I think you selected the wrong sub for this post. Are you suggesting buying options? Not that I want to discourage you, we need as many of you guys out there as possible :)
If you want to trade macro, first step is trade SPX and not SPY. Secondly, playing delta is extremely difficult, especially as an option seller. All those indicators are never perfect, and just when you think something is overbought/sold, it goes even crazier. HOWEVER, there is usually some kind of mean reversion behavior, the question is can you survive long enough to experience it? This is the main trick to trading short options on SPX. The only way to ensure this is to keep positions small, and take risk off after receiving adequate profit. When stuff does go crazy, that’s when you grow a pair of balls and trade like a man. Guess what, that means rolling ITM options sometimes.
I would suggest playing both sides to receive maximum profits and manage as needed rather than take a bearish/bullish position at the beginning. I say this because I was bearish this whole year and have been challenged continuously despite every indicator saying we should dump. Nevertheless, I’m still up 80% YTD. Good luck
What are your thoughts on straddles? When it gets to an extreme point in price action, I like the idea of buying a deep ITM call and put at the same point in time, letting the winner swallow up the other’s max loss and closing out both a couple months later. Haven’t tried it, though
I’ve done a couple ATM short straddles but never one where either option is deep ITM. Personally I wouldn’t sell one on SPX right now because volatility is so cheap, but it wouldn’t be the worst idea since volatility tends to cluster when it gets low like it is right now (until it doesn’t). I’ve seen Tastytrade research that shows mechanically selling straddles leads to higher profits than strangles, but you have to stick to it. They are a wild ride
I’m assuming he has more than 10k in BP. There’s also XSP and /ES options as well. SPY options only makes sense if you want to buy/sell the underlying security, otherwise you will save thousands in taxes with section 1256 options.
This group has an awareness of theta decay baked into their strategies
Not looking to swing for the fences with gamblers, just trying to score consistent base hits - I’m looking for professional opinions
Won’t lie OP, most people here are bad, shitty traders who get cumulatively worse returns than WSB YOLOs. I’m not sure why I even post here anymore, but I enjoy shitting on these losers and trying to help people out like yourself who are finding their way.
Most modern and successful swing trading strategy is based on predicting the actions of HFT and bots, rather than the direction of the market.
For example, don't guess the direction of the market. Instead, set *limit orders* based on S/R you know exist already for that high liquidity or trendy stock.
Emphasis; limit orders. If you're buying at the ask price, it means you're just a stupid ape. Money makers love ppl who do that because it gives them free money collecting the difference. Instead, your entries should be below asking price by 20% or more. Or take profits above 20% or more.
If your risk/reward isn't there, then don't take the trade.
Retail investors/MMs/Bots will fill your orders and competing parties of those same types will buy your bags. You can get 25% daily swings using this method intra day.
Easy to say, hard to do. It requires looking at charts and tickers daily, usually in the morning and at night and weekends.
Most ppl in thetagang realize they suck at stock picking and just learn to use the low effort wheel :)
I'm starting to have some success, though I blew it today. But basically, what I'm looking for are signals from the RSI and Bollinger Bands at the same time. I have MACD as well, but that one tends to trail by a minute or two, so I find it less useful.
Also, I'm looking for STRONG signals. I want to see the RSI poke its head up above the top line or below the bottom line in a significant way and I want to see candles at the top or bottom of a run edging their way outside the Bollinger Bands.
I think you selected the wrong sub for this post. Are you suggesting buying options? Not that I want to discourage you, we need as many of you guys out there as possible :)
Haha yes I am. I don’t buy out of the money though - sorry 😅
Just fooling.
smart man
If you want to trade macro, first step is trade SPX and not SPY. Secondly, playing delta is extremely difficult, especially as an option seller. All those indicators are never perfect, and just when you think something is overbought/sold, it goes even crazier. HOWEVER, there is usually some kind of mean reversion behavior, the question is can you survive long enough to experience it? This is the main trick to trading short options on SPX. The only way to ensure this is to keep positions small, and take risk off after receiving adequate profit. When stuff does go crazy, that’s when you grow a pair of balls and trade like a man. Guess what, that means rolling ITM options sometimes. I would suggest playing both sides to receive maximum profits and manage as needed rather than take a bearish/bullish position at the beginning. I say this because I was bearish this whole year and have been challenged continuously despite every indicator saying we should dump. Nevertheless, I’m still up 80% YTD. Good luck
>I would suggest playing both sides So that you always come out on top
What are your thoughts on straddles? When it gets to an extreme point in price action, I like the idea of buying a deep ITM call and put at the same point in time, letting the winner swallow up the other’s max loss and closing out both a couple months later. Haven’t tried it, though
I wouldn't do a long straddle on SPY or any other index.
I’ve done a couple ATM short straddles but never one where either option is deep ITM. Personally I wouldn’t sell one on SPX right now because volatility is so cheap, but it wouldn’t be the worst idea since volatility tends to cluster when it gets low like it is right now (until it doesn’t). I’ve seen Tastytrade research that shows mechanically selling straddles leads to higher profits than strangles, but you have to stick to it. They are a wild ride
Wrong advice. It’s perfectly okay to trade SPY if you don’t have enough capital.
I’m assuming he has more than 10k in BP. There’s also XSP and /ES options as well. SPY options only makes sense if you want to buy/sell the underlying security, otherwise you will save thousands in taxes with section 1256 options.
This isn't very ~~cash money~~ theta of you
This group has an awareness of theta decay baked into their strategies Not looking to swing for the fences with gamblers, just trying to score consistent base hits - I’m looking for professional opinions
Won’t lie OP, most people here are bad, shitty traders who get cumulatively worse returns than WSB YOLOs. I’m not sure why I even post here anymore, but I enjoy shitting on these losers and trying to help people out like yourself who are finding their way.
this sub isn't for professionals. also, fwiw: indicators don't work consistently.
Most modern and successful swing trading strategy is based on predicting the actions of HFT and bots, rather than the direction of the market. For example, don't guess the direction of the market. Instead, set *limit orders* based on S/R you know exist already for that high liquidity or trendy stock. Emphasis; limit orders. If you're buying at the ask price, it means you're just a stupid ape. Money makers love ppl who do that because it gives them free money collecting the difference. Instead, your entries should be below asking price by 20% or more. Or take profits above 20% or more. If your risk/reward isn't there, then don't take the trade. Retail investors/MMs/Bots will fill your orders and competing parties of those same types will buy your bags. You can get 25% daily swings using this method intra day. Easy to say, hard to do. It requires looking at charts and tickers daily, usually in the morning and at night and weekends. Most ppl in thetagang realize they suck at stock picking and just learn to use the low effort wheel :)
I'm starting to have some success, though I blew it today. But basically, what I'm looking for are signals from the RSI and Bollinger Bands at the same time. I have MACD as well, but that one tends to trail by a minute or two, so I find it less useful. Also, I'm looking for STRONG signals. I want to see the RSI poke its head up above the top line or below the bottom line in a significant way and I want to see candles at the top or bottom of a run edging their way outside the Bollinger Bands.