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Wally Fairway

Surly #Stonks

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This thread is not investing but rather #stonk advice

Invest like aggy, but make money

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and this is meant to keep clear of the Markets still falling thread here - 

 

For reference, this is for people to get/give advice similar to this https://www.reddit.com/r/wallstreetbets/

I'll post my current market making/losing advice after I get that 2nd cup of caffeine going

 

 

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Caffeined up, let's go

So here is today's bet - regardless of what the market does today, buy short expiration SPY near money puts and calls today. Buy them close to the closing bell and my assumption is that the market will open significantly up or down on Monday. 
The most aggy bet would be to do this with 3-2 expiration, that's the ultimate leverage - but if you want to be slightly less aggy then go 3-4 or 3-6; one side of this bet will almost certainly go to $0, but the idea is that you don't have to guess right on which way the market opens you just want it to go up or down in a big way. Easy way to get 5x or 10x your investment.

Example on Wednesday I bought some 2-28 expiration SPY puts at 311, and calls at 316 - cost of each was about $1,000; the calls are worth $0, but the puts will be worth over $7.000 at the open today (except I sold some of them yesterday for 1/2 that price).

burn my house down, tell me what I'm missing????


Disclaimers - 
I am not giving advice, I am asking advice - do not make investment decisions based on anything you read in this thread.
Past performance is no guarantee of anything, fuck with the bull and you get the horns.
The time to buy is when there is blood in the streets - Baron Rothschild
The New York Stock exchange is the only store in the world where consumers sell stuff when it goes on sale - Warren Buffett

Edited by Wally Fairway

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30 minutes ago, Wally Fairway said:

Disclaimers - 
I am not giving advice, I am asking advice - do not make investment decisions based on anything you read in this thread.
Past performance is no guarantee of anything, fuck with the bull and you get the horns.
The time to buy is when there is blood in the streets - Baron Rothschild
The New York Stock exchange is the only store in the world where consumers sell stuff when it goes on sale - Warren Buffett

tenor.gif

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Only posting in here to join the autists and to tell you bears are gay.

 

i didn’t know we had wsb on surly but I’ll tell you some of my worst purchases.

 

CHK is a great one.  

Red Hat back in the day is another.

My current stupid buy is MNK.  I am in at around 5 bucks per share and it seriously could go to zero.

 

 

 

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I’m going all in on SDC. I bought at the previous low, pre-Corona, and it jumped 40% over a month and now it’s dropped again. I’m gonna buy a thousand shares, let’s go!

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SEC investigation incoming in a few days.

 

 

 And by that I mean aggy trolls, not the toothless federal agency.

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i bought a few APPL puts this week. Since most of their manufacturing is in China they have a huge exposure.

i should have done it last Friday but didn't. oh well. :(

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1 hour ago, Wally Fairway said:

Caffeined up, let's go

So here is today's bet - regardless of what the market does today, buy short expiration SPY near money puts and calls today. Buy them close to the closing bell and my assumption is that the market will open significantly up or down on Monday. 
The most aggy bet would be to do this with 3-2 expiration, that's the ultimate leverage - but if you want to be slightly less aggy then go 3-4 or 3-6; one side of this bet will almost certainly go to $0, but the idea is that you don't have to guess right on which way the market opens you just want it to go up or down in a big way. Easy way to get 5x or 10x your investment.

Example on Wednesday I bought some 2-28 expiration SPY puts at 311, and calls at 316 - cost of each was about $1,000; the calls are worth $0, but the puts will be worth over $7.000 at the open today (except I sold some of them yesterday for 1/2 that price).

burn my house down, tell me what I'm missing????


Disclaimers - 
I am not giving advice, I am asking advice - do not make investment decisions based on anything you read in this thread.
Past performance is no guarantee of anything, fuck with the bull and you get the horns.
The time to buy is when there is blood in the streets - Baron Rothschild
The New York Stock exchange is the only store in the world where consumers sell stuff when it goes on sale - Warren Buffett

I still don't understand how to buy calls. Maybe it is the way E*Trade lists them.

 

The options for a Call are "Buy Open", "Sell Open", "Buy Close", and "Sell Close". Then I see all those same options for a Put. 

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14 minutes ago, hornbri said:

I still don't understand how to buy calls. Maybe it is the way E*Trade lists them.

 

The options for a Call are "Buy Open", "Sell Open", "Buy Close", and "Sell Close". Then I see all those same options for a Put. 

