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When should we get greedy?

Investment discussion for beginners. Why you should invest your money, get help getting started
redsturgeon
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Re: When should we get greedy?

#321081

Postby redsturgeon » June 24th, 2020, 1:56 pm

redsturgeon wrote:
GoSeigen wrote:
redsturgeon wrote:Last week for the first time in my life I went short on the FTSE100 with a 2x short ETF. I am watching it closely but it seems to be working so far.


Hopefully you took the chance to get out in the recent 7-8% drop, load up again later.


Personally I'd begin this sort of trade with about 0.3% of my cash, if I wanted to end up with 3% exposure and leg in over about five trades, though 3% is maybe okay if you can promise yourself not to buy any more. It's a real widowmaker, this one.

Here's the maths: You buy £100 of FTSE double-short ETF when the FTSE costs 100. First day FTSE goes up 10%. It's now worth 110, but you just lost 20%, so your ETF is worth £80. Next day market dives by 9%. It's back to 100. Your ETF rises 2x9%=18%. Your ETF is worth 1.18*80 which is 94.4.

So in two days the FTSE has not changed its value but your ETF is down more than 5%. That's not good. Now obviously, the moves are not going to be so big each day but 1. after many little moves you will as surely lose money and 2. given the market is so volatile those losses will be much larger than they were back in January/February, say.


About the only thing that will save you is a near-term violent fall in which you close your position. Then you might get your money back or even a bit more. But without the golden timing this trade is bleak at the moment.



If you want a short punt, I think short futures look a much better bet. But I prefer to get paid to just wait and see in these conditions (almost taking the other side of your trade). Future direction is hard to pick, IMO, and for the FTSE in particular the path of least resistance is up: some parts of it still look really bombed out.


GS


Thanks for this.

I am still in the money but my thinking is definitely aligned with yours.

I will not hold beyond this week.

John


You will be pleased to hear that I sold out today for a small profit after a 4% rise felt too good to refuse.

Obviously we can now all expect a major fall in the markets!

John

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Re: When should we get greedy?

#322085

Postby TheMotorcycleBoy » June 27th, 2020, 3:36 pm

Personally, I don't do shorts. But if you listen to recent US news coverage online and youtube (e.g. MSNBC, CNN) they are talking about massive new cases of cv19. E.g. last week I think FL beat NY in the number of new cases in a day, and their country-wide daily new case curve has risen further than it's last peak in April.

https://www.worldometers.info/coronavirus/country/us

perhaps a sell off on monday?

Matt

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Re: When should we get greedy?

#322151

Postby GoSeigen » June 27th, 2020, 7:44 pm

redsturgeon wrote:
You will be pleased to hear that I sold out today for a small profit after a 4% rise felt too good to refuse.

Obviously we can now all expect a major fall in the markets!



I'm pleased for you John, not for me**. Well done for the profit. Whenever one trades there will be some sort of regret afterwards: if the market shoots up you'll wish you'd immediately bought a long tracker with the cash!

BTW, I thought your market call was fair enough, just the method of shorting was better for the executive yacht fund than your own pocket. :? You could replace with a standard short EFT like XUKS which doesn't suffer from the same defect and ironically enough will probably deliver a similar, maybe even better return with less precise timing needed (unless there's a crash imminently).

Finally, kudos for the ability to review your own trading decisions and adjust. That's a mark of a good investor.


GS
P.S. **But yes, it's nice to feel you might have helped someone, or at least that they thought you did!!

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Re: When should we get greedy?

#322624

Postby GoSeigen » June 29th, 2020, 7:06 pm

GoSeigen wrote:
GoSeigen wrote:
GoSeigen wrote:
Well, the S&P has strongly broken out of its range. FTSE is following the US skyward. The VIX has finally decided to drift back to normal (but still elevated) levels and the Put-Call ratio is strongly in favour of calls. My short straddles are under water for now, but the call leg of a long SEP straddle I bought right back in March is finally in profit (the put leg was closed out long ago).

This all has prompted me to take a first tentative short call writing just a few ATM (3150) Aug S&P calls. Will add if the market continues making new highs, but also will be looking to close the put legs of the short straddles to free up margin. No point doing it too soon though because their value is dropping rapidly.

GS


Having closed most of the put legs on my short straddles I started the week very heavily short (mostly Jun) calls with strikes all the way down to 2800. Today's falls are welcome as the Jun contracts will rapidly lose value and I can close them out or let them expire next Friday. 2825 or lower next Friday would be ideal...

