The bears den

[Pesantkie]

Buy progressively when VIX is high.

Hold or sell progressively when VIX is low.

You will never be wrong.

Not the opposite? Not so sure please enlighten us.

Posted from PCWX using ONEPLUS A6000

 

[netzach]

Buy progressively when VIX is high.

Hold or sell progressively when VIX is low.

You will never be wrong.

Ya man. I’m also trying to buy when the VIX is high lol but quite scared haha. Last October/December was the best periods man lol

לֵב HardwareZone Forums app

 

[DukeCS33]

Just scalped a breakout stock in KN- it was breaking new high even when the SP / Nasdaq index and sector index were all trading in the red. This was a technique that I used to scalp intraday - searching for stocks breaking new highs or lows, and in contrast with the main indices. That was the main idea but the details lie in filtering the right stock and only hitting it when all the conditions are ideal.

 

[Mecisteus]

Not the opposite? Not so sure please enlighten us.

When VIX is high, it means there are a lot of selling and fear. Chances are the market has corrected and prices are low enough. You should be buying.

When VIX is low, it means there is a lot of greed. Chances are market are peaking and prices are high. Just hold or sell some.

 

[Pesantkie]

When VIX is high, it means there are a lot of selling and fear. Chances are the market has corrected and prices are low enough. You should be buying.

When VIX is low, it means there is a lot of greed. Chances are market are peaking and prices are high. Just hold or sell some.

Oh wait you mean the buying progressively is buying of stocks? I thought you are referring to buying up VIX when it is at its high haha.

Posted from PCWX using ONEPLUS A6000

 

[Mecisteus]

Oh wait you mean the buying progressively is buying of stocks? I thought you are referring to buying up VIX when it is at its high haha.

Yeah I mean buy stocks or ETFs.

 

[revhappy]

I find this interesting, most years markets are just flat, even though there is volatility, it is only those one off years like 2017, where money is made.

We could master PUT options selling and generate income while staying out of the market and wait to get assigned at lower levels. I think 10% lower than spot and 2 months away is a good choice of PUT.

Last time I got cold feet because I sold too many PUTs like Churnmaster said. This time I am going to experiment with only 1 PUT. So I have just sold Dec 2019 SPY 270 PUT and I received $177. Let's see how this goes.

 

[DukeCS33]

I find this interesting, most years markets are just flat, even though there is volatility, it is only those one off years like 2017, where money is made.

We could master PUT options selling and generate income while staying out of the market and wait to get assigned at lower levels. I think 10% lower than spot and 2 months away is a good choice of PUT.

Last time I got cold feet because I sold too many PUTs like Churnmaster said. This time I am going to experiment with only 1 PUT. So I have just sold Dec 2019 SPY 270 PUT and I received $177. Let's see how this goes.

Are you hedging your bet against Mike by putting this position on?

 

[revhappy]

Are you hedging your bet against Mike by putting this position on?

Haha,

Another thing I noticed, call premium is much lower right now than put premium. For example, December 2019, SPY 330 call is priced at 0.12 while 270 put is priced at 1.8. So markets are pricing in a much higher probability for a 10% down move than a 10% upmove.

 

[DukeCS33]

Haha,

Another thing I noticed, call premium is much lower right now than put premium. For example, December 2019, SPY 330 call is priced at 0.12 while 270 put is priced at 1.8. So markets are pricing in a much higher probability for a 10% down move than a 10% upmove.

It does not necessary mean that the markets are pricing in a much higher probability for a down move vs an up move if the puts cost more than the call. It merely reflects the demand for puts. Demand for puts could mean that a trader is positioned by being long the index, expecting upside. At the same time, he is buying a put to protect his position. When the price of puts rises, it means that he is more afraid of a downside move - it does not reflect that his view is for a downside move. There is not any predictability in risk reversals otherwise, one can simply trade based on where the risk reversals are pointing.

 

[Mecisteus]

Last time I got cold feet because I sold too many PUTs like Churnmaster said. This time I am going to experiment with only 1 PUT. So I have just sold Dec 2019 SPY 270 PUT and I received $177. Let's see how this goes.

Is $177 worth it for your level of networth?

 

[revhappy]

Is $177 worth it for your level of networth?

This is a learning phase for me to build my tenacity. I am thinking very long term. I want to master this technique. When I retire I can use it for passive income.

 

[limster]

This is a learning phase for me to build my tenacity. I am thinking very long term. I want to master this technique. When I retire I can use it for passive income.

