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Do you have a video talking about managing butterflies -- when, and at what levels? I feel like whenever I put them on, they don't really go anywhere. But you're using a much longer time frame, which is why I'm curious about it.
@elroy - thanks for asking but the answer is hours long unfortunately. In fact, I put together a Deep Dive Butterfly class that is roughly 10 hours to cover all of the aspects of butterflies such as the best conditions to enter them, when not to enter them, about 5-7 down adjustments depending on how far you are into the fly (DTE wise) and volatility wise and about 4-5 up adjustments. Here is a link to see more about that class: members.sjgtrades.com/offers/xoYU3E2L/checkout
Hey Steve, This is Kerry ( I'm a guy ). Thanks so much! Didn't expect you got into my request so soon. Completely surprise you caught me so quickly. Anyways! Since I'm a small time trader. It would require a tremendous of capital (As you're using AAPL for example). I'm very reluctant using margin. I think to trade PMCC. You would need to play high price blue chip stocks. I'm sure smaller individual stocks work. Again I don't have the require cash to pull off these kind of trades. All I been frequently doing is putting on regular conventional covered calls. Mostly on 20 or < price stocks. Also I'm doing selling puts and don't mind owning those shares. If I get assigned. No big deal, then sell covered against it. Repeating the process. I do know the risk and it can backfire. Already happened to me. It's okay, this is what trading is all about. I continue to learn and grow from these silly mistakes that I'm making. After watching and bingeing numerous videos on option trading. Pick up a few pointers here and there. Particularly I'm endeavoring/ understanding the gamma squeeze, how are these market option dealers hedging their trade which in turn can make stocks run up or down, seeing the gamma flip. Of course you would need a sophisticated option software program that can be monthly costly. Playing the option market carries many unknown variables, probabilities, variables and so on. With all that said, the ability to read the market trumps over all with what I have concluded. Because if you're fairly accurate (75%) in reading the market then you can implement your strategy accordingly. I personally think reading the market is the most crucial aspect of trading. Everything else will naturally fall in place. Maybe when I accumulate enough capital. That I can effort to pay you have a one on one coaching with you in the future. Again, thank you!
Appreciate the transparency. Much practical knowledge gained through honest review of trades that go against you. Glad it'll still be a profitable long term trade for you.
Back when I bought NVDA I felt it was undervalued after some fundamental research. I NEVER expected a run like this, but sometimes it works out - and YES, this is a Bear Call Spread I added to the trade.
The thing with biotechs is that you have to catch 'em right when they're starting to move up, and get out a couple minutes before everyone else does. Don't try to get greedy. Just take the money and run.
As a beginner, it's essential for you to have a mentor to keep you accountable. I suggest Miss Hattie Glover is extremely good on that. She is really good at what she does, Now I can pay so many bills because of her help.
Is options-alpha a broker, if not, do they link to my broker which brokers do they link to in general and then if so, does it do a robo trading if it links to the broker?
No - OA is NOT a broker, but they connect directly to a host of brokers including Schwab, Tradier, Tasty, TradeStation and I think some others - and YES, once you set up your trading method, it will fire out all of the entry and exit orders per your instructions and report back fills. You don't even need to have your computer on as everything is cloud based. If you want to try it out - just use this link: referrals.optionalpha.com/OptionAlpha_SJGTrades
I personally had some issues with ONE and their management team and I have not used it for 2-3 years now, so not sure, but I don't think so. However, I switched to OTA (OptionTradersAssistant) that you see in this video and it is AWESOME and YES, it integrates directly with TOS and a number of others. If you want a free trial of OTA and to bypass their wait list - use this link: app.optiontradersassistant.com/ota/register/P-4-E3E-3J7
Hey Steve, I think my go to option strategy is going be butterflies whether calls or puts. more likely tilting to the call side. My question is.... What would be the ideal time frame. 30 days, 45, 60, or less/more? I like the risk reward ratios. What are your thoughts?
Kerry - There is not one simple answer to that question as it largely depends on volatility and market expectations. IF you think the butterfly is the trade for you (like I think it is for me), I would suggest that you seriously consider taking the Deep Dive Butterfly course to get roughly 10 hours of key content to help you understand the best times/conditions to put on the butterfly. What are the pros/cons of shorter/longer dated flys. When to trade "light" and when to "Back up the truck and Load up", a deep look at 6-8 of the most common downside adjustments and 4-6 of the most common upside adjustments. members.sjgtrades.com/offers/xoYU3E2L/checkout Please understand that I don't just randomly push my classes on people, but given that you are asking great questions and have a strong interest - I do think this is something you should consider.
