Appreciate the lessons from real trades, real thoughts and decisions, and the good and the bad of a trade. Not often you find that here. Really helpful.
I dont mean to be offtopic but does any of you know of a way to get back into an Instagram account?? I was dumb lost my account password. I appreciate any tricks you can offer me!
Thanks again for this trade idea...got me started into options. Just sold 1 leg of the put for a profit and the call option is near the money. Been doing more vertical spreads and iron condors since this video. - Former MM CFA student
All the tools here are available, but I didn't think to execute until watching this video Mark. Agree with your points in the other economics video, I have been fearful of a few other catalysts such as resurgence/2nd close down, exploding debt, and a 2nd oil run down for the July contracts. Your video was a sobering one that helped with cutting through all the noise. Finally, I agree with your view around the SPY range for the next few months, no one knows what the stock market will do, but it made sense to me given the earning multiple projected. My only thought is why the September contracts and not the August contracts? a resurgence is more likely in the fall, in addition, the August contracts should have less theta decay, will have to view the quotes to see, but that's the initial thought.
September will actually have less theta decay than August. Theta decay speeds up as expiration nears. The closer expiration is, the higher the decay. I think August will be under pressure from Q2 earnings, September may have more optimism. Or I could be completely wrong.
Great walk through and congrats on the big payday, Mark! Love the idea of financing your calls by selling puts. Do you try and sell the puts on downtrending days with higher implied volatility for more premium, and then turning around and buying the call for cheaper? My only concern would be the geopolitical fallout vis a vis China. But as Mr. Buffett said yesterday, don't bet against America!
I typically get all legs at the same time if that is what I want. I have in the past sold puts on their own and then stepped into a spread as an afterthought. But if I want a risk reversal, I will not speculate on the direction to attempt to maximize the option premiums.
Hey Mark, I was wondering if you could do an update on these SPY positions considering we have now breached 350. I (and I am sure many others) would be very interested in knowing your thoughts on this rally and the drivers behind it. For example would you interpret the FED's recent change of policy goals regarding inflation as a strong signal that they are willing to print even more if necessary? As I see it, it would give them the option to keep the presses running even if it were to push inflation above 2.0%. Would you think about closing out and rolling forward the risk reversal to capture theta now and risk a higher break even point with higher short puts? Also we are moving to cooler periods in the N hemisphere, which, we're told, can exasperate the corona situation, but on the other hand there is talk about the FDA fast tracking vaccines, so difficult to judge where that will move the market as a whole. And then there's the elections in November, which we would also expect to move the market.
Long position - I bought the call, not sold it. I have the right to exercise, not the other side. I would not exercise though, I would just offset and cash settle.
Hi Mark, just to make sure I have the math right. You are only long 800 shares (8 contracts) @ $294? Because volatility has fallen, premiums have fallen so you need to double up the puts @ $240 to finance the call at the price you want, and are comfortable having the 2 puts * 8 contracts = 1600 shares put to you at $240. Thanks!
@@MarkMeldrum If a scenario of $220 plays out by the expiration date of September, and you would have to pay the losses on the put option you sold, would you be buying the ETF at $220 as a long-only position and let it play out in long term? Or would you only accept the loss of your trade?
Hi Mark, Thanks for the video and strategy walkthrough. I am wondering what broker are you using to execute these trades? As in theory, it's a great risk reversal strategy but most brokers will not pay-up the premium upfront on a short put or they would call a margin that exceeds the short premium hence making the strategy difficult to execute. Thanks and would appreciate your suggestions
It is currency hedged for you. So it will track the domestic return of the SnP. So the index could be up 1%, and the CAD up 1%, and the ETF will show 0% return.
@@MarkMeldrum thanks! these day's its tough to form a view on how the rate could change, but as i cant see canada's economy or dollar strengthening much relative to the US under justins reign i'll probable keep using spy or ivv. more options anyways
What other options are there for retail investor to buy those stocks presented to you that do not require cash on hand? (Not counting closing the position which would crystallise the losses) On a side note - appreciate the content very much! Has been a great guidance to understand these turbulent times better.
