Trade idea
Trade idea Put selling
The speaker suggests that selling puts can be a lucrative strategy, but it requires careful capital allocation and risk management. The speaker emphasizes that maintaining a portion of capital dry is essential to avoid margin calls and to ensure the strategy can be executed during drawdowns. The speaker also highlights the importance of not increasing positions when the strategy is performing well, as this can lead to over-leveraging and potential losses.
View full notes
StrategyPut selling
Time horizonShort-term to medium-term
Entry / triggerWhen the VIX is at a certain level, and the market is in a specific regime
Target / exitTo profit from the premium while managing risk through capital allocation
Invalidation / stopIf the market moves against the position, the trader must be prepared to adjust or cover the position
SpeakerThe speaker
Risks- Market volatility
- Drawdowns
- Margin calls
Trade idea
TLT Put-selling
The speaker is selling June 85 puts for TLT, expecting the price to remain above the strike price. The trade is based on the assumption that the price of TLT will not fall below 85, allowing the seller to keep the premium. The speaker mentions that they sold puts in bonds yesterday and are applying the same strategy here.
View full notes
StrategyPut-selling
AssetETF
ExpirationJune
Time horizonShort-term
Entry / triggerSell June 85 puts for about 90 cents
Target / exitHigher than 90 cents
Invalidation / stopIf the price of TLT drops below the strike price of 85
SpeakerSpeaker
Risks- If the price of TLT falls below 85, the seller may be obligated to buy the underlying asset at the strike price, resulting in a loss.
Trade idea
IBM Put Selling
The speaker is short IBM 70 and 75 puts, believing that the stock has already made its lows and that the downside risk is out. The speaker suggests that the stock could trade around 117 or 116 by the afternoon, which would allow for a profitable trade. The speaker also mentions that the IVR is 83, indicating that the market is pricing in a significant move, which could be exploited by traders looking to capitalize on the potential upward movement.
View full notes
StrategyPut Selling
AssetEquity
ExpirationNot specified
Time horizonBy this afternoon
Entry / triggerStock price at 215
Target / exitStock price trading around 117 or 116
Invalidation / stopIf the stock makes its lows yet
SpeakerSpeaker
Risks- If the stock makes its lows yet
- If the market conditions change unexpectedly
Trade idea
ZN Put Selling
The speaker suggests selling 110 puts in ZN for April as a way to play for a bounce in the price of ZN. They note that the delta on the 10 puts is around 29, implying a 70% probability of profit. The break-even point is around 109.5, and the trade is based on the expectation that interest rates will decrease, leading to a rise in ZN prices. The speaker also mentions that the trade is a way to bet on either the end of a war or the continuation of the current status quo.
View full notes
StrategyPut Selling
AssetFutures
ExpirationApril
Time horizonShort-term (April expiration)
Entry / triggerZN at 110.27
Target / exitBounce in ZN price
Invalidation / stopIf ZN price falls below 109.5
SpeakerSpeaker
Risks- If ZN price falls below 109.5, the trade could result in a loss.
- Market volatility could impact the effectiveness of the trade.
- The trade is based on the assumption that interest rates will decrease, which may not materialize.
Trade idea
SPX put selling
The speaker sold puts on the S&P 500 (SPX) when it was at 41 and has since seen it rise to 66. They are continuing to sell more as the market moves higher, indicating a strategy of profiting from potential price declines during rallies. The speaker believes that rallies are often followed by corrections, making put selling a viable strategy. The entry point was at 41, and the target is a price reversion to a previous level, with the invalidation being a significant upward move beyond the expected range.
View full notes
Strategyput selling
Assetindex
Time horizonShort-term
Entry / triggerMarket is in a rally phase
Target / exitPrice reverts to a previous level
Invalidation / stopSignificant upward move beyond expected range
SpeakerTom Stnoff
Risks- Market moves significantly higher than anticipated
- Volatility increases, leading to larger-than-expected price swings
Trade idea
AAPL Put Selling
The speaker suggests selling out-of-the-money puts on Apple (AAPL) when volatility is high, as this allows the trader to capture higher premiums. The strategy is based on the assumption that the underlying asset will not decline below the strike price, and the trader will profit from the premium. The speaker emphasizes the importance of selecting a delta that aligns with the trader's comfort level based on the probability of profit, which is calculated as the inverse of the delta minus 100. The strategy involves waiting for the underlying asset to move sideways or higher, rather than waiting for volatility to settle down.
View full notes
StrategyPut Selling
AssetEquity
ExpirationNot specified
Time horizonShort-term, with the expectation of the underlying asset moving sideways or higher.
Entry / triggerWhen volatility is high and the trader has a bullish outlook on the underlying asset.
Target / exitProfit from the premium received if the underlying asset remains above the strike price.
Invalidation / stopIf the underlying asset declines below the strike price, the trader may be assigned and have to purchase the asset at the strike price.
SpeakerSpeaker
Structure / legs- Out-of-the-money puts with deltas of 20, 25, 30, 16, etc.
Risks- Risk of being assigned if the underlying asset declines below the strike price.
- Potential for lower-than-expected premiums if volatility decreases.
Trade idea
ORCL put selling
The speaker is short put options on Oracle (ORCL) with the expectation that the stock will not fall below the strike prices of the puts. The speaker expresses a contrarian view, suggesting that the stock may be undervalued despite a significant drop over six months. The trade is based on the belief that the stock will not decline further, and the put options are sold at a premium to profit from the time decay and the potential for the stock to remain above the strike prices.
View full notes
Strategyput selling
Assetequity
ExpirationMarch and April
Time horizonshort-term
Entry / triggerOracle (ORCL) price at $1.31
Target / exit75 cents
Invalidation / stopOracle price rising above $1.31
SpeakerSpeaker
Structure / legs- short 125 puts (March, 3 days to expiration)
- short 135 puts (April, 3 days to expiration)
Risks- Oracle's price could fall below the strike prices, resulting in losses
- Market volatility could cause unexpected price movements
- Time decay may not be sufficient to offset potential losses if the stock declines
Trade idea
COST Put selling
The speaker discusses selling puts on Costco stock at the 900 and 875 levels when the stock was trading around 850. The speaker believed that the stock would eventually rise above these levels, indicating a bullish outlook. The speaker also mentions that the stock has been on a tear to the upside after a period of weakness.
View full notes
StrategyPut selling
AssetEquity
ExpirationNot specified
Time horizonNot specified
Entry / triggerStock price at 850 level
Target / exitStock price above 900 level
Invalidation / stopStock price below 850 level
SpeakerThe speaker
Structure / legs- Put at 900 level
- Put at 875 level
Risks- The stock could fall below the put strike price, resulting in a loss
- Market volatility could impact the stock price
- The stock could trade below the put strike price before expiration
Trade idea
HOOD put selling
The speaker is short a bunch of puts on HOOD, expecting a price movement of 8 bucks. The expected move is based on the current price of $87, and the speaker is fingers crossed for the outcome. The trade is based on the anticipated price movement after earnings, with the risk being that the price may move beyond the expected range.
View full notes
Strategyput selling
Assetequity
Expirationafter the close
Time horizonday
Entry / triggercurrent price at $87
Target / exit8 bucks
Invalidation / stopprice movement beyond expected range
SpeakerSteve
Risks- unexpected price movement
- earnings report impact
Trade idea
ROBINHOOD put selling
The speaker is short puts on Robinhood, which has experienced a significant move from 75 to 71.87. The strategy involves selling puts to collect premium, with the expectation that the stock will remain within a certain range. The speaker is debating whether to hold the position until the earnings report, which could impact the stock's price. The trade is considered a good one due to the move, but there is uncertainty about the outcome of the earnings report.
View full notes
Strategyput selling
Assetstock
Time horizonshort-term
Entry / triggertrading at 75 bucks
Target / exit71.87
Invalidation / stopearnings report
SpeakerBogey
Risks- Earnings report could cause significant price movement
- Potential for unlimited loss if the stock drops sharply
Trade idea
gold put selling
The speaker mentions buying back gold puts that were sold the previous day, indicating a short position in gold. The puts were sold when the price was around $7 or $8 lower than the previous day's price, which was up $100. The speaker considers this a 'good trade' and suggests that the position was closed or adjusted. The thesis is that the speaker is short gold, and the trade was based on the expectation that the price would not rise significantly, allowing the puts to be profitable.
