Trade idea
SPX put position
the speaker believes the move will be outside of the expected move
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Strategyput position
Assetindex
Entry / triggerif the expected move is 20 bucks
Target / exitmove outside of the expected move
SpeakerTom
Risks- the move could be within the expected range
Trade idea
PALANTEER call spread
the move has already happened
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Strategycall spread
Assetequity
Expiration135
Time horizonshort-term
Entry / triggervolatility is high
Target / exit146
Invalidation / stopafter an up move
SpeakerTom
Risks- volatility is low
- market direction is not as expected
Trade idea
Trade idea
Post earnings trades should be executed with longer-dated options to avoid holding positions during volatile periods.
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Time horizonShort-term
Entry / triggerPost earnings trade
SpeakerScott
Risks- Volatility during earnings season
- Market gaps
Trade idea
Trade idea Diversify into liquid products without moving into products with bad liquidity
Trading liquid products is more effective and safer than trading illiquid ones
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StrategyDiversify into liquid products without moving into products with bad liquidity
Entry / triggerLook for symbols with good liquidity on the platform you're trading
Invalidation / stopAvoid products with bad liquidity
SpeakerUnknown
Trade idea
Trade idea
When volatility is low, the opportunity to sell premium may not be worth the risk.
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Entry / triggerIf volatility is below its historical mean (17-19 range), widen the strikes and go out longer dated.
SpeakerUnknown
Risks- Volatility could rise unexpectedly
- Market moves could be outside the expected range
Trade idea
yen put selling
market is expected to stay within range
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Strategyput selling
Assetcurrency
ExpirationOctober
Time horizonshort-term
Entry / triggermarket within range
Target / exitcredit pop of 25%
Invalidation / stopmarket outside range
SpeakerScott
Risks- market moves outside range
- orders not filled
Trade idea
SPAC strangle
short strangle on SpaceX with 41% expected move
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Strategystrangle
Assetequity
Entry / triggerstock trading at $41
Target / exit41%
Speakerunknown
Trade idea
Trade idea
The speaker discusses selling S&P futures and closing positions due to market movements, indicating a short-term trade idea.
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Trade idea
Trade idea Rolling strangles to September
To reduce negative delta and give the stock a chance to move back
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StrategyRolling strangles to September
ExpirationSeptember
Time horizonUntil September
Entry / triggerClosing the in-the-money 136 strangle to free up capital
Target / exitRolling puts and calls to out-of-the-money strikes
Invalidation / stopIf the stock moves against the position
SpeakerSpeaker
Risks- Potential for further losses if the stock continues to move against the position
- Need to manage buying power to ensure it remains positive
Trade idea
Trade idea rolling the position when it expires
rolling the position when it expires
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Strategyrolling the position when it expires
Entry / triggerwhen the position expires
SpeakerDoug
Trade idea
Trade idea calls
selling calls above the strike price to capitalize on expected price movement
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Strategycalls
Assetstock
Time horizonshort-term
Entry / triggerif the stock gets called away
Target / exitexit the position
Invalidation / stopif the stock rallies and gets called away
SpeakerRoblox
Risks- stock rallies beyond expected move
- volatility changes
Trade idea
Trade idea diagonal spread
diagonal spread is the way to go for post earnings trades
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Strategydiagonal spread
Entry / triggerpost earnings
Speakertrader
Trade idea
Trade idea short Microsoft after a 100 point rally in two days
Microsoft is a good risk-reward opportunity to the downside
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Strategyshort Microsoft after a 100 point rally in two days
Entry / triggerafter a 100 point rally in two days
Speakerspeaker
Q&A
More CEO pay packages, and I've been railing on CEO pay packages for a long time now, are tied to ambitious multi-year targets. Um, and the targets mostly everything boils down to stock price. When you know when it's all said and done, everything depends on stock price. You're measured by your wins and your losses, not by much else rather than traditional profit metrics. Yeah, it's it's not going to be on profits. It's always going to be on stock price. So, does that actually align incentives with long-term shareholders, what shareholders want longterm, or does it just give executives cover to keep spending aggressively regardless of near-term returns?
The speaker discusses the alignment of CEO incentives with long-term shareholder interests versus the potential for executives to prioritize aggressive spending regardless of near-term returns. They suggest that while stock price is the primary metric, the effectiveness of this approach depends on the company and the specific targets set. They also express concerns about CEO overpayment and the lack of significant differences in performance between CEOs across companies.
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Actionable takeawayThe discussion highlights the debate around CEO compensation tied to stock performance and its impact on long-term shareholder interests versus short-term executive behavior.
Q&A
Would a Jade Lizard be a good trade with Palunteer up 16% already today?
No, the speaker does not like jade lizards after the move happens. They prefer high volatility.
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Actionable takeawayJade lizards are not recommended after a significant move, especially when volatility is low.
Q&A
What determines whether you go with shorter dated or longer dated option for earnings trades?
The decision to use shorter or longer-dated options for earnings trades is based on the timing of the trade relative to earnings. Post-earnings trades typically use longer-dated options to avoid holding positions during volatile periods.
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Actionable takeawayPost-earnings trades should use longer-dated options to avoid volatility.
Q&A
How do I diversify without moving into products with bad liquidity?