Steve can you do a tutorial on poor man's covered call. There are many videos out there. Still not registering! What baffles me is you suppose to purchase a deep in the money with a delta 85-95. Let's just say 60 days out. Then you proceed to sell an option call just slightly above the market price within 30 days out. Can you elaborate why such an gap difference? And can you also explain how is it compare to the real covered call strategy. Thank you in advance.
@@sjgtrades I also try building this strategy on basic optionstrat. But couldn't structure it. Do you need to pay for premium which includes all the bells and whistles to access this structure strategy?
Keep in mind that my original premise here is that I wanted to own the stock for a long term buy and hold, so assuming that nothing has changed with that premise, YES, I would accept assignment and then start the second phase of selling calls against those long shares taking in yet more premium.
Glad to come across this channel. I can absolutely vouche the Spx Bwb structure as bread and butter. Been doing the 60-50 wing widths for a while since that is what gives neutral to positive delta in this current market.. Believe it or not 60-40s were the structure just right before 2018!
As much as I like this trade, I would be shocked if NVDA is not much higher from here when earnings arrive. Thank you for the video, I really enjoy your content
Thank you for making the video. I have a subscription to OptionStrat, but I rarely look at option flow. QQ: Could the Buy $40 Call be the long leg of a call credit spread? Or do large institutions even bother with spreads? Thanks again for the video.
@quinnsmith4736 - there will surely be some adjustments that will be taking place during the life of this butterfly, but if you want to really take a deep dive and understand a wide range of downside adjustments and upside adjustments, as well as the best conditions for entering a butterfly trade to begin with, check out my deep dive, butterfly class that spends hours going into all of these various considerations, as I think you will find it in valuable as you advance your trading career: members.sjgtrades.com/offers/xoYU3E2L/checkout
Kevin - while I certainly appreciate constructive input - I am not sure what the issue is here - In an effort to learn and try to improve my teaching skills, I did replay this video and I said "If you will" one time, early on in a 16 min presentation - if you find that problematic and you take away no value from my videos, I just may not be the teacher for you.
Great content and very well explained, Steve! Is this a fairly new feature in OptionStrat? I don't think it previously had the ability to manage multiple adjustments. Thanks!
There is no risk-free strategy that will guarantee a gain, just as there is no free energy device. Even bonds are risky, just in a different way. To achieve a gain, you always have to accept some risk, and the only thing you can control in trading is the risk.
I am not sure what you are asking for and I think "Kex" response below nailed it! I was able to open a NO RISK OF LOSS trade on DJT a few weeks back and maybe that is what you are referencing and you can see that video here - but even that trade did have some directional loss risk while I was waiting to fill BOTH sides of the trade separately: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-8FEZFRiSLos.html
Hey Steve, I have a small RU-vid channel like yourself and I just got started with Option Alpha. I was wondering if Option Alpha charged you anything extra for commercial use, or if they're just happy with the extra product exposure on RU-vid.
Hey Steve - Can you elaborate on the range slider and implied volatility. How do you determine what range it should be? Can you do a video on long and short butterfly strategies. The risk reward ratio is consider rewarding and fairly conservative. What are your thoughts? Thanks again for this video!
Kerry - I would suggest you go through the 3 tutorials under the tutorials tab at the top of the OA home page as it will take you through all of this - and I made a note to work out a future video on Long vs Short Butterflies.
If you are referring to the DJT trade, it expired last Friday and DJT, was well below the butterfly, BUT because of the entry it would have still closed out at a small profit after your broker settled it all out.
It seems with NVDA (and QCOM, and now AVGO) the recipe is buy stock (or calls) and don't cap the upside! I've had to buy back calls on NVDA plenty in the past couple of months to keep the shares, but each time rewarded me with more gains. I'm finally getting to the point that covered strangles might be a reasonable way to bring in income... Best wishes, Steve!
Thanks Mike - I have been doing the same on NVDA, AVGO, MSFT, COST and now AAPL in recent weeks. I have gone to playing with selling covered SPREADS instead of just short calls so that if these rip up too much, I am at least controlling the upside risk a little more.