View full notes
Strategyput selling
Assetcommodity
Time horizonshort-term
Entry / triggerprice at a certain level
Target / exitprice at a lower level
Invalidation / stopprice at a higher level
SpeakerTom Sausnoff
Risks- price increase
- volatility
- time decay
Trade idea
RKLB put selling
Rocket Labs is expected to decline, making the put sell strategy viable
View full notes
Strategyput selling
Assetstock
Time horizonshort-term
Entry / triggerwait for Rocket Labs to come back down a little bit
Target / exit20% return
Invalidation / stopstock price rising above 45
SpeakerTom
Risks- market volatility
- unexpected price movement
Trade idea
Gas put selling
The speaker discusses a trade idea involving selling June 250 puts on gas, which is at its lowest level in a long time. The trade has an 88% probability of profit, with a capital requirement of approximately $1,400. The trade is considered a low-risk, high-reward opportunity with a potential return of over 20% within a short time frame. The speaker suggests that this trade is a good example of how to capitalize on a market at its lowest point.
View full notes
Strategyput selling
Assetcommodity
ExpirationJune
Time horizonshort-term
Entry / triggerprice at or near all-time low
Target / exit350
Invalidation / stopprice moves significantly higher
SpeakerMax
Risks- Price could move significantly higher
- Market volatility could increase
Trade idea
Bonds put selling
The speaker is shorting the 110 puts on bonds, which are trading around 58. They sold them at 54 and 50, indicating a belief that the market will not move significantly against their short position. The speaker notes that bonds are down 24 ticks, suggesting a potential for the put positions to profit if the market continues to decline. However, the risk of the market moving against the short position is a key consideration.
View full notes
Strategyput selling
Assetfixed_income
ExpirationAugust
Time horizonshort-term
Entry / triggermarket down 24 ticks
Target / exit54 and 50
Invalidation / stopmarket moves against the short position
SpeakerScott
Risks- Market reversal
- increased volatility
- unexpected economic events
Trade idea
Netflix put selling
The speaker mentions that selling Netflix's 85 puts was one of their favorite trades, indicating a bullish outlook on Netflix. The trade was executed when Netflix was up 285 265, suggesting a potential for continued upward movement. The speaker's confidence in this trade implies a belief in the stock's positive momentum.
View full notes
Strategyput selling
Assetequity
Expirationnot specified
Time horizonnot specified
Entry / triggerNetflix up 285 265
Target / exitnot specified
Invalidation / stopnot specified
SpeakerSol
Risks- Market downturn could result in losses if the stock declines below the strike price
- Volatility could impact the value of the options
Trade idea
ROBINHOOD put selling
The speaker sold 74 puts against Robinhood, expecting the stock to trade within a certain range. However, the stock opened lower than expected, indicating a potential downside surprise. The trade's validity depends on the stock's movement relative to the strike price. The speaker acknowledges the risk of paying for the move, highlighting the need for careful risk management in such trades.
View full notes
Strategyput selling
Assetequity
Expirationunknown
Time horizonshort-term
Entry / triggerstock price around 72.5
Target / exitunknown
Invalidation / stopstock price moving against the trade
SpeakerTom
Risks- downside surprises
- volatility
- unexpected market movements
Trade idea
yen put-selling
The speaker suggests selling puts on the yen as it has become cheap, implying a potential for upward movement or a desire to capitalize on the undervaluation. The trade is based on the belief that the yen may rebound or stabilize, allowing the seller to profit from the premium collected. The speaker also mentions selling puts on bonds at a specific strike price, suggesting a similar strategy of profiting from potential price movements.
View full notes
Strategyput-selling
Assetcurrency
Expirationnot specified
Time horizonshort-term
Entry / triggerwhen the yen is undervalued
Target / exitnot specified
Invalidation / stopnot specified
SpeakerTom
Risks- Market volatility could lead to losses if the yen declines sharply
- The trade is speculative and requires careful monitoring of market conditions
Trade idea
COIN put selling
The speaker suggests selling the July 130 puts on COIN, as the stock is near its 52-week low and the put premium is attractive. The trade is based on the expectation that the stock will remain near the low, allowing the seller to profit from the premium. The speaker notes that the put premium has increased due to higher volatility, making the trade more attractive.
View full notes
Strategyput selling
Assetstock
ExpirationJuly
Time horizonShort-term, with a focus on the July expiration
Entry / triggerStock price near the 52-week low
Target / exitPotential profit from the put premium
Invalidation / stopIf the stock price rises significantly above the strike price
SpeakerUnknown
Risks- If the stock price rises significantly above the strike price, the put seller may incur a loss.
- Market volatility could lead to unexpected price movements.
Trade idea
NFLX Put selling
The speaker sold put options on Netflix (NFLX) with a strike price around 90, expecting the price to remain above that level. The rationale is based on the belief that the stock is overpriced and that the recent earnings report, while positive, may not justify the current price. The trade idea is to profit from a potential decline in the stock price, with the put options acting as a hedge against downward movement.
View full notes
StrategyPut selling
AssetEquity
ExpirationJune
Time horizonShort-term
Entry / triggerPrice above 93.5
Target / exitPrice below 90
Invalidation / stopPrice above 95
SpeakerSol
Risks- Market volatility
- Unexpected earnings report
- Liquidity issues
Trade idea
NFLX put selling
The speaker suggests that during earnings cycles with low volatility, selling puts on stocks like Netflix (NFLX) can be a profitable strategy. The implied moves are expected to be around 6-7%, and the puts are relatively cheap due to the low volatility environment. The speaker emphasizes that the key is to trade outside the expected move, as trading inside the expected move is less profitable. The risk is increased if there is a market shock, as the risk is not adequately priced into the options.
View full notes
Strategyput selling
Assetequity
Expirationunknown
Time horizonEarnings event
Entry / triggerEarnings cycle with low baseline volatility
Target / exitImplied move of 6-7%
Invalidation / stopMarket shock or significant move beyond expected range
SpeakerUnknown
Risks- Market shock
- Significant move beyond expected range
- Low volatility environment may not persist
Trade idea
SPX put selling
The speaker believes that selling puts on SPX is a viable strategy given the current market conditions.
View full notes
Strategyput selling
Assetindex
Time horizonshort-term
Entry / triggerSPX is down 31
Target / exit105 or something
Invalidation / stopif it gets into the high 120
SpeakerTony
Risks- Market moves against the position
- Volatility changes
Trade idea
NKE put selling
The speaker suggests that the Nike trade is a cheap put to sell, but it requires a down tick in the stock. They also mention that the Vix not up-ticking could be a signal to pause short-side actions. This trade idea is based on the current market conditions and the speaker's analysis of the Vix and Nasdaq movements.
View full notes
Strategyput selling
Assetequity
Time horizonshort-term
Entry / triggerdown tick in the stock
Invalidation / stopif the Vix doesn't up-tick at all
SpeakerSpeaker
Risks- Market volatility
- Failure to execute the down tick
- Potential for increased market downturn
Trade idea
gold put selling
The speaker discusses selling puts in gold when the price was down $90, indicating a short position. The idea is to profit from a potential recovery in gold prices. The speaker acknowledges the risk of the market continuing to decline, which would invalidate the trade. The trade was executed based on the market's movement and the speaker's awareness of the opportunity.
View full notes
Strategyput selling
Assetcommodity
Time horizonshort-term
Entry / triggergold price drops significantly
Target / exitgold price recovers to a certain level
Invalidation / stopgold price continues to decline beyond expected levels
Speakerspeaker
Risks- Market continues to decline
- Liquidity issues
- Unexpected market volatility
Trade idea
Nike put selling
The speaker suggests selling the 38 puts on Nike, assuming the stock is priced around $41.50. The expected move is estimated at $3.50, and the trade is considered a marginal play due to the limited premium. The speaker also mentions considering a vertical spread by buying the 41 call and selling the 42.5 call as an alternative strategy. The trade is based on the assumption that Nike is undervalued and the market is bullish, making it a short-term strangle strategy.