Opened a long Dec straddle today as the vol curve inverted.

GS


Turns out 2825 was a fantasy. S&P opened at 3161 at expiration today so most of my short calls were in the money. I decided to roll them into short index futures given the high level of the S&P. That might be premature but I am elsewhere leveraged long UK and international stocks so happy to start hedging a bit. This is a directional call, the first time I've felt comfortable about it for some time. Depending what happens I may trade short straddles again. VIX is still pretty high.


GS


Wrote Jul S&P strangles today. I still can't call the direction here. Implied volatility remains very high. I'm long UK stocks, short US futures so don't really mind which way the market moves.

With a good downward move I'll look to close any Jul short calls, write puts or buy Mar 2021 straddles.
If an upward move will close Jul puts or write calls, maybe take profit on some long stock positions.
If sideways, will just get a steady stream of premium from the options, most positions are in profit now.


GS

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Re: When should we get greedy?

#323561

Postby zico » July 3rd, 2020, 4:55 pm

GoSeigen wrote:
GoSeigen wrote:
GoSeigen wrote:
Having closed most of the put legs on my short straddles I started the week very heavily short (mostly Jun) calls with strikes all the way down to 2800. Today's falls are welcome as the Jun contracts will rapidly lose value and I can close them out or let them expire next Friday. 2825 or lower next Friday would be ideal...

Opened a long Dec straddle today as the vol curve inverted.

GS


Turns out 2825 was a fantasy. S&P opened at 3161 at expiration today so most of my short calls were in the money. I decided to roll them into short index futures given the high level of the S&P. That might be premature but I am elsewhere leveraged long UK and international stocks so happy to start hedging a bit. This is a directional call, the first time I've felt comfortable about it for some time. Depending what happens I may trade short straddles again. VIX is still pretty high.


GS


Wrote Jul S&P strangles today. I still can't call the direction here. Implied volatility remains very high. I'm long UK stocks, short US futures so don't really mind which way the market moves.

With a good downward move I'll look to close any Jul short calls, write puts or buy Mar 2021 straddles.
If an upward move will close Jul puts or write calls, maybe take profit on some long stock positions.
If sideways, will just get a steady stream of premium from the options, most positions are in profit now.

GS


Grateful if you could explain your thinking here (and maybe some basic principles about option trading - I have traded in them many years ago, but it's always useful to get views on underlying principles.)

My understanding is that unlike most other stock market investments, options are simply a bet against other people in the market, and have no intrinsic value in themselves, but there are 3 ways to make (or lose!) money from them (and of course, various combinations of these factors).

A) Getting the direction right. So buying calls and then seeing the market go up.
B) Getting the volatility right, when others underestimate it. So buying calls and puts, and then seeing lots of wild see-sawing in the market, so making money on both.
C) Getting the timing right. So buying a short-dated call just before the market moves up.

If I've understood you right, you think the options market is underestimating the volatility of markets, so pretty much all calls/puts are underpriced - is that correct?

Also, unlike straightforward betting, is there something about options markets where perhaps big institutions are affecting the price in such a way that there are clear opportunities for small investors? (Defining "small investors" as <£100,000 trades!).
The kind of example I'm thinking of is where big investors are staying more or less fully invested, but hedging their options by buying puts.

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Re: When should we get greedy?

#323564

Postby dealtn » July 3rd, 2020, 4:59 pm

zico wrote:
My understanding is that unlike most other stock market investments, options are simply a bet against other people in the market, and have no intrinsic value in themselves, but there are 3 ways to make (or lose!) money from them (and of course, various combinations of these factors).

A) Getting the direction right. So buying calls and then seeing the market go up.
B) Getting the volatility right, when others underestimate it. So buying calls and puts, and then seeing lots of wild see-sawing in the market, so making money on both.
C) Getting the timing right. So buying a short-dated call just before the market moves up.



You missed out

D) Selling (or writing) options. Pocketing someone else's buy premium when their bet didn't work out. Good luck with potential limited upside, unlimited downside bets though!

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Re: When should we get greedy?

#323593

Postby GoSeigen » July 3rd, 2020, 7:21 pm

zico wrote:Grateful if you could explain your thinking here (and maybe some basic principles about option trading - I have traded in them many years ago, but it's always useful to get views on underlying principles.)

My understanding is that unlike most other stock market investments, options are simply a bet against other people in the market, and have no intrinsic value in themselves, but there are 3 ways to make (or lose!) money from them (and of course, various combinations of these factors).

