/biz/ - Business & Finance

>>19919918
>THETA GANG

>>19919918
>If you still do long options you're gay.
retarded here.
could you explain in simple words why?

What the fuck is “taking” options? Do you mean writing options? You realize there are other ways to play options than writing them, yes?

>>19919918
Get this actual finance bullshit out of here, this board is for shitcoin pumping

>>19919918
Could you explain this to me like I know absolutely nothing about trading? Asking for a friend

>>19920634
Forget about the unlimited risk.
Short btc now.

>>19920491
time decay

>>19920545
long / short.
your gay terminology shows you don't trade.
your trading platform should have a red button (short) and a blue button (long).
you take a position when you enter a trade

>not writing 1000 TSLA @$420 put by EOY in November of last year.

Wuss.

>>19919918
This is why I go long VIX futures. Easiest way to get positive vega ever

>>19920809

Did you just learn about options a week ago and you’ve been spending your time between /biz/ and that faggot-ass wallstreetbets board?

You don’t “take” options. That’s not an expression anyone uses. You’re talking about writing (shorting) puts. You can also buy puts and flip them later, so your strategies differ completely based on what type of trade you’re doing.

If you’re encouraging people to write naked puts, you’re just retarded, especially now.

>>19920857
While dweebs are going short options in a feeble attempt to make an income, vix future holders are literally getting paid a massive negative roll yield to stay hedged

>>19920634
its amazing we on a trading and business forum yet the vast majority of people here are illiterate to its basic terminology.
crypto was a mistake.

>>19920917
Also means you can sell SPX LEAP straddles, go long on vix futures to cancel out your IV exposure, and make relatively easy money as long as you don't forget to hedge your deltas.

To all the retards in this thread: OP is a troll, do NOT FUCKING SELL OPTIONS if you don’t sincerely understand what you’re doing. You will get crushed sooner or later in a way that literally can’t happen when buying an option. When you sell an option you are ON THE HOOK.

>>19921044
^THIS^

If you sell puts to accumulate shares rather than speculate on margin, are you doing it right? Is there any other downside as long as they don't exercise?
Say I have stock X currently at 22 and I want to set my price point at 20. I have 2k cash on hand (well I guess minus the premium on one put contract).
What if the put I sold is ITM on expiry but they don't exercise? I've only been long options so far and have managed theta decently well, selling puts to accumulate and then covered calls to set a sell point seems fairly conservative.

Minimal upside with 100% of the downside of actually owning the stock. On top of that you get fucked by market makers and massive bid-ask spreads unless you trade something extremely popular like big index funds.

>>19921427
This. Just compare the returns of CBOE's PUT index to the returns of the S&P 500 if you want to see how well selling options work.

Selling straddles while delta hedging (incidentally the 3x leveraged ETF's are very useful for delta hedging because they have positive gamma) works better, but has insane tail risk. Look at SVXY's chart.

>he just found out about writing options
Good way to end up in bankruptcy, at least do a credit spread, covered call or cash-secured put if you're going to start writing options.
Thankfully (for your sake) brokers don't generally let newbies write naked options.
Learn about fat tail risk

>>19921621
Ok so basically if writing options simply to juice share accumulation and set price targets (i.e. no margin and no speculating with nakeds) they are a conservative strategy. Correct?

>>19921749
Yes, that's a good (and fairly conservative, even Buffet does it) strategy if you have a set price level you're thinking about buying shares at.
It still exposes you to fat tail risk, but if you write puts for companies which don't have as much systemic risk, you can minimize that issue.

>>19921487
More like look at XIV. The most important thing for ROI, regardless of your time outlook is maximum drawdown. Maximum drawdown on a long option is 0, and maximum on a short is exponentially damaging especially with margin.
Options/derivatives are a very ugly and inconsistent way of achieving leverage. Adopting a consistent strategy with just the standard Reg T margin account will pay off better than any leveraged ETF or option strategy in the long run.

>>19921863
Right. Long Vol hedge + stocks is a much more consistent way to make money than trying to sell options.

Alternatively, doing something similar to the SWAN etf, which literally just goes 90% T-bonds and 10% high-delta LEAPs at whichever strike price gives best delta when rebalancing.

>>19921044
double this. OP is retard confirmed

>>19921044
Selling options is risky because there is unlimited downside. At least when you are buying options the most you can lose is your premium. Buying is a right not an obligation.

>>19922037
So we should be longing 3x leveraged etfs? Explain to me I like I'm the retard I am

>>19921348
I think most brokerages will automatically sell the ITM puts if they are not exercised, or they exercise them for you.

>>19919918
Don't explain anything to the new faggots, they're going to /wsb/ and walk in front of a train, let them study the fucking market lazy fucks

OP wants more necks for the rope god. based OP.

>>19922261
Kek

Here's a neat trick for all you retards that want infinite gains:

sell puts and use that credit to buy calls. Also known as "synthetic stock". 110 IQ play

Should I always be hedging?
Recently I took out a short position expecting a significant pull back before an eventual leg up heading into a trump 2nd term.
Allocated as follows:
5% in spxs for short term.
10% in spy oct 303 put for medium term. ITM already.
5% selling spy at 310.
Rest of worth is 40% cash, 30% long various stocks/funds and 10% PM.

Should I hedge any of my 20% short?
I am fairly confidant that markets will retest lows, if not lows something close, before elections.

>>19922124
unlimited downside when you only sell naked calls. Call credit spreads solve this issue

>>19922356
You should always be hedging. Look at your beta weighting against SPY or QQQ, and it should be relatively neutral. I hedge with puts in SVXY or call credit spreads on IWM if my delta is too high. You could also pairs trade based on correlation if you want to hedge.

>>19922407
I truly have no idea what you just said.

>>19919918
>forget about unlimited risks
pic of the -800k suicide from the featherhead.

>>19922324
based suicide play

>>19922430
He said you shouldn't be doing what you think you'r doing, you'll end up doing a fucking flip from a 20 store building

>>19922407
Take an equal amount of money from cash and buy calls?

>>19922481
My short position is limited in scope to how much I bought. I am comfortable losing it, all of it even, if it goes the complete other way.

>>19920545
>>19920809

bet this dude says taking weed

>>19922430
see the change in delta based on weighting against QQQ, for example. If your platform doesn't provide beta weighting, switch to ToS or tastyworks

i've been selling cash covered short puts on GE for 2 months now w/ trump bux and just now got assigned at 7.50 last friday. shit sucks but at least i can sell covered calls on it until it goes back up.