View full notes
Strategyput selling
Assetequity
Expirationweekly
Time horizon2 days
Entry / triggerstock price at $41.50
Target / exit38 strike price
Invalidation / stopif the stock price drops below $38, the trade is invalid
SpeakerSpeaker
Risks- Potential loss if the stock price drops significantly
- Limited premium may not justify the risk
- Market volatility could affect the trade outcome
Trade idea
yen put selling
market is expected to stay within range
View full notes
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
Yen put selling
The speaker believes that the yen has been range-bound between 63 and 70 for the past four years, making it a suitable candidate for short put strategies. The strategy has been profitable in this environment, but the speaker expresses concern about potential upside volatility. The trade is based on the assumption that the yen will continue to trade within this range, and the premium collected from selling puts will be a source of profit.
View full notes
Strategyput selling
Assetcurrency
Time horizonShort-term, with a focus on the range-bound movement
Entry / triggerYen trading within a range of 63 to 70
Target / exitProfit from the premium collected if the yen remains within the range
Invalidation / stopIf the yen breaks below 63 or above 70, the trade may be invalid
SpeakerAdam
Risks- Potential for significant upside volatility
- If the yen breaks below 63 or above 70, the trade may result in losses
Trade idea
NFLX Put Selling
The speaker suggests selling puts on Netflix (NFLX) at a strike price of 455-465, expecting the stock to trade above the strike price. The rationale is that Netflix has underperformed compared to other stocks, and the speaker believes the stock may not move significantly. The trade is considered a short-term play, with the expectation that the stock will not drop below the strike price. The risk is that the stock could fall below the strike price, resulting in a loss.
View full notes
StrategyPut Selling
AssetEquity
ExpirationNot specified
Time horizonShort-term
Entry / triggerStock price at 86
Target / exitStock price above 455
Invalidation / stopStock price below 455
SpeakerLoki
Structure / legs- Put with strike price 455
- Put with strike price 465
Risks- Stock price could fall below the strike price
- Market volatility could impact the trade
Trade idea
GLD Put selling
The speaker sold puts in GLD (Gold ETF) earlier when gold was down, and now it's up $69, indicating a potential reversal. The trade idea is to capitalize on the upward movement by selling puts, expecting the price to remain above the strike price. The strategy involves leveraging the increased volatility around the Fed meeting, with the expectation that gold will continue its upward trend.
View full notes
StrategyPut selling
AssetETF
Time horizonShort-term
Entry / triggerGold price below a certain level
Target / exitPrice movement upwards
Invalidation / stopSignificant downward movement or market reversal
SpeakerScott
Risks- Market reversal
- Volatility contraction
- Liquidity issues
Trade idea
CL put selling
The speaker sold 64 puts on crude oil (CL) for $1.71, indicating a bearish outlook. The rationale is that crude oil prices had dropped back down, suggesting a potential for further declines. The trade idea is to profit from the put sale if the price continues to fall. The invalidation level is if crude oil prices rise significantly, which would reduce the value of the put options.
View full notes
Strategyput selling
Assetcommodity
Expirationcurrent
Time horizonShort-term
Entry / triggerCrude oil price drops
Target / exitProfit from the put sale
Invalidation / stopIf crude oil price rises significantly
SpeakerTom Sosnoff
Risks- If crude oil prices rise, the value of the put options will decrease, leading to potential losses.
- Market volatility could impact the effectiveness of the trade.
Q&A
What is the honest take on the concept of a stock you'd be happy to own as a justification for selling puts?
The speaker states that selling puts is not about being happy to own the stock but about taking on risk. They mention that they would be happy to own the stock at a certain price, but it's not a justification for selling puts.
View full notes
Actionable takeawaySelling puts is a risk-taking strategy, and being happy to own the stock is not a justification for the trade.