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MvR's Options Trading Thread


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I've got access to TWS, etc via an affiliate or whatever they're called.  Just stock positions ATM.  A shock.  Very old and difficult.  Take their screener - seems you have to use one of their hard coded ones.  No scope for your own.  And endless exchange fees.  Plus I could not find some LSE stocks (e.g. a small cap and Crest Interest Deposits (the ones whose tickers start with a "0").  Maybe I missing loads and need to RTFM.  But close to ditching it for a better platform.  Thinking TastyWorks for options (and international stocks?).

Edited by Harley
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11 hours ago, Harley said:

I've got access to TWS, etc via an affiliate or whatever they're called.  Just stock positions ATM.  A shock.  Very old and difficult.  Take their screener - seems you have to use one of their hard coded ones.  No scope for your own.  And endless exchange fees.  Plus I could not find some LSE stocks (e.g. a small cap and Crest Interest Deposits (the ones whose tickers start with a "0").  Maybe I missing loads and need to RTFM.  But close to ditching it for a better platform.  Thinking TastyWorks for options (and international stocks?).

Ah, watched video and found out how to create my own scans.  A bit basic though and I still need to sort out the subscriptions which look like they could get costly per month quite quickly.  Looking at the bundle for say Europe but unclear if it includes the LSE.  What subs do you use?

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21 hours ago, Harley said:

I've got access to TWS, etc via an affiliate or whatever they're called.  Just stock positions ATM.  A shock.  Very old and difficult.  Take their screener - seems you have to use one of their hard coded ones.  No scope for your own.  And endless exchange fees.  Plus I could not find some LSE stocks (e.g. a small cap and Crest Interest Deposits (the ones whose tickers start with a "0").  Maybe I missing loads and need to RTFM.  But close to ditching it for a better platform.  Thinking TastyWorks for options (and international stocks?).

Hang on in there! :)

10 hours ago, Harley said:

Ah, watched video and found out how to create my own scans.  A bit basic though and I still need to sort out the subscriptions which look like they could get costly per month quite quickly.  Looking at the bundle for say Europe but unclear if it includes the LSE.  What subs do you use?

I use these.. I don't trade on the LSE though.. just US stock options. If you look under Europe/Level I or Level II there are a couple of choices around £5-6 offering LSE.. difference subscriptions offer different degrees of access to the Orderbook. Level II etc.

You don't need to subscribe to the date to trade the market though.. If you have another source of quotes or real-time date, you could just use them for charting, prices etc.. I do the same with my IG.com spread-betting charts.. fine for me as I don't look at Level II etc.

234754509_Screenshot2020-09-19at20_32_15.thumb.png.17b7eb0f90bff49cd7788f72e6ffbdc0.png

9 hours ago, Harley said:

Flushed with success at the stock screener in TWS, I've created a nice chart screen and reconfigured the global settings for the display, etc.  TWS is indeed something you have to configure the eff out of.  Unfortunately that reminds me of SAP!

I feel your pain, but welcome the TWS platform and all it's many frustrations. The good does outweigh the bad though, as you learn more of what it can do.

I've been on exactly the same journey.  The application has barely changed since I started using in in 2005.  Once you get a bit of an idea, and have things all set up, it gets much better. At that point, stepping through the config panel methodically, playing with every setting and every feature, you'll find all kinds of hidden gems.

Personally I'd recommend opening a TastyWorks account too. You can even fund it directly from your IB account, rather than your bank, which means you benefit from the dirt cheap currency conversion in IB. 

Personally I use my TastyWorks account for speculative, often long option trades. I also use it for playing with combo and strategy ideas due to it's very slick, fast, useful interface with immediate feedback, even though I might actually enter that trade in IB.

I also use my IG spread-betting account for most of my real-time charting. No one platform offers me everything I want, except possibly ThinkOrSwim, and that's not available in the UK... Arse.

For International stocks, I'd stick with IB, due to the better reporting, and the fact TastyWorks only offers US stocks, futures and options.  As mentioned above, In IB, you don't need a data subscription to a market to trade it.

 

Edited by MvR
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I just put on a 1 contract -59p/-59c/+62c Big Lizard in Raytheon ( RTX), expiring in 25 days, and used most of the credit received to buy 3 Jun 90 calls. Trade was for a net credit of 0.5 per share or $50. Put up $1650 collateral for the short put. I'll continue to sell premium against the 3 long 90 calls, hopefully ending up with them for "free". 

