Are you bad at predicting market direction? Do THIS (With Options)
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- เผยแพร่เมื่อ 9 มิ.ย. 2024
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#optionstrading #optionsstrategy #daytrading
00:00 - Introduction
02:30 - Trading at SMB Capital
05:03 - What Are Index Options
09:53 - Options Premiums and Breakevens
12:30 - Where is the edge in Options?
15:35 - Trade Example of Iron Condor
27:44 - Other Options Strategies
SMB Disclosures www.smbtraining.com/blog/smb-...
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or markt condition, but such executions are usually carried out by investment experts or advisors with experience since the 08' crash
True, I’m quite lucky exposed to personal finance at early age, started full time job 19, purchased first home 28, got laid-off work at 36 amid covid-outbreak, and at once consulted a well-qualified advisor to stay afloat. Thankfully, my portfolio has maintained steady growth ever since, amassing nearly $1m after subsequent investments to date.
Impressive can you share more info?
Nicole Desiree Simon is the advisor that oversees my portfolio, she's an extremely intelligent person, very thoughtful, cautious, and has a great deal of expertise, it's easy to find her on the internet.
She appears to be a true authority in her profession with over a decade of experience. I looked her up on the internet and skimmed through her site, very professional.. already sent her an inquiry hoping for a response soon..
Thanks, guys!! Great video, as always!!
Thanks! This was a very helpful lesson with smart insights!
Really appreciate the excellent videos and insight.
Very helpful video... thanks a lot sir
Great video. we learn a lot everyday
love your strategy, please share more
You explain everything so complicated compared to other channels.
Thanks Seth. Good clip. The only bad side of selling options, which depends on your expiration term, is super fast/large movements.....Like the dailies the past 2 days.....that gamma can be nasty...... Good stuff n thanks.
Great video! How would you manage this trade if it goes against you?
I am a seller usually, but now and again I buy an option or debit spread if the option is expensive. In this video it stated there is only one way to win buying an option, i.e. the underlying goes above original stock/Index price + the option price paid. However this is not the case is it. considering a long Call option, as soon as the Delta for that option increases the option price will increase. So an increase IV and/or underlying price will see an increase in the option price. Of course, Theta will eat away at Option value and that can scupper profit eventually without a significant directional move.
Could you possible do a video on management of ICs?
I like the QQQ and SPY options because I can protect my position by buying or selling shares of the underlying stock, even after hours. That is reason why I sell puts and/or calls on stocks with earnings before open and after close. Read the chart and have your predetermined price that you will buy or sell the shares to protect your position after announcement.
you dont buy or sell any option before open or after close.
and yes i know what you meant. most dont want or cant buy 100 shares of spy or qqq on a whem. hope it works lol my main thing was just joking about that first part i mentioned where you mis spoke. cheers
Yeah I was wondering why selling ICs on SPX is better than doing the same thing on SPY.
could i use equivalent options on index futures (such as ES/NQ/RTY) to trade this strategy ?
Do you have any videos on position sizing for different size accounts - Small, Medium, Large?
Markets have been extremely range-bound and "choppy", on a mid-term basis, in recent months and even years (excluding the COVID bounce.) I can see how tempting selling strategies would be... given my bad experience at being almost exclusively a buyer of option premium.
2 even 3-figure trader here. Great video.
😂😂😂
Which trading platform you are using for option selling?
Great job explaining somewhat difficult concept
There is not much volume at 64 DTE. Does it volume a matter by using this strategy?
Strangles and straddles all the way ... I find them absolutely fantastic for trading the TQQQ and SQQQ
I like iwm also for these
That’s exactly what I’ve been doing on qqq lately .
I have been making up my own strangles buying a call separately from the put so I can sell the opposite side and follow the trend and get a good run but then I know which way it's going when I sell the other side it starts to take off
I hope smb make a video about forex to 😢 smb video all are high-quality really love to watch details they put not the same as other guru ❤
Awesome
Question the example short sell 3500 put … why did it expire worthless if we want it to go up and the closing price was up at 4079
I like your idea sell calls at the top and sell puts at the bottom.
Isabella: Except NO ONE KNOWS what the top or bottom is, or else that would be blindingly obvious to everyone with a brain.
@@rogergeyer9851 somehow I didn’t see your reply until now. On a short term basis like a swing trading time frame, the area outside the standard deviation channel lines might be a tradable spot.
Strangles on futures next. I do those all the time!