A) Getting the direction right. So buying calls and then seeing the market go up.
B) Getting the volatility right, when others underestimate it. So buying calls and puts, and then seeing lots of wild see-sawing in the market, so making money on both.
C) Getting the timing right. So buying a short-dated call just before the market moves up.


Zico, I couldn't possibly do this subject justice in a single post. I did a very brief summary somewhere further up the thread but there is a huge amount of material online about options. What I'll do is just answer this part, in the context of the thread/OP about timing the recent crash and its aftermath.


If I've understood you right, you think the options market is underestimating the volatility of markets, so pretty much all calls/puts are underpriced - is that correct?

Also, unlike straightforward betting, is there something about options markets where perhaps big institutions are affecting the price in such a way that there are clear opportunities for small investors? (Defining "small investors" as <£100,000 trades!).
The kind of example I'm thinking of is where big investors are staying more or less fully invested, but hedging their options by buying puts.


I said pretty early on in the thread that I wasn't confident calling the market, and that trading options was an alternative that I would try and document. The reason is that options allow a variety of very flexible trading strategies which are not biased to the upside or the downside: IOW, a similar outcome occurs whether the market moves up or down. Instead of direction, what you are looking for is either big moves or little moves in prices.

Now clearly these highly volatile markets are a good time to use the strategy because: if options buyers expect large moves they will pay a premium for options which can be harvested by option sellers. OTOH if the market does move fast and you have bought options, then they quickly move into the money and become profitable. The trick is to figure out when to be buying the options and when to be writing them. Obviously you want to but in advance of or during big moves. You want to write (sell) options most of the rest of the time.

I like this approach because it means one can be somewhat detached from the actual gyrations of the market. If you are directionally invested then seeing the market plunge is painful, and the temptation is to sell as the pain builds up. Conversely when a huge rally is happening, you wish you'd bought stock and then end up buying far into the rally or even before a further drop. Of course, people using options for directional bets are subject to the same psychology: they want to buy puts at the bottom and pay a premium to do so and buy calls or ignore puts near the top, not paying as much premium as at the bottoms, but also experiencing less price movement because markets are far less volatile near tops (tops are round, bottoms are sharp).

So what you're doing i seeing everyone panic around you, and then trading something somewhat orthogonal to the main action. You can focus on the strategy rather than get caught up in the emotion. Not only tht, calling fast moving markets is hard and it gives me something to do while waiting for things to calm down and resolve themselves.

Personally I don't believe in zero-sum trading. I believe every trade thoughtfully entered into contributes to price discovery and produces a better outcome for everyone. Even options are more useful to certain people at certain times, so if you can supply those options at a sensible price (for yourself) then you are helping those people. What is crucial to understand though is what you are aiming to achieve, both in terms of diversity/risk management and also the amount of profit that can realistically be extracted. This is true of all investment not just options. It's easy to be daft and try to get rich overnight when that is simply not realistic.

Having committed to trading options, there is a bit of learning to do, but it's not that hard. I don't trade options exclusively. They are a diversifier and I increase and decrease activity as market conditions change. When I said at the beginning that I couldn't call the market and so was shunning directional trades, that wasn't entirely true. When it looked to me like there was some indiscriminate selling happening, I did dip in and buy a fair amount of stock. But I did so knowing that I had option positions that would protect me by delivering profit if the markets fell much further. It gave a bit of peace of mind when there was panic all around.

GS

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Re: When should we get greedy?

#323597

Postby Lootman » July 3rd, 2020, 7:37 pm

dealtn wrote:You missed out

D) Selling (or writing) options. Pocketing someone else's buy premium when their bet didn't work out. Good luck with potential limited upside, unlimited downside bets though!

GoSeigen wrote:The trick is to figure out when to be buying the options and when to be writing them. Obviously you want to but in advance of or during big moves. You want to write (sell) options most of the rest of the time.

I like this approach because it means one can be somewhat detached from the actual gyrations of the market.

And there in essence you have the two sides of the debate. For one, selling premium is like picking up pennies in front of a steamroller. For the other, there is the slow, gradual accretion as option after option expires worthless and you keep the sales proceeds. And it is often cited that something like 90% of options contracts expire worthless.

I have to admit to having an aversion to buying premium. I'd much rather sell premium. If I do buy premium it is usually buying way in the money call options as a substitute for owning a share. The premium declines as the strike price moves further away from the market, and so it can be cheap to buy such options due to the lack of time decay.

