Is consistent option income possible?

[luckyd1976]

GM,

Todays Adjustments will be

NFLX
Filled Jul 16th AUG IC 160/150/95/85 NCredit 1.54

Earnings after the bell last night dropped the stock -8% to 110 ish. SO today I'll be Rolling, rolling, rolling lol.

 

[luckyd1976]

GM,

Todays Adjustments will be

NFLX
Filled Jul 16th AUG IC 160/150/95/85 NCredit 1.54

Earnings after the bell last night dropped the stock -8% to 110 ish. SO today I'll be Rolling, rolling, rolling lol.

NFLX
AUG 160/150 --> 145/135 for additional NC $0.18
AUG 95/85 looks fine for me right now, not to worried yet. Usually I wait around til 10am(ish) to roll, let the open settle in. But today I have to do some errands early so.

 

[luckyd1976]

NFLX
145/135 --> 130/120 for ANOTHER ROLL additional NC $0.42

Went tighter than the usual +10 delta. I feel this Parabolic rate will slow down.


Im going to be watching the NFLX tomorrow. SPY CAlls are now 2% might roll them mout alittle for a small debit we'll see, I'm off to roll away.

 

[luckyd1976]

Well today I took alittle bit of an adjustment beating.

10 IC
1 Bearish Call Spread Remain

+17.6 Since June 3 for AUG10 (Two Exp Month)

Today was Adjust down Nflx and Roll up the SPY Calls from 114/112 --> 118/116 I thought today we were going to see the 110 breakout and the 2% rule was in effect so a 0.50 debit roll up on the SPY Calls.

Tomorrow continue to watch NFLX, SPY, and keep an eye on AMZN. -10% afterhours on earnings Im probably going to initiate a position.

 

[option911]

AMZN was one of those classic examples where a cheap option could possibly pay for the dramatic drop had a trader put on some sort of iron condor (although I have to brag here, I am on recorded tape saying it was a bad idea and that I didnt hate the straddle).

 

[luckyd1976]

AMZN was one of those classic examples where a cheap option could possibly pay for the dramatic drop had a trader put on some sort of iron condor (although I have to brag here, I am on recorded tape saying it was a bad idea and that I didnt hate the straddle).

ATM 120 Straddle nice call

On the Iron Condor Protection against earnings Put/Calls

Say I put on a IC AMZN AUG
150/140/100/90
NCredit 0.99 going into the close.
Which puts calls would you have reccommended?

 

[luckyd1976]

AMZN kind of predicted this earning too, with their this week early relesase of their Kindle and Ebook sales info. Apparantly Ebooks are out selling everything.

Every talking head on CNBC was like why did they release this info 5 days prior to their Earning report. They were trying to drum up the stock before the lackluster release.

 

[daveyc]

hello,
i may need to adjust my new spy iron condor but i am going to wait until early next week to see if we can come down a bit, and the same with my eem positions. monster move yesterday!

my current spy position is 93/95/116/118 so if this move up continues i will either just move the spreads up to get the delta neutral. or i was thinkging buying 114/117 and selling 99/97 which would get the delta neutral too and give some potential for more income if the spy continues higher. this would increase the margin requirment. for eem, just may buy the 42 calls calendar (sell aug and buy jan) and adjust the call spread. hope none is necessary but we shall see by monday or so.

 

[luckyd1976]

DaveyCalendar,

How are the calendars working for you?

 

[daveyc]

DaveyCalendar,

How are the calendars working for you?

hello lucky,
well my calendars were looking wonderful until yesterday. still profitable but barely, the move higher crushes the volatility and hurts the calendars. however, selling the front month and buying much further out is helpful, rather than buying the next month because the further out options will not move as much. i was forecasting a move down in the market, i am not correct as this point, and the calendars like the down moves. i will wait until monday or so to adjust any positions and see if we get some selling and/or some time decay of these options. just hanging in.

