Algo Options Trading Campaigns


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T2W members,

I will lay out options campaigns in this thread taken by yours truly - based off an automated algorithmic-based options approach. Hopefully options newbies and active options traders can monitor and ask focused questions - will do my best to reply asap.

Here is this morning's options campaign on CMCSA.

CMCSA was at $38.39

1. Direction = bullish ----> price is in a good "Buy Low" zone.
2. Implied Volatility = low at the 5%ile level = be net long call options.
3. Duration = > 4 weeks = use Jun (16) expiry.
4. Target = look to take out Daily High at $40.70 zone.
5. Alt Target = consider EXIT if ROR > 100% before Expiry.
6. Overlay credit spreads weekly to harvest Extrinsic Time Value and reduce Initial Cost Basis.

Step 1 = establish directional bet with > 4 wks to Expiry
Bought to Open (+50) CMCSA Jun (16) $38.75 Calls. ETV=(-$0.785). Delta (+0.45).
Filled avg price (-$0.79) per 1-lot.
Initial Max Risk = (-$0.79) per 1-lot = (-$79) per 1-lot * (50) = (-$3950).

Step 2 = overlay front wkly call credit spread to harvest ETV
Sold to Open (-50) CMCSA May (12) $38.50 Call. ETV=(+$0.38). Delta (-0.46).
Bought to Open (+50) CMCSA May (12) $39 Call. ETV=(-$0.20). Delta (+0.29).
Net Credit (+$0.18).

Net (Step 1 + Step 2):
Adjusted Cost Basis (ACB) = (-$0.61) per 1-lot.
Net ETV = (-$0.605) per 1-lot.
Net Delta = (+0.28) per 1-lot.

1. Plan to Adjust and Roll every week to reduce Cost Basis & harvest ETV.
2. If CMCSA breaks lower - will look to ADD into campaign to increase bullish Delta.
3. Roll to Zero Cost Basis = "No Lose" scenario as quickly as possible.
4. Expected Duration = 4-6 weeks.

Will keep you closely updated on all Adjustments.

Good trading to all.

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