So one strategy I have used is to buy a way in the money call option and then sell a call option that is maybe 10% out of the money. The time value of the closer strike short call will decline much more than the in the money long call.

Of course that doesn't help me if the share goes to zero. But at least if that happens I lose less than being in the share itself.

I also use options as an adjunct to my share positions. So if I sell a put it is because I am happy to own the share at that lower price. Similarly if I sell a call (never naked) I am happy to sell my position at that higher price.

In my experience you can make about 1% a month of incremental income over a share portfolio. As long as you accept the risk of having shares put to you or called away from you.

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Re: When should we get greedy?

#323696

Postby GoSeigen » July 4th, 2020, 12:25 pm

GoSeigen wrote:
Wrote Jul S&P strangles today. I still can't call the direction here. Implied volatility remains very high. I'm long UK stocks, short US futures so don't really mind which way the market moves.

With a good downward move I'll look to close any Jul short calls, write puts or buy Mar 2021 straddles.
If an upward move will close Jul puts or write calls, maybe take profit on some long stock positions.
If sideways, will just get a steady stream of premium from the options, most positions are in profit now.


I've done a VERY rough calculation of returns on my options positions since Feb 1, just before the crash began. My first post on this thread was 3 Mar. The returns are based on positions closed within that period, i.e. some of them had already been opened before 1 Feb and some remain open today and show a decent profit FWIW.

Profit as a proportion of nominal exposure (i.e. the value of underlying that would need to be delivered or received on expiration) was roughly 5% (12% annualised).

Profit as a proportion of margin required would be much higher of course, but I don't consider that a valid metric. Roughly half the profit came from a single long straddle position opened on 27 Feb when VIX was in the high 20s. This despite the fact that the call leg was 2.5 times larger than it should have been due to a fat finger error.


So this is not a get rich scheme, but I'm happy given my goal is to make 3%pa net net net. It paid most of the rent over the period and I slept well at night.


GS

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Re: When should we get greedy?

#323720

Postby dealtn » July 4th, 2020, 2:13 pm

Lootman wrote:
dealtn wrote:You missed out

D) Selling (or writing) options. Pocketing someone else's buy premium when their bet didn't work out. Good luck with potential limited upside, unlimited downside bets though!

GoSeigen wrote:The trick is to figure out when to be buying the options and when to be writing them. Obviously you want to but in advance of or during big moves. You want to write (sell) options most of the rest of the time.

I like this approach because it means one can be somewhat detached from the actual gyrations of the market.

And there in essence you have the two sides of the debate. For one, selling premium is like picking up pennies in front of a steamroller. For the other, there is the slow, gradual accretion as option after option expires worthless and you keep the sales proceeds.


You're right there are 2 sides to the coin, but you shouldn't assume which side I have a preference for, or even that I have a preference. In my work I would have been a seller for >90% of transactions. In personal usage it wouldn't be anywhere as high as that but I would see the options market as an insurance market for tail events, and my allegiance would be much more with the view of taking the premiums (and the risk) than buying the insurance. (And for similar reasons you post later in your post too).

I wouldn't expect an options novice to adopt such a preference though.

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Re: When should we get greedy?

#323729

Postby bluedonkey » July 4th, 2020, 3:19 pm

What does 3% net net net mean?

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Re: When should we get greedy?

#323960

Postby 1nvest » July 6th, 2020, 12:27 am

bluedonkey wrote:What does 3% net net net mean?

Shorthand for net of costs, fees and taxes perhaps?

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Re: When should we get greedy?

#324024

Postby GoSeigen » July 6th, 2020, 10:21 am

1nvest wrote:
bluedonkey wrote:What does 3% net net net mean?

Shorthand for net of costs, fees and taxes perhaps?


Almost: Net of fees, tax, and inflation. (That's my meaning anyway...). So a clear 3% real return is what I aim for.

GS

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Re: When should we get greedy?

#324253

Postby 1nvest » July 7th, 2020, 10:08 am

GoSeigen wrote:
1nvest wrote:
bluedonkey wrote:What does 3% net net net mean?

Shorthand for net of costs, fees and taxes perhaps?


Almost: Net of fees, tax, and inflation. (That's my meaning anyway...). So a clear 3% real return is what I aim for.