 

[luckyd1976]

hello lucky,
well my calendars were looking wonderful until yesterday. still profitable but barely, the move higher crushes the volatility and hurts the calendars. however, selling the front month and buying much further out is helpful, rather than buying the next month because the further out options will not move as much. i was forecasting a move down in the market, i am not correct as this point, and the calendars like the down moves. i will wait until monday or so to adjust any positions and see if we get some selling and/or some time decay of these options. just hanging in.

I was thinking about adding some Non-directional calendars in. Are you making sure the front month IV is really high comparable to the LTerm? recoup as much as you can that front month.

 

[daveyc]

I was thinking about adding some Non-directional calendars in. Are you making sure the front month IV is really high comparable to the LTerm? recoup as much as you can that front month.

that is the correct way and looking at these iv's they are the opposite of what would be beneficial for the trade to work. they are difficult. selling the volatility is the way. thanks lucky.

dc

 

[luckyd1976]

New IC

AMZN AUG IC 135/130/90/85
Net Credit 0.33
Deltas were all the way out there at 6-8ish ten minutes ago.

+6.6% for 28 day hold with no earnings, I'll take it hopefully the market will keep in neutral for a little bit on AMZN

 

[luckyd1976]

that is the correct way and looking at these iv's they are the opposite of what would be beneficial for the trade to work. they are difficult. selling the volatility is the way. thanks lucky.

dc

Man it's been a long time since i ran the screener. lol
Looking for Calendar Prospects.
D

 

[luckyd1976]

Thanks, glad to be here. Risk Management is great because I get to be involved with some nice trading without having to sit there and watch the screen.

O911, I always wondered, on a money management note.

Does the firms give RManagers access to view everything (Greeks, $, position sizes, leverages, etc...)

 

[luckyd1976]

New IC

AMZN AUG IC 135/130/90/85
Net Credit 0.33
Deltas were all the way out there at 6-8ish ten minutes ago.

+6.6% for 28 day hold with no earnings, I'll take it hopefully the market will keep in neutral for a little bit on AMZN

Man AMZN action today was like the biggest Fade the gap I've ever seen. Open $105.94 (-11.7%) and Faded all the way up (+12.3% intraday) to $119 (ending the day -0.85%)

Generally this kind of After Earnings move is unheard of. And Thankfully my IC is still +9% from ITM at 130.

I really do love writing IC on the day after earnings. You get the added benefits of major moves in Volitility and MOST of the time the prices settle in with no more catalyst.

 

[option911]

O911, I always wondered, on a money management note.

Does the firms give RManagers access to view everything (Greeks, $, position sizes, leverages, etc...)

yes we do, actually i look at a few other things as well

 

[option911]

Was going to say, I dont like the RR of collect .33 cents on that trade. Esspecially with an equity trade.

 

[daveyc]

ok, well, who knows if this move continues, so i started to make some adjustments on my spy position by selling a put spread 101/99 for .10 and moving a portion of the calls up with a butterfly roll, 116/118/120 for .19 but still waiting to get filled.

for eem, i bought the 42 calendars (aug/jan) and did a butterfly roll up on the calls, 43/44/45 for .14

these are still in position to make money by expiration and i am still biased to a down move but will add postions and be delta neutral by the end of the week.

 

[daveyc]

ok, well, who knows if this move continues, so i started to make some adjustments on my spy position by selling a put spread 101/99 for .10 and moving a portion of the calls up with a butterfly roll, 116/118/120 for .19 but still waiting to get filled.

for eem, i bought the 42 calendars (aug/jan) and did a butterfly roll up on the calls, 43/44/45 for .14

these are still in position to make money by expiration and i am still biased to a down move but will add postions and be delta neutral by the end of the week.

never got filled on my butterfly roll for spy, so today i bought the 116 call for sept for 1.08. so this is what got me to a delta neutral position in spy. this is my first try at attempting to morph this trade potentially into a calendar spread if we move higher. so i am stepping into it slowly. hope i'm not stepping into something else

i know to get to the 'next level' in option trading is to be able to 'morph' trades or turn them into something else that can keep you in a profitable situation. i think this is critical and takes the fear out of putting on various option strategies. anyways, i'm staying small until i can prove to myself and get my confidence back in this game. good luck guys.