What’s the basic previous premise?
@@mahfuzkabir7812 sell strangles a little past expected move or twice expected move. I have a lot of videos on my channel about it
How do you back test ? is there a youtube channel that shows you how ?
How easy is it to fill a 10 contract iron condor? It is hard enough to fill 1 contract of an iron condor.
Aren't you suppose to consider breakeven prices? What if you are outside the breakeven price, you will take loss. Correct?
Do you work with contractors?
Be the House!
Sounds great. Can you elaborate on the capital requirement? Why isn’t the capital requirement 45,250? 4,350 - 4375 = 25 *10 + 3475-3450 =25 * 10. 25000+25000 - 4750 = 45,250. Thx
because it would be impossible for both sides to go worst case scenario.
Understand the options strategies is not difficult… how did you decide the short legs is the important. Could you explain more on it? What’s the delta do you suggest for the short legs?
support and resistance. plus risk reward ie money gained for the trade
I did an iron condor SPY....14 delta both wings. But market over bought on Sleepy Joe signing a debt ceiling increase agreement on Friday. Waiting market to come back down.
Do you have to let the options expired or you can close the trade anytime?
Typically you do NOT let spreads expire, you close them at 50% profit or so.
Can the seller of an index option be assigned if the price of the index exceeds the strike price?
Yes, at expiration if it's in the money.
CBOE says "Index options are European style, meaning they cannot be exercised before expiration. ... index options settle to cash." Assignment means a deduction of cash, equal to the value of the option at expiration. (Examples of cash-settled options include: NDX SPX VIX OEX RUT DJX HGX OSX SOX XSP XEO XND UTY ... SIXE MRUT MXEA MXEF ; I've been wondering if I can find a more complete list; CBOE/OCC may have the information but I have trouble sifting through it. And availability of specific options/markets may be dependent on your broker anyway.)
No, there's nothing to assign. He made that very clear.
It's not just about the probability of winning a trade that's naively considered here. It's the expected value of your trade which takes into account the amount at risk. You may sell options successfully more often, but when you're very wrong can you withstand the losses? Open minded, but very skeptical that this isn't pennies in front of a steam roller.
Profit is pennies. And you only need one or two crazy news items to wipe out profits on the rest of your trades. Notice you will never see any videos on PREDICTING a range-bound market.
Do you accept females to work with you? Looking for a place to learn and grow! I have basic trading experience.
How is the worst case scenario amount calculated?
difference between long and short option on the loosing side. 50 points = $5000 minus the credit received when opening the position. That is for 1 contract. Honestly, I would not do 10.
Anyone has Bella's background picture? I wanna a wallpaper like it. Thank you very much
How do you arrive at $20,250 needed for the trade.
25,000-4250= 20,250
Sorry 25,000-4,750=20,250
I need a few beers now.
Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them.
An obvious way to lnvest for a recession is to buy shares in businesses that are likely to experience steady demand even in a downturn. Typically, those are consumer staples, utilities, and healthcare companies, but off course such decisions cannot be made by an average Joe, a financial advisr is important in making this decisions
@@jonathanburtnick Such considerations can certainly have a role when I think about whether I ought to buy into a share. But I never purchase purely on that basis, i always have to seek the adv!ce of my financial-planner who has helped me gain $985k in a well-diversified portfoIio that has experienced exponential growth
@@dianarabbanii2 I wholeheartedly concur, i have thought of engaging with an lnvestment coach, but don't really know how get one.
@@KangMinsu122 Viviana Marisa Coelho a registered Investment advisr. Quite renowned, search her name to get in touch
@@dianarabbanii2 Great, I looked up Viviana Marisa Coelho online and researched her accreditation. She seem very proficient, I wrote her detailing my Fin-markt
What this guy doesn't tell you is that in order to trade for the brokers that set you up with an account where the broker fronts you all the money, you have to have a lot of experience and be a profitable trader over a significant amount of time. They don't just give you access to the trading account. Secondly, in order to sell options on an index like SPX you have to literally have TONS of money, selling one option on the spy for example will wrap up 34,000 dollars of your option buying power. Another thing that they don't tell you is that a smart call option buyer will sell his position for a profit well before expiry if the stock goes up and scalp profits... I have done this many many times. And sell the option if it looks like its going against me, they only expire worthless if they buyer waits until expiration... why on earth would anyone wait until expiry??
You need a level 2 options account. That's it. Iron Condors don't have a very high margin demand.
