TheOhioAviator t1_ix5m03c wrote on November 20, 2022 at 10:43 PM

I'd advise you extend that. You should look to be a week or more out. View the OI and volume on options like spy at about a week + to expiry you'll see. Say 11/25 options last week. Still playable this week. But not ideal any more. You'll see volumes migrate from the 11/25 to the 12/2, maybe the 12/5. People roll their options. And if you do what I'm advising, you will see immediately that that's the thing to do. The theta barely applies, if at all really when 5+ days to expiry. Literally, do it and you'll see the difference.

MayoLovinApe t1_ix5n9vs wrote on November 20, 2022 at 10:53 PM

Ill check it out. Im trying to get my account to a nice number where i can play alot of further out options if that makes sense.

TheOhioAviator t1_ix5skn5 wrote on November 20, 2022 at 11:31 PM

One of the biggest struggles for the up and coming portfolio makers. I advise you, give it a try. While you may see that the costs of the contracts are more than you want to pay for ATM options, you can, only on days which there is plenty of market news, fed weeks, econ data etc, you can, by buying OTM options, you can afford, you will be able to realize small 15-30% moves, between 30% and up to 150% on a day where spy moves 4-7 dollars in a given direction. But only then will OTM work for you. Otherwise a flat to "boring" day I call it, you have to trade ATM to make money.

You will also find that the delta on options week+ DTE, coupled with the theta, you're less at risk of serious loss over a given 10-30 min period within a 1 dollar move away from your desired strike. The delta in turn will benefit you greatly on the strike you own once it's ITM The delta gets the gains, and the theta gives you the time to maintain those gains given the market moves opposite of your strike price. Giving you more time to sell and guage your trade. Advise when trading this way maintain your eyes on the 5 min charts and cross check resistance etc, etc, with the 1 min. Double cross check both. And plan accordingly.

MayoLovinApe t1_ix5ssyv wrote on November 20, 2022 at 11:33 PM

So for example youre saying if spy is at 398 on open look into buying like 408 calls a few weeks out. Of course depending on the direction i think its gonna go?

TheOhioAviator t1_ix5ul35 wrote on November 20, 2022 at 11:46 PM

Sure. For that example. You will tend to find the "safer" options are every 5 dollar strike. So the 405 will typically have more volume on it making it inherently "safer" to trade. IMO. Obviously if you can afford the 400 call go for that one.

I will also tell you unless direction at the open is very obvious I would advise waiting to place trades until about 10-1030. Traders trading at the open are taking gains from A.H. and PreM trading. Meaning if it's a 30+ open for the SNP then you can almost guarantee some profit taking will happen at open. Giving you access to better pricing for the solid move higher that's set up in the charts. Charts at 930 are basically useless IMO. Unless news, econ data, etc have set the days direction. Sometimes you can get a violent move at the open. If you're quick enough to get in an option going the right way you can realize huge gains at the open. Sell and be done for the day. And I mean be done for the day. No matter how much you make.

A small portfolio is limited by the day trading restrictions. You will almost guarantee, if trading at the open, you will make your gains and move on, once you move on from it you get reset mentally for the charts, watch for the action that signals the move, and buy in again. Once you sell though. You've now used 2 days trades. You can go in for another time all in that one day, but after that you're done for the next 5 days. Best to make your gains and come back to play later. There is money to be made at any time of the day. Don't focus on the open trades. They can get you in more trouble. Remember the market is open from 930-4. That's a long time for stuff to happen. That's a lot of time to make a trade. A safe trade.

TheOhioAviator t1_ix5v3i4 wrote on November 20, 2022 at 11:50 PM

Also. For example. Nov 10th, I'm buying 11/18 options. So are most traders. By 11/15 traders have rolled and migrated to the 11/25 options. From 11/18 to 11/25 that's 7 DTE exactly.

MayoLovinApe t1_ix5vcid wrote on November 20, 2022 at 11:52 PM

Sweet good looks. Ill write that down. Try to avoid trading on weeks that monthlys expire. I noticed the market ranges mostly

TheOhioAviator t1_ix5wi9j wrote on November 21, 2022 at 12:01 AM

Hey IMO depending on which contracts you're talking about when those monthly futures expirations come up, you might want to watch the markets, you'll find the market will love what traders are buying after, moves markets, when them bad boys come up, you can see a change of heart, bullish tendencies or bearish, adds to long term movement IMO.

TheOhioAviator t1_ix5vhly wrote on November 20, 2022 at 11:53 PM

Check it out on your platform, look at the chains 1 week out and see the options volume and OI, the difference even between them and the ones that expire tomorrow. You will see SPY options 1 week DTE with over 100k OI trading 30k volume. Those are the contracts to be on. View the theta and delta for both 1 week DTE and one that expires tomorrow. You'll see why you can't trade 1-3 DTE. It's just not "safe" IMO