Comments

You must log in or register to comment.

yweh t1_ja8fwhb wrote

Haha. This isn't true...but I do have some covered calls to sell you. They'll probably print for you and you can live the life you've always wanted. Surely, I am only selling these options out of the goodness of my heart*.

*This satirical comment is not financial advice.

147

AutoModerator t1_ja8fwib wrote

PUT YOUR HANDS UP yweh!!! POLICE ARE ENROUTE! PREPARE TO BE BOOKED FOR PROVIDING ILLEGAL FINANCIAL ADVICE!

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

54

polarbearbreeze t1_ja93e57 wrote

anyone else too stupid to understand what this theta gang thing is about, and is too scared to ask about it

71

cromwest t1_ja947rg wrote

During the gold rush people who sold shovels made bank.

111

thealiensguy t1_jab32ss wrote

Trumps grandpa made most of his fortune this way, setting up brothels outside gold mines. Why mine when you can just get the miners drunk and get hoes to rob them?

11

Beautiful_Spite_3394 t1_jab4duu wrote

He started a whole proud family history of "why work when I can steal from someone else to do it for me"

What a visionary.

8

thealiensguy t1_jab4i0i wrote

Apple doesnt fall far

5

viperex t1_jachc1h wrote

If we could set up brothels just as easily today, it'd still be a good way to make money. You can't lose if you own a brothel or casino

0

AdhesivenessCivil581 t1_jacibwl wrote

Unless your Trump. He managed to bankrupt casinos, even while making extra cash by letting Russian oligarchs launder money in them.

0

BullyBumble t1_jad699f wrote

I’m guessing it wasn’t “easy” back then either

0

TetraMental t1_ja9ab0m wrote

theta gang are people who look around at the people gambling on options here and realize that for every sucker buying a contract, somebody with some shares is on the other side selling them the contract.

83

Platypus_Legion t1_ja9kmzn wrote

It also works for puts, and you just need cash for that.

23

Kenobi3371 t1_ja9xlus wrote

If you're not on Robinhood you can do covered puts too

11

selipso t1_jaah3ul wrote

How does a covered put work? Do you sell the shares first and then buy them back later?

2

jonnyohman1 t1_jab1zbd wrote

called a cash-secured put. Selling a put means you'll have an obligation to buy those shares at the strike price if it expires and you get assigned. If you want to get fancy you can then take those shares you were assigned and sell covered calls on them. That's called the wheel.

14

AnonymousLoner1 t1_jab5a9x wrote

He's talking about a short sale-covered put.

Just like long shares cover a short call, short shares cover a short put.

That's why you can't do it on Robinhood, since they don't allow short selling.

3

OTD303 t1_jabmqmh wrote

The fact they don’t allow That means they know the kind of power that is the retail trader Lmfaoo

5

needspantsu t1_jabtx7r wrote

I assume, given shorts have limitless* loss potential, and hood is aimed towards teens and low income peeps, it's a bad mix.

0

Kenobi3371 t1_jaah9z1 wrote

No, same as selling a regular put but you have shares instead of cash as collateral

−6

coinpile t1_jaapxcg wrote

You don’t even need cash, I sell puts on margin.

−1

no_simpsons t1_jabjmx1 wrote

"with some shares"... I roll naked, dawg

3

SokarDaGreat t1_jabkvlj wrote

My greatest flaw in life is not being allowed to sell naked. Truly embarrassing.

0

BoofingFluoride t1_ja9op76 wrote

And then with enough time they realize that they're still the suckers crossing the bid-ask spread.

1

marlwenplotsky t1_ja9dkd4 wrote

magic bean salesmen, except sometimes the magic beans actually work and you can go bankrupt because of it.

20

suasposnte187 t1_ja9ikfj wrote

> except sometimes the magic beans actually work and you can go bankrupt because of it

img

8

Necessary-Onion-7494 t1_jaa0knz wrote

Yeah, if you sell naked options on a stock that goes parabolic then you are screwed. However, only idiots sell naked options.

5

arpatel530 t1_ja9ol2z wrote

First rule about theta gang is we don't talk about theta gang

16

ShankThatSnitch t1_ja9slvq wrote

Theta gang are the ones getting rich off all the loss porn you see posted. Every yolo that has gone to zero, is money in theta gangs pockets

13

Youngerdiogenes t1_ja9m6n6 wrote

Thetagang is overrated and most people lose money on it because they lack discipline.

If you’re interested, you can check out /r/thetagang or just research “covered calls” and “selling cash secured puts” on youtube. Plenty of good material out there to learn the basics.

Let me know if you need help, I’ve been around buying and selling options for years and might be able to answer your questions. Or at the very least point you in the right direction.

12

Drivesabrowntruck t1_ja9mv04 wrote

I think that has a lot to do with what options you’re selling. I do low IV, low Delta options, high volume on stuff I don’t mind owning. I think where many Theta gang guys go wrong is chasing theta, without looking at the underlying.

16

Youngerdiogenes t1_ja9poqx wrote

Thats’s 80% true in my opinion. The other 20% is the lack of discipline. Even when selling safe covered calls on reliable stocks, the newer guys will sell a call on a stock, not realize it’s earnings week. And when the stock blasts past their strike, they suddenly rather keep the stock and buy their contract back for a loss.

Zero game plan and no discipline makes for a bad options salesmen.

8

Drivesabrowntruck t1_ja9pzte wrote

So so true, $DIS was a prime example of this. Had 105 Feb monthlies, thing goes to $123 AH earnings day, nothing but a stone afterwards. It actually finished ITM on OE, stock didn’t get called away. One of the few times I’ve had them finish ITM and not get exercised.

5

viperex t1_jachuqa wrote

> they suddenly rather keep the stock and buy their contract back for a loss

What?

−1

Youngerdiogenes t1_jacpnd6 wrote

That sentence makes perfect sense to people who know the mechanics of thetagang.

1

pan_berbelek t1_jabthep wrote

So could you explain what those Greek letters mean in relation to options? (I haven't yet traded any options, only shares)

0

Youngerdiogenes t1_jabuqyk wrote

I wont spoon feed you info. Google it and if you need help afterwards I would be glad to help

1

lostsomuchmoney t1_jac1djl wrote

I need help with delta and gamma that shit is way too confusing. I got vega theta and rho down but those were the easier ones

0

CodeMonkey1 t1_jae5ooy wrote

Delta is how much the option price will change relative to the stock price changes, and gamma is how much the delta will change as the stock price changes.

Imagine a stock is $100 per share. You buy a call option for $1.00 with a delta of 0.10. If the stock goes to $101, your option is worth $1.10.

At the same time, as the underlying price changes, the delta itself will change. So imagining the above option has a gamma of 0.01. After the underlying moves to $101, the option delta is now 0.11. So if the price moves up again to $102, the option is now worth $1.21 and the new delta would be 0.12.

0

viperex t1_jaci7dr wrote

What delta and what DTE for calls and puts?

0

Youngerdiogenes t1_jacq8l3 wrote

The DTE really depends on you and how much time you have to manage your position.

The delta depends on the stock and your strategy.

.30+ delta is for people who snort cocaine amd share needles.

.20 delta is for people who appear normal but wear womens underwear to big meetings because it makes them feel powerful.

Anything less than .20 is for people who idolize Warren buffet and think pepper is too spicy.

1

Big-Industry4237 t1_ja9xlk5 wrote

Buying calls and puts - are lotto tickets.

Selling calls and puts, is theta gang, thus, at the casino, you are selling lotto tickets.

10

one_excited_guy t1_ja9b0aa wrote

if that pic is not what theta gang is about, then what is it about?

0

BullyBumble t1_jad62lo wrote

Dude. Let me promise you - 90% of references to theta, including this post, don’t use the term correctly.

It’s the diff between saying “stock XYZ might go to 100 from 80 by tomorrow” and “…to 100 from 80 within a year”.

You’ll notice if you open the options chain, the farther the strike the lower the price, and the farther out in time the higher the price.

Theta properly refers to the diff between same strike options over x time. So every time “theta gang got me” but price moved through a strike they missed the point of theta.

0

suasposnte187 t1_ja9j78i wrote

If options immediately devalued, then I would sell then buy back immediately 50,000 contracts a day from my yacht.

Fact is, yes...theta devalues short options, but the buyer has gamma in their favor , that can blow you out of the water real quick with short dated options.

37

Bxdwfl t1_jaa0eat wrote

exactly. posts like this are why i think most of this sub has no clue how options work. it's not like selling them is some cheat code for free money.

13

sluttyseinfeld t1_jaa9prr wrote

Not free but selling options really is a great way to make money if you know what you’re doing since time is working for you. Selling naked is just regarded but nobody with multiple brain cells does that.

13

suasposnte187 t1_jab1xfr wrote

Im not disagreeing with you that selling naked options is asking for trouble, but I will say that the entire Tastytrade strategy is largely based on selling naked.

​

They call in "undefined risk"...which sounds a lot safer than "naked short option"

3

SokarDaGreat t1_jablf0d wrote

Yeah but even Tom doesnt do it like a dumbass you can look at the majority of his trades he makes a day and its always 1-2 contracts. He is never selling dozens of contracts per ticker at any given point. You can watch his trades and see him get assigned and then the next day he either sells the stock or sells covered calls if he is down. If you actually are 100% disciplined and follow Toms advice, watch him and that one guys vids explaining strategies, markets, and everything else that goes into being a successful trader then odds are you will come out on top in the long run.

