bull puts are used for bullishness. Why are you saying, “If technology stocks and the market go up, you may have to accept a loss stop loss”? Please explain it to me. thanks
Silverbat : There is another problem with option operations. What strategies can protect OTM's call?
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
TridentRodent OP Silverbat : The direction is not the same. Buying big and selling small is bearish; buying small and selling big is bullish.