Downside risk looks minimal given the chart. And if anything does kick off with China, or even rising tensions, defence stocks could spike up. 

That's about the extent of my analysis.. it's just a punt really.

1303619362_Screenshot2020-09-28at19_09_07.thumb.png.daa91eeaf8ba2cb21a931a3bd47f8218.png

404941005_Screenshot2020-09-28at19_10_26.thumb.png.1c84eeb38bf8dcbc39b4a4828751f662.png

627774148_Screenshot2020-09-28at19_09_58.thumb.png.ce133430e5f4132fdb30117896d1d514.png

158104323_Screenshot2020-09-28at19_14_06.thumb.png.89815335885e6650f53b354079da7099.png

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Another good intermediate/advanced educational resource for options trading for income..  Worth bookmarking... John Locke's YouTube channel. Depending on my trading this winter, I may take out a membership subscription for a few months on his website... never stop learning :)

https://www.youtube.com/channel/UCBPelGM62VkZMZRUfWzBWjg

 

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25 minutes ago, MvR said:

I just put on a 1 contract -59p/-59c/+62c Big Lizard in Raytheon ( RTX), expiring in 25 days, and used most of the credit received to buy 3 Jun 90 calls. Trade was for a net credit of 0.5 per share or $50. Put up $1650 collateral for the short put. I'll continue to sell premium against the 3 long 90 calls, hopefully ending up with them for "free".

 

@sancho panzaActually in hindsight, I might have been better off buying a single call closer to the money, to get more movement at the start of any up move, but the 3 high contracts give me various adjustment possibilities too. 

That's the problem with buying calls too far out of the money, they offer a nice payback and slow decay if the stock does rise a lot, but they move slowly to start with.

To contrast, my little OXY play I put on a couple of weeks ago, also a big lizard, but with an at the money call, is doing nicely, in its own little way. It's ahead of the equivalent risk stock position of 100 OXY shares. 

1526675538_Screenshot2020-09-28at19_44_56.thumb.png.c2edabb070ecaa71d2e88cb198d6d799.png

468795991_Screenshot2020-09-28at19_47_12.thumb.png.9ba4553a8e3a257f5da01ec1705dff21.png

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1 hour ago, MvR said:

@sancho panzaActually in hindsight, I might have been better off buying a single call closer to the money, to get more movement at the start of any up move, but the 3 high contracts give me various adjustment possibilities too. 

That's the problem with buying calls too far out of the money, they offer a nice payback and slow decay if the stock does rise a lot, but they move slowly to start with.

To contrast, my little OXY play I put on a couple of weeks ago, also a big lizard, but with an at the money call, is doing nicely, in its own little way. It's ahead of the equivalent risk stock position of 100 OXY shares. 

1526675538_Screenshot2020-09-28at19_44_56.thumb.png.c2edabb070ecaa71d2e88cb198d6d799.png

468795991_Screenshot2020-09-28at19_47_12.thumb.png.9ba4553a8e3a257f5da01ec1705dff21.png

As ever appreciate the learnings here M.

 

 

I've spent the day today placing some call options Mar/Apr 21.In my usual specualtive manner.I've sold up some Mosaic calls that were up 500%(which will cover some XOM calls going to zero in Jan) so I get my capital back,Nutrien $40 sold as have X $6/7 at a small loss.Decided to sit on my FCX/Alcoa some more.

Froma specualtive perspective,I'm quite happy with where we are.But obviously,on our parts we've put some recent profits on some leveraged bets but I prefer to do that than risk big with capital.This way,if the bets come off,we get a pay out.If we lose,we'll have a good bet and crucailly keep a chunk of capital back that can pursue other opportunires.Got involved in RDSB and BP as well but not as heavily.

I don't know whetehr the folowing has a name but basically on XOM for example

@$40 Apr 21  <x>

@$42.50 Apr 21 <1.5x>

@$45 Apr 21  <2x>

@47.50 Apr 21 <2.5x>

Basic premise is that if we get to $50 on XOM then the $40 get sold and I'm in for free hopefully for a ride to $60

 

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10 minutes ago, sancho panza said:

I don't know whetehr the folowing has a name but basically on XOM for example

@$40 Apr 21  <x>

@$42.50 Apr 21 <1.5x>

@$45 Apr 21  <2x>

@47.50 Apr 21 <2.5x>

Basic premise is that if we get to $50 on XOM then the $40 get sold and I'm in for free hopefully for a ride to $60

It doesn't have a strategy name, but if you're buying calls, it's a excellent learning experience as you'll see how the different strikes respond as the price moves.

If you have time to check them each night, you might find it helpful to note their prices, deltas and thetas and implied volatilities, as well as the stock price of course, every day, and then chart the results.  

It's great way to get a feel for how they respond over time. 

Edited by MvR
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9 minutes ago, MvR said:

It doesn't have a strategy name, but if you're buying calls, it's a excellent learning experience as you'll see how the different strikes respond as the price moves.

If you have time to check them each night, you might find it helpful to note their prices, deltas and thetas and implied volatilities, as well as the stock price of course, every day, and then chart the results.  

It's great way to get a feel for how they respond over time. 

Yeah I trial different possible scenarios-obviously the 100% loss is quite easyB|- and look at a range of outocmes which is why I buy in ladders.At teh extreme end the leverage plays eg BP £3.40pay out circa 50/1 but obviously more likely not to pay out at all.

Checked out OXY and PSX but they're pricey at the mo.

I try and strike a balance between leverage and getting a pay out.

I need to learn the greeks.

Edited by sancho panza
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3 hours ago, MvR said:

I just put on a 1 contract -59p/-59c/+62c Big Lizard in Raytheon ( RTX), expiring in 25 days, and used most of the credit received to buy 3 Jun 90 calls. Trade was for a net credit of 0.5 per share or $50. Put up $1650 collateral for the short put. I'll continue to sell premium against the 3 long 90 calls, hopefully ending up with them for "free". 

Downside risk looks minimal given the chart. And if anything does kick off with China, or even rising tensions, defence stocks could spike up. 

That's about the extent of my analysis.. it's just a punt really.

1303619362_Screenshot2020-09-28at19_09_07.thumb.png.daa91eeaf8ba2cb21a931a3bd47f8218.png

404941005_Screenshot2020-09-28at19_10_26.thumb.png.1c84eeb38bf8dcbc39b4a4828751f662.png

627774148_Screenshot2020-09-28at19_09_58.thumb.png.ce133430e5f4132fdb30117896d1d514.png

158104323_Screenshot2020-09-28at19_14_06.thumb.png.89815335885e6650f53b354079da7099.png

Like that graph jsut above,shows where the put/calls are nicely.

So you've sold a straddle at $59,then bouth out o the moeny call.Taken the proceeds and boutght 3 jun 90 calls?

Whats the bit in bold mean?

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47 minutes ago, sancho panza said:

I need to learn the greeks.

The main ones, delta and theta, are dead easy.

the values you see in the options chain are per share. delta will be a decimal between 0 and 1, so a 0.3 delta option moves 30 cents per dollar of the stock price move. For one options contract, representing 100 shares, this means one 0.3 delta call option increase in value by $30 when the stock rises a dollar.

Theta in the options chain will be a very small negative number, again representing 1 share. multiply this by 100 to see how much one option will decay, in dollars, in one day, all other things being equal.

Portfolio Delta and Portfolio Theta represent your whole options position, which may be multiple contracts. it can be negative or positive. So a portfolio delta of, say 30 means your options will gain value at the same rate as 30 shares of the underlying. Same goes for Portfolio Theta, so a value of -3 means means that opens position loses $3 per day in time decay.

if it's a combo position, the Portfolio Delta and Portfolio Theta represent the whole combo.

With Portfolio Delta and Theta, this represent how the position affects your actual portfolio value, so whether they are negative or positive will depend on whether you are long or short the combo.. i.e whether the combo is net long, or net short options. A net short combo will give positive Portfolio Theta, i.e you profit from time decay, and a net long combo will have a negative Portfolio Theta..i.e. it loses you money each day.

As an options seller, I like to see a positive Portfolio Theta, meaning I profit by that amount, in dollars, each day, all other things being equal.

So in this case my Sept 30 SLV Big Lizard currently moves like 98.032 shares of SLV, and generates just 80c profit in premium decay. 