When you start to take a position you will have to Buy to Open, or Sell to Open - either puts or calls, at specific prices and expiration dates, as you can either buy or sell the options.

Once you have that position - let's say you buy 5 SPY $285 3-6-20 puts, when you get to your next transaction and you want to sell 3 SPY $285 3-6-20 puts, you have to tell them that you are selling 3 contracts that you currently own (sell to close) or you want to sell and keep the risk open on the existing contracts (sell to open). 
In essence you cannot buy or sell to close any position that you do hold, but the screens will only tell you this after you make your selection (and that is if it is a good platform)
It takes a while to learn the terminology, and the nuances in the platform you are using - I will tell you that I've mistakenly bought/sold contracts that were not what I meant to do. You really need to look at your confirmations to see if they reflect your intent....and if not close them ASAP and take the loss (or gain). 

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I would add to the above - if you are asking what buy to open etc etc mean, you should absolutely not be trading options. 

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I don't pay as much attention to XOM and CVX as I use to, but are these guys looking at cutting dividends?  The yields are crazy at this price level. 

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4 minutes ago, 936horn said:

I would add to the above - if you are asking what buy to open etc etc mean, you should absolutely not be trading options. 

That's true - maybe it is just unfamiliarity with the tools on E*Trade, but if you want to understand options here is a good place to start.
https://www.investopedia.com/options-basics-tutorial-4583012


I read up for at least 6 months, and found a trial platform where you could buy/sell and track "pretend" transactions to get the feel.  
You really need to understand the dymanic that you are dealing with because these can quickly become worthless....all that said I am breathing deeply and considering making my biggest "investment" ever in options by 4pm today

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1 minute ago, Wally Fairway said:

That's true - maybe it is just unfamiliarity with the tools on E*Trade, but if you want to understand options here is a good place to start.
https://www.investopedia.com/options-basics-tutorial-4583012


I read up for at least 6 months, and found a trial platform where you could buy/sell and track "pretend" transactions to get the feel.  
You really need to understand the dymanic that you are dealing with because these can quickly become worthless....all that said I am breathing deeply and considering making my biggest "investment" ever in options by 4pm today

Agreed, I did lots of reading before ever trying to trade options. I will say, you had some good advice above though. If someone wanted to jump in with "limited" risk (i.e. not infinite downside risk) then you could buy near money puts and calls. If the market pops one way or the other Monday, one of your positions is worthless and you lose the investment (but not infinite losses) and your other one should make up for it and then some.

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5 minutes ago, Wally Fairway said:

I read up for at least 6 months, and found a trial platform where you could buy/sell and track "pretend" transactions to get the feel.  

Got a link?  I've been reading up on options for a few months and tried using a spreadsheet I found to track my trial run performance but it's been lacking. I'd prefer an app to test the waters.

 

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14 minutes ago, 936horn said:

I would add to the above - if you are asking what buy to open etc etc mean, you should absolutely not be trading options. 

don't listen to him. trading in derivatives is the safest bet you can have, well besides fucking a festering haiti hooker without a condom.

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1 hour ago, WithoutAClue said:

i bought a few APPL puts this week. Since most of their manufacturing is in China they have a huge exposure.

i should have done it last Friday but didn't. oh well. :(

I bought April 300  puts on 2/5 and then bought more on 2/13 for an average price of about $5. Sold half a couple days ago to lock in profits ($16...fuck). Sold the other half today at $40. 270 was the price I had in mind as the bottom and it's over shot that. May jump back in the supply issue gets some clarity.

Still holding my CCL puts at a 10x  profit and a SPY 300 put for Mar 20, but mainly I've exited most of my short positions,. My 401K accounts are down but the trading account I manage is up 35% overall this week. Crazy fucking week. 

Edited by Blotto
Math is hard

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7 minutes ago, CooterBrown said:

Got a link?  I've been reading up on options for a few months and tried using a spreadsheet I found to track my trial run performance but it's been lacking. I'd prefer an app to test the waters.

 

Nah - that was a number of years ago, and I'm old and have lost those brain cells.
But you should still take notice of my investments

https://lmgtfy.com/?q=practice+stock+option+tradgin

 

Edited by Wally Fairway

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I will add that if the market continues to creep up I will buy uvxy calls and spy puts a couple of hours before close. Recent pattern has been selling late in the day, plus a full weekend of pandemic uncertainty scratches that gambling itch.

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I am an option newb, and still don't know all the different plays and strategies beyond the most simple. I like using index puts to hedge, and selling covered calls. When I roll dice I buy some calls or puts on certain targets.  Options have basically saved my trading account this week and kept me in the green. 

