Forum

Policies – please read!

  • Everyone can read posts, but to start a new topic or add a reply you’d need to register. To create an ID, please verify your email address. You will get a link at that email address and you can then pick a password.
  • Be courteous to others. Treat others like you like to be treated. Discuss the issues. No ad-hominem attacks!
  • It’s OK to include external links if they are relevant. But please avoid spamming! Please no affiliate links.
  • Before starting a new topic, please check if that question/topic has been discussed before already and add to that discussion instead of starting a new topic.
  • If you’ve written a cool blog post that you want to share with others please post this in the “Self-Promo” category only!
  • Please read the usual Disclaimers and the Privacy Policy!
  • The forum policies may be amended in the future!
Notifications
Clear all

June 2021 Trades

Page 3 / 4

NavyPack
Posts: 161
(@navypack)
Estimable Member
Joined: 1 year ago

Any idea why MHD jumped up today even on ex-div date?

Reply
2 Replies
nobatmanjokes
(@nobatmanjokes)
Joined: 1 year ago

Trusted Member
Posts: 91

@navypack to me it looks like normal price fluctuation that happens to be about equal in size to the dividend. NMZ also opened higher on Monday despite it being the ex date.

Reply
figuy1
(@figuy1)
Joined: 10 months ago

Eminent Member
Posts: 42

@navypack That is unusual especially given how prices typically drop after the dividend comes out.  It looks like the ~2% rally started Friday morning but dropped at the close then bounced back Monday.  I'm guessing some of this volatility is partially from illiquidity due to it being a smaller fund.

I did see some of the ratings agencies upgraded NY's state credit outlook on Monday which is the biggest holding of this fund (10%).  I wouldn't have guessed that alone would lead to a 2% gain though.  Bonds overall did gain last week with yields dropping to a 3 month low, but this fund was down slightly.  Perhaps, it took awhile for this less liquid bond fund to "catch up".

Reply
earlyretirementnow.com
Posts: 250
(@earlyretirementnowcom)
Member
Joined: 6 years ago

Pretty rich premium today for the Jun 17 Expiration (=June 18 open), so 1.5 days to expiration. Targeting 0.80 premium now with strikes in the low 4,000s.

Reply
6 Replies
Alex
 Alex
(@alex)
Joined: 6 months ago

Active Member
Posts: 14

@earlyretirementnowcom thanks for the heads up ERN. Didn't get a chance to see what was being offered today but looks like the VIX did have a small jump

 

Reply
earlyretirementnow.com
(@earlyretirementnowcom)
Joined: 6 years ago

Member
Posts: 250

@alex Whoa! Walked my strikes down to 3,900 and 3,925. And that's for the Friday morning SPX open. Should be easy money, even if there's a bit of Fed-induced uncertainty now.

Reply
Alex
 Alex
(@alex)
Joined: 6 months ago

Active Member
Posts: 14

@earlyretirementnowcom Wow! You have over 5% buffer between the close and strike. I remember you mentioned this in an article but the self correcting factor from the VIX is there. Once the fear is in everything adjusts according. The main risk is that pivot point where it turns down

 

Had a hard time prior to getting anything unless I got within 1%!

Reply
figuy1
(@figuy1)
Joined: 10 months ago

Eminent Member
Posts: 42

@earlyretirementnowcom I can't believe how high the premiums are for Friday morning expiring options vs afternoon.  At different points after the fed number, yesterday it seemed like the 1.5 DTE options had 80-90% of the premium of the 2 DTE options.

Reply
earlyretirementnow.com
(@earlyretirementnowcom)
Joined: 6 years ago

Member
Posts: 250

@figuy1 Yeah, I made a nice pile with the Friday morning options. And then on Thursday, I double-dipped and sold the Friday afternoon expiration as well.

Reply
jtan
 jtan
(@jtan)
Joined: 6 months ago

New Member
Posts: 1

@earlyretirementnowcom 

BigERN --- thank you for creating this wealth of information. Been following your website & blog more recently and love your content & navigating around nuances of finance & life. First post for me here :))

Two questions:
1. How often do you see this very front-vol spike. FOMC + Triple witching risk?
2. How do you manage your leverage / risks during such times? I am suspecting that you will go lower delta + increase a little based on the way you've shared in your Option series.