1459630372_Screenshot2020-09-28at22_16_25.thumb.png.b176cd970c19b6e3f20d24ad43728901.png

Note the position description on the left. It describes the combo as long a 25 call and 25 put, and short the 27 call, and the position column indicates I have -1 of these. i.e. I am short a long Big Lizard. You can flip this over, by right clicking the position and selecting flip combo from the menu. You would then see the same position described Long a Short combo instead, but since its the same thing, displayed differently, The Portfolio Delta and Theta would stay the same.  It just depends which way round makes most sense to you.

Edited by MvR
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36 minutes ago, sancho panza said:

Like that graph jsut above,shows where the put/calls are nicely.

So you've sold a straddle at $59,then bouth out o the moeny call.Taken the proceeds and boutght 3 jun 90 calls?

Whats the bit in bold mean?

Yes, thats right. The short Straddle, plus the long call just above it form the Big Lizard. this netted me around $3 per share, or $300, and I spent about $250 of that on three long June 90 calls. I tend to close out Big Lizards when they reach 1/4 to 1/3 of their maximum profit.. in this case $75-$100 profit, and put on an new one for a further out date. Once I've done that a few times, I've paid for the long June calls.

You can see a similar chart in IB by right clicking the position, or your order for a position, and selecting Performance Profile.  There is also a Profile button in the Strategy Builder tab on the Options Trader panel. 

The solid line shows the P&L at expiry, and the dotted line shows the P&L at the selected date.. defaulting to today's date.

1881559747_Screenshot2020-09-28at22_31_54.thumb.png.d7299c6c9564e10c61423bd9ce5c71a6.png

807117729_Screenshot2020-09-28at22_30_46.thumb.png.fc0a03aaf07821f982ed44704fa2a24a.png

Edited by MvR
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18 minutes ago, sancho panza said:

Whats the bit in bold mean?

Not sure what you mean.. which bit in bold?

Edit : ah.. sorry I see what you mean.

Basically I hope to make a profit on the big Lizard portion of the trade. This part expires in 25 days, so depending how the stock price moves, I'll either let it expire,( or close it out ) and then sell another big lizard, or maybe a call or put or straddle for the next week, or month, or whatever... anything where I'm basically short options, therefore profiting from time decay. ( i.e. my Portfolio Theta for that part is positive ). I have until June to keep doing this, hopefully recouping the whole $250 a spent on the 3 Jun calls.. thus making them "free".. as it were.

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Filled in my details at TastyWorks this evening.  Need to upload a passport and a document with my address, for which I'll have to go see my local copy shop and get them to scan them to electronic for me.  Do that tomorrow, maybe.

My intention is to try some long call options, similar to Sancho P's XOM trade, (from his post 22 hours previous to this),
Except I'll be sticking to precious metal miners.  I've previously stuck to owning shares in these same miners, and think I'm getting a feel for them.

Just gonna go with $1000 to play with, and all my other investments are in an ISA and wage income under PAYE, so not too worried about CGT as I'm unlikely to hit the threshold.
Does anyone know if I have to submit a tax return if I had a positive return lower than CGT threshold?

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  • 3 weeks later...
1 hour ago, Harley said:

Any recommendations for an options broker.  TastyWorks seem to be a dud.

Interactive Brokers is great for options. You just need to activate permissions.  If you don't have the options trading experience they require, and don't want to lie ( they don't check), you can do a quiz to show you understand how they work.

I don't know of any other decent ones for UK traders though there may one or two.  What's the issue with TastyWorks?

Edited by MvR
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On 29/09/2020 at 21:09, Bricks & Mortar said:

Filled in my details at TastyWorks this evening.  Need to upload a passport and a document with my address, for which I'll have to go see my local copy shop and get them to scan them to electronic for me.  Do that tomorrow, maybe.

My intention is to try some long call options, similar to Sancho P's XOM trade, (from his post 22 hours previous to this),
Except I'll be sticking to precious metal miners.  I've previously stuck to owning shares in these same miners, and think I'm getting a feel for them.

Just gonna go with $1000 to play with, and all my other investments are in an ISA and wage income under PAYE, so not too worried about CGT as I'm unlikely to hit the threshold.
Does anyone know if I have to submit a tax return if I had a positive return lower than CGT threshold?

It's not just the CGT gain that determines the need to report but also the value of proceeds (above some level).  Either can trigger a reporting requirement.  Plus can be a good idea to file losses for a future offset against gains?

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