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46 minutes ago, 936horn said:

I would add to the above - if you are asking what buy to open etc etc mean, you should absolutely not be trading options. 

Don't listen to this man.  Do whatever you want and then tell us how it goes. 

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How stupid of an idea is it to start selling SPY puts at these levels?  I am thinking like Apr 17 @275. I mean, we can't drop 3% every day right?

Edited by Anastasis

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32 minutes ago, Anastasis said:

How stupid of an idea is it to start selling SPY puts at these levels?  I am thinking like Apr 17 @275. I mean, we can't drop 3% every day right?

Takes some balls to do that naked in this environment. More balls than I have for sure.

Jumped on QQQ puts at 200 and 198 expiring today. Paid .50 for each as I bought them about 30 mins apart. 

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45 minutes ago, Anastasis said:

How stupid of an idea is it to start selling SPY puts at these levels?  I am thinking like Apr 17 @275. I mean, we can't drop 3% every day right?

Stupid???? I think not

more like aggy brilliant

Image result for brilliant meme

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1 minute ago, Wally Fairway said:

Stupid???? I think not

more like aggy brilliant

Image result for brilliant meme

Hey, to win at this game you have to make money on both the way down and the way up. What could go wrong. 

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3 hours ago, 936horn said:

Agreed, I did lots of reading before ever trying to trade options. I will say, you had some good advice above though. If someone wanted to jump in with "limited" risk (i.e. not infinite downside risk) then you could buy near money puts and calls. If the market pops one way or the other Monday, one of your positions is worthless and you lose the investment (but not infinite losses) and your other one should make up for it and then some.

FWIW - not surprisingly the price of near market options has gone up a bit over the last week, as the risks have grown. Since nobody really knows what will happen from 4pm Friday until 9:30am Monday, so you pay more for someone to take on that risk

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Made a good chunk of change playing APT Options off the coronavirus.

Thinking ahead... what about labs? Quest Diagnostics and LabCorp? They’re both fairly expensive stocks ($100/share+), but with the correction this week, Call Option Premiums going out 2-3 months are fairly cheap. Anyone have a thought on who is going to be doing all of the testing of this thing does get as widespread as we think?

If anyone has some other smaller-cap and perhaps overlooked lab testing public cos in mind, let us know....

Edited by BLKNSTY

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4 hours ago, Wally Fairway said:

When you start to take a position you will have to Buy to Open, or Sell to Open - either puts or calls, at specific prices and expiration dates, as you can either buy or sell the options.

Once you have that position - let's say you buy 5 SPY $285 3-6-20 puts, when you get to your next transaction and you want to sell 3 SPY $285 3-6-20 puts, you have to tell them that you are selling 3 contracts that you currently own (sell to close) or you want to sell and keep the risk open on the existing contracts (sell to open). 
In essence you cannot buy or sell to close any position that you do hold, but the screens will only tell you this after you make your selection (and that is if it is a good platform)
It takes a while to learn the terminology, and the nuances in the platform you are using - I will tell you that I've mistakenly bought/sold contracts that were not what I meant to do. You really need to look at your confirmations to see if they reflect your intent....and if not close them ASAP and take the loss (or gain). 

The one thing I've never been able to figure out is how E*Trade calculates buying power especially when selling puts to open.  For example, I can sell 5000 puts to open at $2.75 thereby netting me $13,450 after commission.  BUT, to execute this transaction, I need to have $81k in buying power.  Basically, for every 100 puts, I need to have $1620 in buying power.  HTF do they get to this $1620?  There doesn't seem to be any simple calculation involving cost of the stock, cost of the option, or anything like that.  I know why they do it, because on a put, your loss is theoretically limitless, I just don't know how they get to the number.  

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43 minutes ago, BLKNSTY said:

Made a good chunk of change playing APT Options off the coronavirus.

Thinking ahead... what about labs? Quest Diagnostics and LabCorp? They’re both fairly expensive stocks ($100/share+), but with the correction this week, Call Option Premiums going out 2-3 months are fairly cheap. Anyone have a thought on who is going to be doing all of the testing of this thing does get as widespread as we think?


Sent from my iPhone using Tapatalk

I like where your head it as, but you should confirm that the CV tests are run through those chains.  My assumption would be that they are running testing primarily through the CDC and state departments of health, but that could potentially change if community transmission ramps up beyond CDC testing capabilities. Even if they aren't running the CV tests, you could easily see a spill over effect related to other tests, CBCs, CMPs, other infectious disease tests, etc.  Not sure how much that would move the stock price however.  Three months out and we likely have the primary locked up, which could pressure healthcare stocks further.  