Feel free to branch to another article if necessary. I'm new so might be not as tactical in where to best discuss 😛

Reply
charlie02
Posts: 12
(@charlie02)
Active Member
Joined: 10 months ago

Looks like VIX remains high for today (6/18/2021 Friday). Does anyone have any insight into the pullback today?

Reply
1 Reply
earlyretirementnow.com
(@earlyretirementnowcom)
Joined: 6 years ago

Member
Posts: 250

@charlie02 Uncertainty about Fed policy, i.e., possible inflation shock and faster than expected rate hikes

Reply
mpaziran
Posts: 13
(@mpaziran)
Active Member
Joined: 7 months ago

For those whose accounts are big enough to only sell 1 contract at a time, what's your closing strategy? Ideally, I know one should let them expire worthless, but if you do that you lose out on a day of trading.

For example, I sold the options that expired this morning(Friday) but my margin account will not be replenished until Monday

Another example would be if I sell the W options and let them expire worthless, I won't be able to sell the F options until my account gets replenished on Thursday.

I've been setting limits (buy to close) orders at either $0.05 or $0.10 but would love to hear what others do.

Reply
6 Replies
NavyPack
(@navypack)
Joined: 1 year ago

Estimable Member
Posts: 161

@mpaziran do you have portfolio margin? 

When I had smaller account, I would just trade a vertical to reduce the margin impact.  I liked having downside protection better than buying to close trades for $0.05.

Reply
mpaziran
(@mpaziran)
Joined: 7 months ago

Active Member
Posts: 13

@navypack I don't think I have portfolio margin (just a regular margin account). I'll have to do more research into that. Thanks!

Reply
mpaziran
(@mpaziran)
Joined: 7 months ago

Active Member
Posts: 13

Actually I was able to call Fidelity and they did confirm I do have portfolio margin.

Reply
NavyPack
(@navypack)
Joined: 1 year ago

Estimable Member
Posts: 161

@mpaziran my SPX puts take about 45-50k of margin per contract.  Back to your question, simple answer is to buy back the old put and sell the next 2DTE contract.

Reply
nobatmanjokes
(@nobatmanjokes)
Joined: 1 year ago

Trusted Member
Posts: 91

@mpaziran Another route is to trade 2 ES contracts for a while until you’re up at $150k or so with portfolio margin. Requires you to hold a bit more cash but the margin requirements are lower (~12k per contract). Allowing the contracts to expire more than offsets the higher fees on the futures contracts since you now avoid the $5 buy to close.

Reply
earlyretirementnow.com
(@earlyretirementnowcom)
Joined: 6 years ago

Member
Posts: 250

@mpaziran There was a comment in one of the posts recently with a similar question. The margin requirement should never be an issue. I like to keep at least 3x the minimum margin, so having twice the # of contracts around for a short period will not be a problem. If people have only $50k to short one single put and the margin requirement is ~$36k, you have way too much exposure. Target at least $120k-$150k in equity per contract or trade smaller contract sizes. Or trade spreads.

Reply
NavyPack
Posts: 161
(@navypack)
Estimable Member
Joined: 1 year ago

At 1030 EST, sold Monday 4000 Strike for $1.50, which was 3.2 delta and 23 IV.  Market was at 4183

Reply
4 Replies
nobatmanjokes
(@nobatmanjokes)
Joined: 1 year ago

Trusted Member
Posts: 91

@navypack 3920 at 1.1 right at open.

Reply
NavyPack
(@navypack)
Joined: 1 year ago

Estimable Member
Posts: 161
earlyretirementnow.com
(@earlyretirementnowcom)
Joined: 6 years ago

Member
Posts: 250

@navypack My strikes: 3925, 3950, 3975. Should be safe!

Reply
NavyPack
(@navypack)
Joined: 1 year ago

Estimable Member
Posts: 161

@earlyretirementnowcom certainly should hope so!  Rule set when retired vs still working would be interesting discussion!

Reply
Page 3 / 4
Share: