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~Options Thread~
Time & Stress-A Guide to Time Buys
When it comes to options, many see the gains of veteran players/lucky gamblers alike “seemingly” making a living off of these 1,000-10,000% gains & most people think “if I can just get one of those” I will change how I play!
Time & Stress-A Guide to Time Buys
When it comes to options, many see the gains of veteran players/lucky gamblers alike “seemingly” making a living off of these 1,000-10,000% gains & most people think “if I can just get one of those” I will change how I play!
Weeklies and biweeklies can be a powerful tool in your arsenal if you are experienced and comprehend the reward and risk ratios as well as the greeks behind Options pricing.
However, too damn often, we see people with smaller accounts going all in on some crazy OTM weekly plays
However, too damn often, we see people with smaller accounts going all in on some crazy OTM weekly plays
The goal is not to play the “how fast can I ten x my account and add a zero” game, this is is not a race. Patience and discipline in regards to account building can pay extremely big and occur much faster than you think when you stop rushing.
For this example I will use $SPY
For this example I will use $SPY
A $SPY April 24th $290 Call is $1.90
A $SPY June 19th $290 Call is $5.76
A $SPY Jan 15th $290 Call is $12.44
Do we see the differences here? I know what you’re thinking - “I have a smaller account, I can’t afford to pay $1244 for one contract” - This is a psychological barrier
A $SPY June 19th $290 Call is $5.76
A $SPY Jan 15th $290 Call is $12.44
Do we see the differences here? I know what you’re thinking - “I have a smaller account, I can’t afford to pay $1244 for one contract” - This is a psychological barrier
I agree you should never throw your whole account in one trade EVER! Nor should it always be on one side (hedges WORK).
However, if you are already willing to go so far out of the money, why not look a little farther and hunt farther out of the money deals 1-2 years out.
However, if you are already willing to go so far out of the money, why not look a little farther and hunt farther out of the money deals 1-2 years out.
A $290 call is more than 10% OTM right now which in options pricing terms, some might say is nothing (especially in these highly volatile times), while more conservative Risk players might say that is wayyyy too far out of the money.
I ask you now to consider a $330 March lf 2021 $SPY call which is priced at $3.30 (lol).
The June $290 was $5.76 and this one while being much farther out of the money, gives you an extra 9 months even though you’re much farther out of the money.
The June $290 was $5.76 and this one while being much farther out of the money, gives you an extra 9 months even though you’re much farther out of the money.
You are a getting a 30% price difference for a 22% farther OTM calculation from the initial. So now why am I saying all this?
Whether you have the June 19 or the March 2021, if the price moves in your favor, you are still going to be making good money regardless & YOU HAVE TIME!
Whether you have the June 19 or the March 2021, if the price moves in your favor, you are still going to be making good money regardless & YOU HAVE TIME!
To give an example, the October $350 calls were over $120 OTM & went from as high as $4 in early february down to .17 as peak lows last Monday. Three days later those same 6 months out plays went up to $1.30 - thats a near weekly option level return for something ridiculously OTM
Ladies & Gents, if you started with $1,000 & set a 25% goal PER MONTH goal on your account (being very conservative with options gains here so lets keep it realistic) - youd be a millionaire in less than 40 months. What are you doing right now that can get you that in 3.5 years?
Now of course that’s assuming you used 100% of your account which I would never advise, & some months may be amazing while others are slow/consolidatory but it is just to give you a realistic time frame.
How many years of work and tens of thousands of hours does the average american worker have to save for to even come close to that target amidst a sea of expenses and time interferences?
Slow down fam, slow down. There is money to be made and the market is providing discounts!
Slow down fam, slow down. There is money to be made and the market is providing discounts!
Let’s make that money, zoom out of the chart, slow down and give yourself some time!