Look for symbols with good liquidity on the platform you're trading. There are multiple products with great liquidity, and you can use liquidity meters to identify them. Avoid products with bad liquidity.
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Actionable takeawayUse liquidity meters on your trading platform to identify and trade liquid products.
Q&A
How do I balance account growth with proper position sizing?
Balance account growth with proper position sizing based on opportunities, not forcing trades. Wins are more important than collecting premium, and you should adjust based on market conditions and opportunities.
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Actionable takeawayAdjust position sizing based on opportunities and market conditions, prioritizing wins over premium collection.
Q&A
Are there mechanical average true range or VIX or market IV metrics for intuitive deltas to sell?
If the VIX is below its historical mean (17-19 range), widen the strikes and go out longer dated. If it's above that, you can afford to get a little bit richer.
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Actionable takeawayUse VIX levels to determine strike width and expiration dates for premium selling strategies.
Q&A
Why did you have August 7th for SpaceX?
They don't have Fridays.
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Actionable takeawayOptions for SpaceX are available on the 7th, but not on Fridays.
Q&A
What is the expected move for AMD?
The expected move for AMD is $40.
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Actionable takeawayThe expected move for AMD is $40.
Q&A
What about the VIX being up 40 cents today? That seem kind of weird?
The speaker suggests that the VIX hasn't moved significantly, indicating that the volatility is relatively low.
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Actionable takeawayThe VIX is not showing significant movement, suggesting low volatility.
Q&A
How do you guys manage your sizing when using portfolio margin?
When using portfolio margin, the sizing should be based on the same principles as span margin for futures and options. Typically, it's 30% to 35% less buying power compared to a regular margin account. For example, if you use $1,000 in a regular margin account, you would use $650 in a portfolio margin account.
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Actionable takeawayUse 30% to 35% less buying power in portfolio margin accounts compared to regular margin accounts.
Q&A
Do you worry about things like dark pools at all?
No, the speaker doesn't worry about dark pools. They believe that for retail investors trading small quantities, the order flow is handled efficiently by off-exchange trading, and dark pools are not a concern.
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Actionable takeawayRetail investors should not be concerned about dark pools as their order flow is efficiently handled by off-exchange trading.
Q&A
What's your suggestions? You know, mid7 figures. I just right now I just got it up in a bunch of box spreads because I'm kind of paralyzed what I want to do with it because I feel this
The speaker suggests that box spreads are an intelligent trade, collecting a couple of points, but questions the return on SPX boxes, noting that the return is 36, which is lower than the 475 on a CD. The speaker also implies that the trade was likely made two months ago.
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Actionable takeawayThe speaker questions the return on SPX box spreads and suggests that the trade might have been made at a lower rate, implying that the current return is not optimal compared to alternatives like CDs.
Q&A
What is the appropriate size for a trade given a certain account size?
The speaker suggests that the trade size should be proportional to the account size, and that a trade that is too large for the account size can be risky. They also suggest that a portion of the account should be kept in dry powder for opportunities.
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Actionable takeawayTrade size should be proportional to the account size to avoid excessive risk.
Q&A
How to deal with the psychology of losing trades?
Sizing small and being consistent with trading strategies can help manage the psychology of losing trades.
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Actionable takeawayConsistency in trading strategies and sizing small can help manage the psychological impact of losing trades.
Q&A
Is theta decay actually constant or is collect theta every day one of the most oversimplified ideas in option trading?
Theta decay is not consistent and does not have to happen every day. Volatility can affect theta decay, and it can even expand against the trader if the stock doesn't move. The speaker suggests that the idea of theta decay being constant is an oversimplification, especially by charlatans on the internet.
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Actionable takeawayTheta decay is not constant and can be influenced by volatility, making it a complex concept rather than a simple daily decay.
Q&A
Do you worry about position glitching out there for a minute? You all right?
The speaker reassures that they are fine and not worried about position glitching.
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Actionable takeawayThe speaker is not concerned about position glitching, indicating it's not a significant issue for them.
Q&A
Could another explanation be that 90% of traders believe a gap is going to be filled?
The speaker suggests that this belief might be a self-fulfilling prophecy, as traders' actions based on this belief could influence market behavior. However, it's noted that this is speculative and not definitively proven.
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Actionable takeawayTraders should be cautious about assuming gaps will be filled based on common beliefs, as market behavior can be influenced by collective expectations.
Q&A
What are some of the best postearnings lessons and strategies to use?
There is no statistical evidence to suggest that post earnings directional trends are meaningful or tradable. Post earnings trades should focus on strategies like premium selling if IVR remains high, reenter expected move strangles closest to 45 days, and avoid post earnings iron condors if IV has come down. The highest pop trade after earnings is a ratio spread to fade the direction the earnings went.
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Actionable takeawayPost earnings trades should focus on strategies like premium selling if IVR remains high, reenter expected move strangles closest to 45 days, and avoid post earnings iron condors if IV has come down.
Q&A
Do you have an opinion on playing the potential merger of SpaceX and Tesla?
The speaker believes the merger is inevitable in the long term but not currently relevant. They are bullish on SpaceX but have been wrong on direction.
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Actionable takeawayThe speaker is long SpaceX but acknowledges the merger is not a current priority.