2

Camel_Sensitive t1_jac0nqk wrote

Nobody that knows what they're doing sells options because "time is working for them."

Good traders sell options because they're overvalued. That's it. If the time component of an option isn't overvalued, you won't make money over time even if you ONLY sell options.

−1

cazbot t1_jacjfwi wrote

I tried to trade 1 options contract once just to see if it operated the way I thought it would. I basically spent $200 to confirm that I am just as stupid as I thought I was, maybe stupider.

1

SuperUnic0rn t1_jaclpoq wrote

That is a very reasonable way to learn and mitigate risk. I recommend not starting with a week expiration, maybe 1 month, so you have some time to watch the value change.

0

cazbot t1_jacmf3a wrote

That was actually my primary error, was not understanding the expiration date properly.

2

RollTheDiceFollowYou t1_ja9ky8k wrote

I am waiting for the day someone screws me by executing an early exercise of the covered calls I sell.

21

suasposnte187 t1_ja9lhz9 wrote

They are not screwing you, they are giving you the full value of the option before the option has expired.

33

Thguru t1_jaargux wrote

Woho Woho I didn’t come to wsb to find logic being spit out

0

SokarDaGreat t1_jablqh2 wrote

You didnt lmao, it only works out in your favor if the shares you have as collateral against the covered call are above your cost basis. If you are down pretty good and just selling CC’s to recoup some losses and then get early exercised you sold for a loss. Then as usual the stock will run up after the assignment and youll be sitting there with your dick in your hand and the shitty premium.

1

Camel_Sensitive t1_jac0tdx wrote

This has nothing to do with the fact that you received free premium and can buy the stock again. Peak WSB's.

1

SokarDaGreat t1_jac1tlr wrote

Then you make a wash sale if its below your cost basis. Peak wsb. Stfu

1

professor_jeffjeff t1_jab96d4 wrote

Even if they do, assignment is still random. There technically isn't another specific individual who bought your specific contract; they all go into a pool and there's some system that determines who actually gets assigned.

1

Drivesabrowntruck t1_ja9m584 wrote

You must of missed when $F announced the DIV. Lotta guys got exercised early for ex-div

0

CheeseSteak17 t1_ja9vjoh wrote

The stock also dropped by the dividend value that day, so it was net neutral. The special dividend was accounted for in option strikes. As a seller of both puts and calls that week, it was pretty meh.

5

Drivesabrowntruck t1_jaa1zcs wrote

The special dividend wasn’t accounted for, before those options were written, so Theta was already priced in. Short sellers have to pay the DIV on shares shorted, so they took a hit on the strike price they borrowed at, if not hedged

0

CheeseSteak17 t1_jaa42i5 wrote

All options had the strike lowered by 0.65, which accounts for the special dividend.

3

Sunnyhappygal t1_ja9ojd4 wrote

It's really simple. If you think the market is going to go up, buy some shares. If it goes up a bit, sell some calls off those shares. If it goes WAY up, buy some puts.

If you think the market is going to go down a bit, sell some puts. If it keeps going down, sell some calls off the shares you were assigned. If it goes WAY down, buy some calls.

Surefire recipe to sometimes make money and sometimes lose money.

17

MapleBabadook t1_jaae8r4 wrote

This is completely accurate, except I don't agree that buying puts is a part of it.

8

VisualMod t1_ja8c66b wrote

User Report
Total Submissions 8 First Seen In WSB 6 years ago
Total Comments 263 Previous Best DD
Account Age 9 years [^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.) [^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
1

on_duh_pooper t1_jaa8a7c wrote

Did anyone else hear Butters selling NFTs while reading this?

0

Painty_The_Pirate t1_jaafqe5 wrote

I'm in the "blow any theta I capture on theta" gang

0

ValarOrome t1_jaanrp7 wrote

except, when it doesn't and it wipes out 6 months of earnings in 1 week.

0

darkspd96 t1_jab3eyr wrote

Then the market tanks and Theta is wiped out like everybody else, perfectly balanced like all things...

0

Barthas85 t1_jad4v5x wrote

Theta Gang (almost) always wins.

0

Ohmaygahh t1_jaddsl5 wrote

BLACK FUCKING MAGIC!

0

VisualMod t1_ja8c6sk wrote

Thetagang is engaging in what is known as a "pump and dump" scheme. This is where he artificially inflates the price of a security, then sells it off at a profit. While this may be profitable for him in the short term, it ultimately harms investors and drives down prices overall.

−37

vegasoptions666 t1_ja8g5f3 wrote

Defective bot.

26

technoexplorer t1_ja9fyb1 wrote

Wait, no, if a stock is exposed to a pump & dump, doesn't that give a predictible outcome that the thetagang could exploit? They know it's going to go up on a certain timescale based on pump.

−3