The President may be heading to jail and China into the dumpster, but the market doesn’t want to trade lower. As such, one with a keen eye for preservation of capital should steer clear of selling short. This is a tape for gentlemen with cash only. If you’re the type of person to get nervous or unable to trade in rapid succession — you would be wise to avoid this tape altogether.
If you see rates moving higher, avoid gold — believe me. Also, and this is just be speaking now — fuck oil. If you want to make money trading, reduce the risk and just buy some tech.
As for me, fucking exhausted and just woke up from a nap. I have 45% cash in my trading and will buy something shortly.
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Depends on your timeframe
You specifically said each contract controls $174k of AMZN as if that’s the exposure you had and that’s why you went with calendar. Your delta is low even naked and you are not exposed to anywhere near that much stock. Reads like someone without a clue.
Each option contract *does* control 100 shares. Period.
Also, anybody with no understanding of options but with decent reading comprehension skills would have noticed the word “instead” and realized that I wanted to **avoid** exposure to $174k of AMZN. I even said I was seeking lower leverage than my typical vertical spread positions would have provided.
https://ibankcoin.com/flyblog/2019/10/04/give-dot-dot-dot-moar-fish/#comment-563870
Also, if you really knew anything about options you would have criticized the fact that I wrote my trade was “delta positive,” when I meant to write “theta positive”. (theta -> t -> time)
One last thing: WTF does “delta is low even naked” mean? I’ve heard of naked calls and naked puts, but never naked deltas. Did you mean “low or even zero”?
Lots of words and insults don’t change the fact it was irrelevant and nonsensical to reference 174k with an OTM calendar spread. Served no purpose but to sound smart which it wasn’t. I left the word “option” after naked. I was not saying naked delta. You’re grasping for anything now. Investing is about survival. I’ve been reading this site close to 6 years and have seen dozens of your kind come and go in the comment section. Know it all traders who lean bearish and try to see signal where there is noise. You will have nothing but wasted time to show for it. Best of luck to you anyway.
“Since each option contract controls 100 shares: ie $174,000 worth of AMZN, I went with a calendar spread instead of a vertical spread (ie, lower leverage). ”
Translation: Because I ***didn’t want*** a trading position controlling $100k+ of AMZN stock in my trading account, I placed an option trade that has a lower leverage than my typical option trade.
The simple matter is that neither the vertical spread nor a naked OTM put would have left you exposed to anywhere near 174,000 in Amazon stock on that day or any day that you held the position as you never would hold to anywhere near even 90 delta if even 50 delta.
If I sold a deep-OTM naked **call** option, it could have a similar theta and delta to the calendar spread, but it would tie up a lot more funds (margin requirements)
So we hit the root of the issue. Lack of funds 😀
Well, we *did* hit the root of the issues: poor reading comprehension.
Why would I **want** to tie up more funds when i can get the same exposure with less money?
Look, I don’t want to sit here waiting for your reply, and I don’t think anybody else is really interested in me repeating myslef for the third or fourth time, so I’m done with this. The last comment is yours for the taking