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SA Trader

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  1. You seem to be talking of buying PUTS, this is expensive. The cost of such a transaction would only be worthwhile if the IV was extremely low. Personally I sell covered calls and naked Puts (far out of the money) to reduce the cost basis of the shares I bought. Only downside is that you will loose your shares if the price moves above your strike price at expiration. You could still make a profit if the strike price is above your trade price. I generally repeat this process every week, sometime I sell the options two weeks out. With the short duration to expiration I will normally leave the options to expire and will rarely roll the options. When selling covered calls you normally have to keep your shares while the calls are active. For example, I own 100 SNOW shares and have been selling weekly covered calls with strike above my trade price and also naked PUTS at around 9 -12 Delta (10% chance of expiring below this level). This strategy generates a good income (roughly $700 - $950 / week). You could think of this strategy as reducing your cost basis and as a result your risk. I use TOS for my swings + options and only day trade on DAS, so I am unable to comment on option trading on DAS and TWs. If you are unfamiliar with options I suggest you complete the options training on tastytrade.com. It is free and definitely the best introduction training to options available. Please ignore the SMBU options training - it is completely useless in my opinion and actually dangerous for new options traders. Hope this helps
  2. Rob, I don't have answers to your questions, but I like your trade. I am also watching SLB and it looks great on the weekly. I am thinking of buying the dip to 35 or break and hold of the ~37.2 level.
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