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Well I've made my bets.....now I have to hope Monday doesn't open flat, and that I'm not dead, or in the hospital to cash out whatever does happen. Otherwise my broker will have to liquidate a good portion of my account to settle my options (a risk that many people overlook)

I'm a Schwab guy and I just got this message - so for #Stonks aggys, keep in mind that this can and does happen to people, especially if they take yuge risks and/or don't close out in the money options,

Quote

If necessary, Charles Schwab and Co. may take action to prevent what we perceive as risk. We normally begin taking necessary action in accounts around 3:00 p.m. ET on the last day of trading for an expiring option, but we reserve the right to take action at any time.

Schwab does review the accounts for activity and we reserve the right to act without additional notice depending upon risk and market conditions. Schwab also reserves the right to submit "Do Not Exercise" instructions to the Options Clearing Corporation for any long option based on current market conditions, account equity, or other risk factors. Investing involves risks, including loss of principal. With long options, investors may lose 100% of funds invested.

Also - I wasn't using options at the time, but can any of the idiots on this thread tell me what happens if the markets are closed on Monday? 
How were options expirations handled post 9/11 when the markets closed for the week?
Asking for an aggy friend, who is already starting to get nervous - now 10 minutes into 65.5 hours until the market opens

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1 hour ago, Wally Fairway said:

Otherwise my broker will have to liquidate a good portion of my account to settle my options (a risk that many people overlook)

When I first started out with options I had some out of the money calls that were basically worthless when I checked an hour or so before close, but they skyrocketed in the last 15 minutes of the day to finish like .02 cents in the money.  Etrade exercised the options automatically and when I checked my account over the weekend, my  balance was negative a fairly healthy amount. Obviously this was a cash account, not margin. 

Dumbass 101, but luckily I had funds in another account so I just transferred it over and then sold the shares. Since the purchase price was basically at par with the actual price, by the time I could sell I actually lost a couple hundred bucks due to the stock falling in price. Lesson learned...just glad it wasn't like 20 contracts of SPY. If you have a cash account, you should be aware free-riding rules and how to avoid them.

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Made a good chunk of change playing APT Options off the coronavirus.

Thinking ahead... what about labs? Quest Diagnostics and LabCorp? They’re both fairly expensive stocks ($100/share+), but with the correction this week, Call Option Premiums going out 2-3 months are fairly cheap. Anyone have a thought on who is going to be doing all of the testing of this thing does get as widespread as we think?

If anyone has some other smaller-cap and perhaps overlooked lab testing public cos in mind, let us know....


Respiratory Equipment manufacturers is another thought. Just stumbled across Allied Health Products AHPI. May have missed the boat as it’s gone from $2/share to $24/share in just 2 days. Not sure if it has options though.


Sent from my iPhone using Tapatalk

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Posted (edited)

Stonks opening doesn't look good for my buy puts and calls strategy. 

Small moves up and down will make me lose both sides, on low  short term options. Aggy investing at it's worst.

Edited by Wally Fairway

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On 2/28/2020 at 1:32 PM, Anastasis said:

Hey, to win at this game you have to make money on both the way down and the way up

that's a better idea than my strategy of making money only on the way up

I don't have any good stories, most of mine are "I bought a tiny bit of ____ in a trough and it went way up and I sold it way before it finished going up". 

But I did buy $1000 of KaloBios (Humanigen) on what I hoped would be a huge short squeeze-- I bought in about a week before Martin Skreli was arrested, NICE. 

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Posted (edited)
On 2/28/2020 at 11:49 PM, BLKNSTY said:

 


Respiratory Equipment manufacturers is another thought. Just stumbled across Allied Health Products AHPI. May have missed the boat as it’s gone from $2/share to $24/share in just 2 days. Not sure if it has options though.


Sent from my iPhone using Tapatalk

 

Just ran across this in the news feed. Not sure if they are the only ones or just one of many with an added press release  

 

Co-Diagnostics, Inc. to Provide COVID-19 Tests to US CLIA Labs Following FDA Policy Change

Business Wire

March 2, 2020, 5:30 am

Co-Diagnostics, Inc. (Nasdaq: CODX), a molecular diagnostics company with a unique, patented platform for the development of diagnostic tests, announced today that following a recent change to the Food and Drug Administration’s (FDA) policy towards the coronavirus outbreak, the Company’s coronavirus test kits are available to laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) for use according to the FDA guidelines.