Many years ago, I was a very active day Trader, but it just simply is not an area. I am well-versed in anymore at this point as I just don’t like to sit in front of a screen all day. The gamma in a zero DTE butterfly simply moves the PNL around Way too much to leave it unattended for an hour or two and I just have too much other stuff I like to do during the day.
Thank you for your interesting videos, and for your understandable english. I have been working with options for three years and my problem is volatility. More I deep in this concept, more confuse I am... probably I need more time and more help.
Yes - trading options can be like 3 dimensional chess because IV/Volatility plays a HUGE role in options pricing. If this is something you wish to explore further, my Deep Dive class go into this extensively and shows WHEN and HOW to take advantage of IV to put trades more in your favor when the time is right: members.sjgtrades.com/offers/xoYU3E2L/checkout
I am considering several services, yours looks interesting as you actually put the trades out there. My question regarding the adjustments, in the backtesting I have done on ONE, sometimes the bid/ask is huge. Like a range from 76.00 to -76.00 obviously with a midpoint of just a few cents. This would be for options that are deep ITM and need to be rolled. How likely is it that the midpoint or something within .20 to .25 of midpoint is actually filled to accomplish the roll? $1 or $2 dollars on the midpoint will make a huge difference in the real outcome.
I am not sure what you would be looking at that would have as wide of a bid ask as you are referencing as I have never seen anything like that before. Of course the spread will depend totally on the liquidity of what you are trading and I largely stick with SPX which is highly liquid, but bid ask spreads can be $1-$2 wide there at times too. That said, I am trading 30 - 90 days out in most cases and I will have orders that could set there for days or weeks until they fill, I am patient and will wait to get my price. I am usually out of these trades long before expiration, so am virtually never in a position where I have to CHASE or accept a bunch of slippage to get filled. I hope this answers your question.
Hi Steve, I'm not sure who your broker is, but I was setting up a butterfly on OptionStrat and simultaneously on thinkorswim. They are both supposedly real-time, and both use the Bjerksund- Srensland option pricing model ... but the Deltas weren't the same, and in some cases not even close. Have you experienced this? I'm going to try again tomorrow, but I'm a little concerned since I use Delta often in my trading plans.
That was a great explanation and easy to understand, I do worry about having to roll and adjust butterflies. I was going to try your service, but worried wether I could keep up with you rolling and get the orders filled at the same prices as you.
@@OldWinchy - thanks so much for the kind words - and while there is of course no guarantee, my trading style is NOT a fast trading style and in many cases I float an entry or adjustment order out there that may sit for hours or in many cases days before being filled and as such, this is NOT like day trading where you have to jump on an order the second it is put out. If you are not familiar with butterflies, I might also strongly suggest considering my deep dive butterfly class as well: members.sjgtrades.com/offers/xoYU3E2L/checkout
Question : when you onw a stock then you sell a call against it and then the price goes way above the short call strike, you will be called away of course, but actually, do you keep the premium of the call you shorted or not ? Thanks for your light on this
Gilles, first of all, I would like to point out that you don’t necessarily have to let your stock get called away from you as you can always either close the short call position, or roll it out further in time to potentially prevent assignment. But to answer your question, yes, you do get to keep the premium that you took in when you sold the call and of course, this lowers your cost basis in your long stock position. If you have an interest in seeing this entire process in action from start to finish, I am actually adding this as one of my standard trades that I will be doing in my community/alert service going forward. I will be starting the process of showing how I select an underlying stock that I want to own for long-term and then how I go through the steps of selling puts to enter a long stock position, and then of course, selling short calls against that position to further lower my cost basis. If you would like to see how this is done live, in real time, go to this link to explore further: www.sjgtrades.com/community
Gilles - you don't HAVE to let your stock get called away, you can always close your short calls or roll them out in time if you want. But to answer you question - YES, you keep all of the premium you took in and it will lower your cost basis in the stock. Next week I am going to start the process of the trading the WHEEL in my LIVE TRADING community/Alert service - if you are interested in checking it out - click here: members.sjgtrades.com/offers/LFLLF9oy
If you have signed up for the platform, you can go into the community and see all of the shared bots, people’s comments on them, for some insight into what they are designed to do - but with ANY bot or trading system, ALWAYS test and paper trade first.