How does the worst case scenario of losing 20 000$ happens?
Bollinger theory suggests that range bound is followed by range expansion
So the key is to create a trading sweatshop and give the workers a minority fraction of the return.
I know it may seem that way but the "slaves" don't take any of the risk, so it's pure profit for the workers. Of course you have to produce consistent large returns or they will likely replace you.
Selling options require huge margin, and the risk is also huge
How old is this video?
Id say its new as I get these clips daily....Seth has done other IC clips too......good intel.....
How come there are still people buying options then?
Selling an option puts time on your side , buying an option the reverse
we prefer selling options
So did Victor Niederhoffer! And look what happened to him when he sold too many puts. Admittedly, the probability of success is impressive. But the risk/reward ratio from selling puts-even put spreads- is a lousy risk/reward ratio.@@smbcapital
60 day is awesome, but if you can leg into a 45 day after a directional move could definitely get more value.
If we did it this way, do we stay with the range shown or go tighter? Do you sell one at 45 days to exp and wait for redirection and do the 2nd leg, at say 35 days to match the expiration of the first leg or just sell the 2nd part of the iron condor when it goes the other way and choose 45 days for that one, regardless of leg 1 exp date?
@@ashley1996 I've tended to hold until the value captured exceeds time left as a ratio, but it's better to leg into ICs and collect at 50% credit imo if you wanna keep it on the safe side. Also open them when IV is higher, can sometimes just walk right into some profit as volatility rarely sustains
Great, except that the amount at risk is this example is likely not appropriate for anyone who has less than $1 M in his account. Risk management is extremely important because at some point, you will get a trade wrong and if your risk is too high, it might be the end of your trading account!
Despite the fact that I invest, I am saddened by my inability to evaluate each company's performance and determine whether or not this is the ideal time to purchase stocks. My monetary stockpile is being depleted by inflation. At this stage, I need accurate market trajectory data, but I'm not sure what to do.
Particularly in this weak market, there are several opportunities to generate excellent returns, but such intricate transactions can only be carried out by seasoned market professionals.
I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 6 figures working with an investment coach for more than two years.
@@mariaguerrero08 I've been thinking about going that route. I have a lot of stocks that I have maintained, but they are beginning to lose value, so I'm not sure if I should hold onto them or sell them. I feel hiring your investment coach would make it easier to restructure my portfolio.
Do your homework and choose one that has strategies to help your portfolio grow consistently and steadily. ‘’Mary Onita Wier” is responsible for the success of my portfolio, and I believe she possesses the qualifications and expertise to meet your goals.
After conducting an online search of her name, her website quickly surfaced, piquing my curiosity. The initial impression is positive and I intend to arrange a call with her. I'll make sure to provide you with updates on how it goes. Thank you.
Be very leary of anyone claiming that there is "no risk" for trading
I read that Nvidia provides tech for crypto mining services/blockchain transactions. Could the current crypto pump be attributed to Nvidia’s great earnings and should I hold some crypto as well, cos tbh I’m having FOMO with the current crypto price at 64k.
It’s going to be a wild year for these sectors, so you should def. invest in crypto. 60% of my portfolio is spread across tech stocks, crypto and Crypto/Gold ETFs.
well the crypto market is expected to do way better than any other equity sectors this 2024 especially with the SEC crypto ETF approval but it’s a volatile market nevertheless and if you’re new to it, it’s best to reach out to an experienced adviser for proper guidance.
Yes, my asset manager advised I spread further into mutual funds and crypto Etf and boy am I glad I did. The whole idea is: Don’t get too greedy and also to exit at the right time, so generally I do find having an adviser very helpful, because what Avg. Joe really has time to watch and comprehensively analyse the market.
could you recommend some good advisers? don’t get me wrong, I already have an asset manager, but he seems not to know much about crypto.
Vivian Jean Wilhelm is her name. She is regarded as a genius in her area and works for Empower Financial Services
TLDW
Notice the pitch opens with a subtle dig at your ability to predict directionality. Don't trust anyone who diminishes your ability and sells him/herself as your rescuer. I have news for you, ALL bets in the market require that you make SOME kind of stab at the future -- whether it's volatility (with straggles, straddles and iron condors) or direction (everything else). Instead of looking for a magic option strategy that is risk free money (which doesn't exist by the efficient market theory) you should try to work on developing some level of omniscience and technical analysis knowhow. Developing omniscience is a subject for a long conversation and not something anyone in Wall Street knows anything about -- it's a spiritual skill that can be mastered like any other (well it requires much more effort than any other). Technical analysis -- there are thousands of books, youtube videos, and programs you can use to sharpen those skills. To set up iron condors as some kind of financial income producing panacea, especially in the kind of market we're in, is bad advice. IMHO.