Those who are able to practice long term thinking are usually more successful at anything they do compared to the short term thinkers.

 

[peipei1]

https://www.bloomberg.com//news/art...107-758-on-two-options-trades?srnd=markets-vp

Options appears quite a useful skills to pick up!

Do you think it is smarter to use options than individual stocks picking?

Im going to ask in ST thread!

 

[Mecisteus]

This is a learning phase for me to build my tenacity. I am thinking very long term. I want to master this technique. When I retire I can use it for passive income.

Shiny will remind you that

Selling puts for income is like picking up nickels in front of a steam roller.

 

[revhappy]

Shiny will remind you that

Selling puts for income is like picking up nickels in front of a steam roller.

It is a tool, it depends on how you use it. In my case, I am under allocated to stocks. I take only short PUT position in instrument which I am prepared to buy anyways. Also this is a cash covered PUT. So I have the cash to take delivery of the position.

The analogy of picking nickels in front of steam roller is for people who do it aggressively without having a plan B.

 

[revhappy]

https://www.bloomberg.com//news/art...107-758-on-two-options-trades?srnd=markets-vp

Options appears quite a useful skills to pick up!

Do you think it is smarter to use options than individual stocks picking?

Im going to ask in ST thread!

It is not smarter. It depends on your style. If picking stocks is your thing, then do it. If you understand how options work the risk and the reward, then do it.

In my view, selling cash covered PUTs is a middle of the road strategy between staying in cash vs being fully invested. Selling cash covered PUTs worst case is scenario is slightly better than buying the underlying stock at a slightly cheaper price and best case scenario is you keep the small premium that you get, which is better than staying in cash.

 

[candy crush]

Guys what is your opinion about the tech company "slack"?

can buy?

https://finance.yahoo.com/quote/WORK?p=WORK

 

[DukeCS33]

It is not smarter. It depends on your style. If picking stocks is your thing, then do it. If you understand how options work the risk and the reward, then do it.

In my view, selling cash covered PUTs is a middle of the road strategy between staying in cash vs being fully invested. Selling cash covered PUTs worst case is scenario is slightly better than buying the underlying stock at a slightly cheaper price and best case scenario is you keep the small premium that you get, which is better than staying in cash.

There is no edge in this strategy of selling puts. Often, you think that you have picked a good key support level but when you get exercised on, you often end up holding a stock that has crashed through the support level. Many who adopt this strategy think that it is a good way to get vested and get paid but the ugly truth is that when you end up holding the stock, you could have been in a very negative position. I am not even getting in valuation and the "optically" correct way of selling options. Please do not get into options on a systematic basis unless you have learnt the intricacies of option pricing and how to manage an option portfolio. How do you properly assess the risk reward without even knowing a fair value of the option and how its value changes when parameters change during the course of its life? Fair value is not the price that you get when you key in the parameters into the platform and you get a price. If I can get a tighter price than what you get, is my price fair value and your "platform" fair price looking relatively less fair then? There are a lot more considerations than just wanting to own a stock at a particular lowered price and getting paid for it. And when these considerations get taken into account, the strategy may not look that great after all.

 

[revhappy]

There is no edge in this strategy of selling puts. Often, you think that you have picked a good key support level but when you get exercised on, you often end up holding a stock that has crashed through the support level. Many who adopt this strategy think that it is a good way to get vested and get paid but the ugly truth is that when you end up holding the stock, you could have been in a very negative position. I am not even getting in valuation and the "optically" correct way of selling options. Please do not get into options on a systematic basis unless you have learnt the intricacies of option pricing and how to manage an option portfolio. How do you properly assess the risk reward without even knowing a fair value of the option and how its value changes when parameters change during the course of its life? Fair value is not the price that you get when you key in the parameters into the platform and you get a price. If I can get a tighter price than what you get, is my price fair value and your "platform" fair price looking relatively less fair then? There are a lot more considerations than just wanting to own a stock at a particular lowered price and getting paid for it. And when these considerations get taken into account, the strategy may not look that great after all.

I am selling PUTs on SPY and that too at 10% lower. If I get assigned it is good. My allocation to stocks is very low, so I will buy SPY and hold it until it recovers. I will sell only 1 SPY PUT and not 10. So I have enough fire power to sell more PUTs if and when SPY falls.

You have to agree, that this is less risky than being outright long in SPY.