GS

Twas late at night when I posted that alcohol induced costs/fees (same thing) brain fart :)

Clear 2.6% for me, in the broad sense. Anticipate 1.2% from each of dividends/interest, SWR, imputed and price appreciation (surplus real) ... type diversification. So 4.8% average (2.2% margin of safety), with 2.4% is as good as consistent/reliable. Talmud type asset allocation (land/stock/gold). Marginally less than all-stock, but with broader and more consistent income production diversification. £/$/global (gold) currency diversification; Land, stocks, commodity asset diversification. Somewhat old-money style of land/art/gold - but with art swapped out for stocks (tolerate reduction to 67/33 tangible/non-tangible for the greater simplicity). With states increasingly however looking to know where you are, what you're doing and where all your wealth is - that does raise confiscation risk (excessive taxation at the states whim). When others know where all your money/wealth is then its no longer your money but a loan from them, open to being confiscated at any time of their choosing. Have to laugh when our government accuses China about lack of freedoms. Increasingly tempted to emigrate and be a retired (soon to be 60) perpetual traveller (seasonal rotations).

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Re: When should we get greedy?

#324678

Postby stevensfo » July 8th, 2020, 8:02 pm

1nvest wrote:
GoSeigen wrote:
1nvest wrote:Shorthand for net of costs, fees and taxes perhaps?


Almost: Net of fees, tax, and inflation. (That's my meaning anyway...). So a clear 3% real return is what I aim for.

GS

Twas late at night when I posted that alcohol induced costs/fees (same thing) brain fart :)

Clear 2.6% for me, in the broad sense. Anticipate 1.2% from each of dividends/interest, SWR, imputed and price appreciation (surplus real) ... type diversification. So 4.8% average (2.2% margin of safety), with 2.4% is as good as consistent/reliable. Talmud type asset allocation (land/stock/gold). Marginally less than all-stock, but with broader and more consistent income production diversification. £/$/global (gold) currency diversification; Land, stocks, commodity asset diversification. Somewhat old-money style of land/art/gold - but with art swapped out for stocks (tolerate reduction to 67/33 tangible/non-tangible for the greater simplicity). With states increasingly however looking to know where you are, what you're doing and where all your wealth is - that does raise confiscation risk (excessive taxation at the states whim). When others know where all your money/wealth is then its no longer your money but a loan from them, open to being confiscated at any time of their choosing. Have to laugh when our government accuses China about lack of freedoms. Increasingly tempted to emigrate and be a retired (soon to be 60) perpetual traveller (seasonal rotations).


I think that people will always find a way around or the system will find a healthy balance. I worked in France 89-99 and although I was clueless in those days, I wondered why so many well-off colleagues lived in houses and apartments that looked drab from outside, but inside, were like the palace at Versailles. Turns out the authorities valued everything from the outside, so it was in everyone's interest to live in a hovel that looked cheap, but a hovel with paradise inside. We did pay a Taxe fonciere, which was a house tax on top of the Taxe d'habitation - but it was affordable.

In Italy, we pay no council tax or wealth tax whatsoever on the primary residence, but only on the second place. Since families are small here, most Italians have inherited or bought a second apartment, usually in the mountains or coast, and they grumble about having to pay something, but it doesn't seem to stop them. However, they DO have a tax on bank accounts- approx 35 euros/year. After the financial crisis, this was also on savings accounts, but stopped after a few years, since it got embarrassing with people actually owing money when their savings accounts went below zero! :-)

To be honest, the country that scares the pants off me is the UK. The council tax has reached absolutely ridiculous amounts and I wonder how any person only on the state pension can afford it. I think my Mum (85) is paying something ludicrous like 1200 a year, and she can afford it only because she doesn't smoke, drink, has a tiny car and rarely goes out. So crazy to charge so much just for living in a bloody house!


Steve

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Re: When should we get greedy?

#324686

Postby dealtn » July 8th, 2020, 8:28 pm

stevensfo wrote:...I wonder how any person only on the state pension can afford it.


There's "Council Tax Reduction" benefit. Depending on the Local Authority that could be as much as 100% reduction.

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Re: When should we get greedy?

#324701

Postby Lootman » July 8th, 2020, 9:25 pm

dealtn wrote:
stevensfo wrote:...I wonder how any person only on the state pension can afford it.

There's "Council Tax Reduction" benefit. Depending on the Local Authority that could be as much as 100% reduction.

Yes, when my dad died we restructured my mother's assets so that she was no longer liable for council tax. She never paid it again in 17 years.

To the earlier comment I never measure investment returns in after-tax terms because they are never quoted that way so I'd have nothing to compare my returns to. And besides they vary by person. And given that much of my investments are tax-sheltered or tax-deferred, that just makes more sense to me.

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Re: When should we get greedy?

