The bears den

[revhappy]

Did you manage to sell dec SPY 250 Put?

I am planning to do tonight. Sell 4 PUTs keep 50k SGD as margin.
The CBOE margin calculator says US$10,720 as the initial margin requirement. So there is enough cushion.

But I am wondering, is this the right time sell the PUTs or wait for more markets downside and that will give me higher premium.

Also I wonder why Dec 2019 and why not longer or shorter term. How do you decide this?

 

[DukeCS33]

Sentiment is just so bad....

Workday earned an adjusted 43 cents per share for its latest quarter, beating estimates by 2 cents a share. The maker of human resources software’s revenue come in above forecasts, as it signed up more business subscribers. However, in the premarket, it rose to 220 only to fall to 209 now, below yesterday's close at 212.87.

Looks like the market would again open gap down.
Would price action mirror yesterday's where it closed the gap first and then the real direction start thereafter?

 

[chopra]

The thing is, by the time the news is available, it is all priced in. There are so many algos, research analysts etc that there is never a free lunch. So if something looks mispriced, it just means your view is different from the consensus and it may or may not be true.

not jus from stocks. but from e view of opening a shell coy to do this

 

[theMKR]

not jus from stocks. but from e view of opening a shell coy to do this

Shell coy to trade future contracts or u will take delivery?

 

[churnmaster]

I am planning to do tonight. Sell 4 PUTs keep 50k SGD as margin.
The CBOE margin calculator says US$10,720 as the initial margin requirement. So there is enough cushion.

But I am wondering, is this the right time sell the PUTs or wait for more markets downside and that will give me higher premium.

Also I wonder why Dec 2019 and why not longer or shorter term. How do you decide this?

Selling 4 lots 250 Put means USD 100 K in notional value ... in other words, you are committing to invest USD 100 K at S&P 500 around 2500 level, if it drops to that level on expiry. If I were to sell 4 lots, it will all be on different days and different strike prices, earning different premiums. Never all buys or sells on the same day.

The initial margin that you calculated will keep on increasing as the underlying approaches your strike price. Any volatility spike will also result in higher margins.

I prefer selling longer duration however, many times there is very little liquidity and the bid / offer spread is just too wide. Pick the duration based on the bid/offer spread for a given strike price.

 

[churnmaster]

Sentiment is just so bad....

Workday earned an adjusted 43 cents per share for its latest quarter, beating estimates by 2 cents a share. The maker of human resources software’s revenue come in above forecasts, as it signed up more business subscribers. However, in the premarket, it rose to 220 only to fall to 209 now, below yesterday's close at 212.87.

Looks like the market would again open gap down.
Would price action mirror yesterday's where it closed the gap first and then the real direction start thereafter?

I would think so ... gap down below 2800, close the gap first and then close lower.

 

[revhappy]

Selling 4 lots 250 Put means USD 100 K in notional value ... in other words, you are committing to invest USD 100K at S&P 500 around 2500 level, if it drops to that level on expiry. If I were to sell 4 lots, it will all be on different days and different strike prices, earning different premiums. Never all buys or sells on the same day.

The initial margin that you calculated will keep on increasing as the underlying approaches your strike price. Any volatility spike will also result in higher margins.

I prefer selling longer duration however, many times there is very little liquidity and the bid / offer spread is just too wide. Pick the duration based on the bid/offer spread for a given strike price.

Thanks, just got my 1st trade in.

 

[lightchaser]

Thanks, just got my 1st trade in.

hi, may I ask which broker u use ?thks.

 

[coolhead]

hi, may I ask which broker u use ?thks.

interactive brokers

 

[coolhead]

guys...if S&P500 closes below 2800 today, does it mean downtrend is more likely?

 

[revhappy]

hi, may I ask which broker u use ?thks.

Interactive Brokers.

 

[revhappy]

guys...if S&P500 closes below 2800 today, does it mean downtrend is more likely?

I think it just means that 2800 then becomes a resistance and markets will find it difficult to break it to the upside.

 

[revhappy]

Traded 2nd one:

 

[revhappy]

Traded 3rd one:

 

[theMKR]

Traded 3rd one:

so u earn 800 + 800 + 600 ??

 

[revhappy]

so u earn 800 + 800 + 600 ??

Yes.Provided S&P500 doesn't go below 2600 as of December 2019. If it goes, that means I am buying S&P500 at those strike prices.

 

[coolhead]

Yes.Provided S&P500 doesn't go below 2600 as of December 2019.

ok , i dun trade options but all along I thought that your view is rather bearish.

 

[revhappy]

ok , i dun trade options but all along I thought that your view is rather bearish.

It is, which is why I chose those strike prices. But recession is not happening this year, so it is unlikely that markets will go way below those levels.

If they do go way below, I will then buy at the lower levels.

This is better than buy and hold strategy, I believe.

 

[theMKR]

i had bad experience with options, although my first 2 options did return profits, i realized i cant exercise them during pre-market which might be super lucrative

 

[SBC]

Good swing on US 2nite.