Edited by Anastasis

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Another article. 
 

Once the test receives FDA approval, that will open up the market to commercial labs to step up and make their own versions of the test. A number of companies are already developing COVID-19 tests, including Co-Diagnostics CODX-17.11%  which this week received a CE mark in the European Union for its COVID-19 test. Maxim Group analyst Jason McCarthy writing in a note that the company’s test has “greater ease of use” than the CDC test.

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Posted (edited)

Welp - 30 minutes to go.....here is my starting point

options-03-02-20-open

 

It looks like I'm going to open at no value on any of the 3-2 contracts

 

Edited by Wally Fairway

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On 2/28/2020 at 10:27 AM, Anastasis said:

I don't pay as much attention to XOM and CVX as I use to, but are these guys looking at cutting dividends?  The yields are crazy at this price level. 

If executives want to keep their jobs, then they are not looking at cutting dividends. And if there is one certainty in markets it’s the big bosses are going to take care of themselves first and foremost. 

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More DIS and AAL puts for me today.  Also, I noticed that I forgot to do my semiannual rebalancing of my 401k/Roth that I normally do around the beginning of the year. Hurts to miss that one.

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Well time to sell the rest of my in the money 3-2 calls, as I don't want Schwab to start taking actions to protect my account, as I really don't have the cash to exercise these options and I don't want them to liquidate other investments that I currently hold (although  that might be a good thing).

So log this as another risk of options trading, not the worst day I've had in the market - but I certainly swung and missed, well maybe a bunt single or more like getting to first on a hit by pitch (so maybe I'll call it an Astros type day)

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Went back to check my math - struck out swinging, lost 100% of the 3-2 puts, and make up about 75% of the loss in the 3-2 calls.

Lesson to be learned, don't get enamored with the idea - price of near money options have risen (due to volatility) and next day options is a complete crap shoot (gambling, not investing); along with fear of broker actions and not being able to watch the market all day. 
I still think there is more pain to come in the market, but I have plenty of risk in place - so I'm going to ride my current stonks for now; lost plenty on theta today on my current puts. The aggy thing to do would be to invest in more when the market goes up......maybe later in the week, as I lose more on my hedge.

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Respect for giving us the post mortem. I actually thought of you this weekend when I heard about the deaths in the US from the virus. Thought you had a slam dunk on your hands.

 

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30 minutes ago, 936horn said:

Respect for giving us the post mortem. I actually thought of you this weekend when I heard about the deaths in the US from the virus. Thought you had a slam dunk on your hands.

hey - that's the whole purpose of this thread, it would be easy to pretend that I sold them all at the closing price, but that isn't how it worked - due to a number of reasons. "Having" to sell before the close was one of the reasons the strategy didn't playout in real life like it does in theory; SPY hovered up/down in the first hour of trading with seemingly no direction (that is the nightmare situation as it makes both the puts & calls lose value), and then the last hourish was most of the day's gains which I missed out on due to job requirements and fear of brokerage actions on expiring in-the-money calls.

while I'd like to make money on those trades, the bigger thing is to live to fight invest another day

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6 minutes ago, Rusty Shackelford said:

just follow this guy for all surly/aggy stonk tips

https://stocktwits.com/Rocko20

Step 1 (this is the most important step) - make sure you leave the price tag on your options in case the market heads a different direction than you anticipated. 

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Posted (edited)
1 hour ago, Wally Fairway said:

Went back to check my math - struck out swinging, lost 100% of the 3-2 puts, and make up about 75% of the loss in the 3-2 calls.

Lesson to be learned, don't get enamored with the idea - price of near money options have risen (due to volatility) and next day options is a complete crap shoot (gambling, not investing); along with fear of broker actions and not being able to watch the market all day. 
I still think there is more pain to come in the market, but I have plenty of risk in place - so I'm going to ride my current stonks for now; lost plenty on theta today on my current puts. The aggy thing to do would be to invest in more when the market goes up......maybe later in the week, as I lose more on my hedge.

I thought you were supposed to make mad bank whether the market went up big or down just as long as it didn't stay flat.  Are we now in an age where 4.5% on an index is considered flat?

Crap, never mind I see you had to bail before end of the day.  That sucks.

Edited by Fudge Nuggets

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God help me for going short $IWM right before the close.  No fucking way this market is done going down and I'm of the belief this is your dead cat bounce.  It might last another day or two but overall it has more room on the downside than upside.

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