#332549

Postby GoSeigen » August 12th, 2020, 8:10 am

GoSeigen wrote:
GoSeigen wrote:
GoSeigen wrote:
Having closed most of the put legs on my short straddles I started the week very heavily short (mostly Jun) calls with strikes all the way down to 2800. Today's falls are welcome as the Jun contracts will rapidly lose value and I can close them out or let them expire next Friday. 2825 or lower next Friday would be ideal...

Opened a long Dec straddle today as the vol curve inverted.

GS


Turns out 2825 was a fantasy. S&P opened at 3161 at expiration today so most of my short calls were in the money. I decided to roll them into short index futures given the high level of the S&P. That might be premature but I am elsewhere leveraged long UK and international stocks so happy to start hedging a bit. This is a directional call, the first time I've felt comfortable about it for some time. Depending what happens I may trade short straddles again. VIX is still pretty high.


GS


Wrote Jul S&P strangles today. I still can't call the direction here. Implied volatility remains very high. I'm long UK stocks, short US futures so don't really mind which way the market moves.

With a good downward move I'll look to close any Jul short calls, write puts or buy Mar 2021 straddles.
If an upward move will close Jul puts or write calls, maybe take profit on some long stock positions.
If sideways, will just get a steady stream of premium from the options, most positions are in profit now.



Sorry, haven't updated for a while. Basically, with elevated VIX and steep term structure I had kept writing straddles and strangles. [All positions in S&P 500 index] With the recent steeper rise in the S&P I first wrote some calls, then got busy closing out the short put leg of the Aug expiries; by yesterday they were all gone, so this option trading portfolio remains overwhelmingly short calls now, all of them ITM to various extents.

A short-term big drop would be nice to close out the Aug calls but somehow this market looks like it's going up. With the modest drop yesterday I've maintained my discipline and opened a few more Sep short straddles. If the market does continue rising until expiration I'll accept being assigned on the short calls (actually will run on as short index futures).

GS

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Re: When should we get greedy?

#341227

Postby GoSeigen » September 18th, 2020, 3:54 pm

GoSeigen wrote:
GoSeigen wrote:
GoSeigen wrote:
Turns out 2825 was a fantasy. S&P opened at 3161 at expiration today so most of my short calls were in the money. I decided to roll them into short index futures given the high level of the S&P. That might be premature but I am elsewhere leveraged long UK and international stocks so happy to start hedging a bit. This is a directional call, the first time I've felt comfortable about it for some time. Depending what happens I may trade short straddles again. VIX is still pretty high.


GS


Wrote Jul S&P strangles today. I still can't call the direction here. Implied volatility remains very high. I'm long UK stocks, short US futures so don't really mind which way the market moves.

With a good downward move I'll look to close any Jul short calls, write puts or buy Mar 2021 straddles.
If an upward move will close Jul puts or write calls, maybe take profit on some long stock positions.
If sideways, will just get a steady stream of premium from the options, most positions are in profit now.



Sorry, haven't updated for a while. Basically, with elevated VIX and steep term structure I had kept writing straddles and strangles. [All positions in S&P 500 index] With the recent steeper rise in the S&P I first wrote some calls, then got busy closing out the short put leg of the Aug expiries; by yesterday they were all gone, so this option trading portfolio remains overwhelmingly short calls now, all of them ITM to various extents.

A short-term big drop would be nice to close out the Aug calls but somehow this market looks like it's going up. With the modest drop yesterday I've maintained my discipline and opened a few more Sep short straddles. If the market does continue rising until expiration I'll accept being assigned on the short calls (actually will run on as short index futures).

GS


VIX is still high and so I continue to write options. Aug expiration ended with several calls ITM, I rolled those positions to Sep short strangles. Also opened a short Nov call around 1 Sep which looked foolish for a few days but is now well OTM and I wrote a short Nov put against the call to complete the strangle.

Sep expiration was very good with practically every position closing out of the money. Used part of the freed margin to open an Oct short strangle.

As has been the case for months, I don't have the ability to call direction in the short term and have actually been surprised at the speed and relentlessness of the bull run since March. Thus with elevated implied volatility I am happy to keep making these non-directional trades in the US market and to stock pick in the UK market.

GS

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Re: When should we get greedy?

#341307

Postby redsturgeon » September 19th, 2020, 9:07 am

Still gambling with my SUK2 short fund. In and out faster than a fiddlers elbow. Made a few thousand over lockdown. Enough to pay the bills.
Would not dream of doing this in normal circumstances but still believe the other shoe is yet to drop.

John


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