That’s ridiculous. You can sell condors, strangles, naked….etc at a profit right now, last week, last year, & next year…be smart & use your brain.
Hey Jordiros or whatever the F@#$ Ur Name is - Save Ur B.S Sermon for Sunday
Lol
Iron condor worked for me, I made just under 10k with daily’s so 🤷♂️
Thank you for saving me the 28 or so minutes. I don’t knock anyones hustle but thank you for saving me the time🤞🏽
As far as I understand, such a strategy is statistically, knowingly unprofitable. Or where am I wrong?
At 80% profitable trades, we will get an average of 8 profitable trades at $4,750 and 2 trades at -$20,250 (this is the margin requirement). So that would be -$40,500 and +$38,000 = -$2,500. No matter how many trades you make, it will still be a loss with that ratio of risk profit to that % of winning trades.
And second, you say that on a winning trade we will get $4,750, but we have to have $20,250 in our account.
If you risk at least 5% of your deposit at every trade, it turns out that you have to have in total $405,000 in your account.
And the profit of $4,750 is equal to 1.17% of the capital. Such a return for two months is equal to about 7% per annum. That's if I'm still wrong on the first point...)
So what's the point? Help me understand. I really want to understand option strategies.
I think he said 85%. Plus, as he said, experienced traders will have strategies to mitigate risk on the trade, such that losing the maximum risk on the trade is uncommon. And there are often *many, many* times in that 60-day period he used as an example when the trade is largely or at least somewhat in a profit. These times can be an opportunity for an early exit, or possibly an adjustment. (Adjustments need to be done carefully, because they mess with the risk/reward nature of the trade, and can turn a winner into a lose if the adjustment involves paying significant premium. But when it's cheap to reduce the margin or risk on the trade, and/or I see the potential for the trade to go severely against me, I would like to do so.)
I made a similar comment and they DELETED it!!!
You are right. See my other comment.
@@jjfattz so did I
Am I assuming correctly that when you say you close the trade at 2x loss, you are talking about the premium of one side of the IC?
He forgot to mention. when you lose. You lose big selling options.
Do you have any females working there?
Do u also want to know if they are attractive lol
maybe some of the guys "feel" like females
@@isaac95395 🤣🤣🤣🤣🤣🤣
i really think this is funny. i doubt you have a single trader that you would fund doing iron condors unless it is a hedge.
You had me until you started talking about being God😅
Sellers (aka "writers") of options eventually blow up on black swan events.
You have a 50 points long option away as protection.
So is the assumption that all options traders are men?
The iron condor is the single most overrated and illogical option trade anyone can take. If the index is range bound why wouldn't you sell a bear call spread at the top of the channel and sell a bull put spread at the bottom? Just arbitrarily buying an iron condor when you think you're in the middle of the channel seems extremely foolish to me. The math doesn't add up. I challenge anyone to prove me wrong. But the name is very cool, I'll grant you that. Almost as cool as broken wing butterfly.
To rephrase your question, "Why sell an iron condor when you can sell an iron condor?" You're just legging in to the IC credit spread by credit spread. Which is perfectly fine-- it's way easier to get filled at the price you want.
ICs as a strategy make perfect sense. I backtested 45DTE SPX ICs with 10 delta up top and 16 delta on the put side, exiting at 15% profit or 30DTE. Soon enough for theta to start burning, far enough to avoid big gamma risk. Turned out to be consistently profitable through several markets.
@@FuzzBob What width(s) did your backtests suggest are optimal? TIA
The market IS actually against you - there's enough time slots in a day to screw over every single retail trade. Guys, they see your trade on their L2 screens and know you are retail. Not only that, they buy scraped data from your broker that tells them account balances and margins. Note that pro traders scale in and out and don't have t+1 and margin constraints. MMs have little recourse against that.
I find it very dry and hard to follow. Maybe it’s just me just wanted to bring that up I think maybe it’s because of the monotonous scripted speech and lack of visual illustrations
I could not disagree more. Hope you were being sarcastic. What did you expect? Like Marvel movie?
I’ll try to have a screwdriver with it next time.