Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figures in 3 months, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
Thank you so much . I went thru several webinars but none of them meet your level of detail and anyone can understand complex strategies being explained. Thank you o much.
@@OptionsPlay Tony, what's the benefit in choosing a calendar instead of a diagonal? With calendars, the short leg's delta is higher than the long leg. That seems scary to me.
Good video! I agree with almost everything you say, but what you said about selling much shorter options against the long leg. The shorter you go, the more theta per day, but the less overall premium you sell against the cost of the long leg, and if you get a big move/gap, that can have more risk than selling, lets say 2-3mo. Vs a 6mo long leg - the latter reduces the overall cost of the long leg and gets a wider theoretical PnL at exp. Easier to manage when the underlying has a bigger move, but, yes, lesser theta per day. I recently started trading these calendars. Currently in an experimental trade on TSLA where i have multiple calendars on to have a wider PnL range, and looking to manage the assignment risk on those as the trade goes, looking to collect an overall decent amount of theta on the trade, and avoid assignment. Put it on 10 days ago. 20 to go on the short side. Havrn't seen a $ in theta yet, possibly due to IV changes going into TSLA earnings. Don't known if its a good or bad idea, we'll see. Excited about the trade, i hope i manage it well, and not do my ass in.
Regarding the point at 34:00, calendar spreads actually benefit from increase in volatility, which is the opposite behavior from straddles. For a limited risk position with similar volatility behavior to a straddle, you would need a butterfly
Nice man! Always love seeing you in the morning. Good stuff. Someone calls this the money press method if I’m not mistaken. Selling the weekly puts with longer term put protection via diagonal calendar spread.
Tony when I hear you I can feel conviction and do get a sense of understanding of concepts. Keep like 👍 this. I am not a member yet. Still a trial member. but do you follow the same trades exactly what your site recommend?
What things do you look for on the IV charts for a stock? Should the IV chart be higher for the short term sold vs the long term? Is the IV chart for a stock more valuable than the VIX IV?
Hi, thanks for the presentation. I have been playing with diagonal call spreads on bitcoin and it seems a very good strategy. You buy an ITM longer term call (3 months) and keep writing shorter ATM calls (weekly) against it. Up is always good, sideways is good and even moves that go moderately down are good, since the profits from the written calls cover/exceed the losses of the bought call. The only variation where it goes wrong is when you get a fast move against you, down in this case, when you'll make a loss. But nothing really horrible. In fact, it's so good that I feel I must be missing something. What am I overlooking?
@@Dylan-zl4uk Deribit.com, they have the most volume. Options ranging from daily, bidaily, weekly, monthly, quarterly to triquarterly time frames. Spreads can be large tho, especially for ethereum, so you shouldn't overtrade. Both bitcoin and ethereum options are available. Possibly more in the future,
Sir, in calender spread Do option buyers or option sellers benefited from time decay factor? And can you mention time Decay for calender and diagonal calender ?
Assuming the short option isn't already effectively worthless, what's the reason for closing it or rolling it out 2 weeks before expiration? Do you wait in those circumstances, until it's effectively worthless, or say a week or even a day? Especially when selling weekly options, I'd assume you wait until the last day before adjusting the short option position, right?
If I understand this trade correctly, "ITM monthly is being sold for $7. If as you said, you want it to be at 130 (which is in the money) how does one not get exercised on at expiry? Do you sell before it expires? Ive seen a couple of opportunities but didn't take advantage due to lack of understanding this type of trade.
Of course. The theta decay can only be shown off of the front month and the long dated option but when you roll the short option to the next month or week you will get a new theta decay curve for that new spread and so on.
At 11:00 with the calendar spreads, how do we know which back months to buy? Wouldn't it make sense to buy back months YEARS out so there is almost no decay?
@@stevefang3922 neither will an option unless you hold it to expiration and which case it violates the rule of closing your position when you have lost 50% of the premium. This is like using a stop loss on a stock when it goes down 3.5% or 5%.
Is there any simple tool for figuring out the capital requirements for diagonals? I keep running into major problems with that. Plus, it's not fun to feel like my positions aren't optimized.
What about negative delta diagonal spreads? That's where I've had trouble. I've also had issues with LEAP diagonals where it's possible for the underlying to double and I would lose money, so they treat it almost like selling a naked call or something. Thx again!
Tony , if apple open the next day 133 or even 131 I will start making money. Just want it to clear that up. I don’t need the stock to move 13 points to make money. If I am bullish and I buy today and apple open next day above 130 I am already profitable and I can sell and take my profit. Your explanation only accurate if I hold until expiration and nobody does that anyway.
What do you think of this trade? 1/17/21 Long: CIICW warrants for 9.26 (11.50 exercise price) Short: CIIC Feb 30.00 call for 3.70 (CIIC now at 29.97) The spread between the warrant price and the share price should narrow as the merger date approaches (sometime in Q1 2021).
I'm pretty sure I'd never use a calendar spread for an earnings play. Sell a straddle or strangle, sure...but calendars benefit from a rise in IV, not an IV crush.
Two weeks ago I bought a call contract for security XYZ with an expiration date of 21-Jan-2023 and a strike price of 120. The current price of the security is $85. Based on my research, I think there is a low probability that XYZ stock price will be greater than $99 by 01-Apr-2021. Today, I sold a call contract with an expiration date of 01-Apr-2021 and a strike price of $99 because I do not think the stock price will get to $99. Is this a diagonal spread?. If not, is there a name for the strategy?
Traders who sell options are not speculating. They are taking the "house" side of the bet and their probability of profit is higher than those going long options
Sow why is your example at 130 and the slim chance scenario where the stock does "NOT move" after 30 days??? This is not realistic ...show us a real scenario where it moves even a small amount. Also why not buy a long call well above the stock price where it is cheaper or even a leap call option. This way you can sell multiple sell options weekly or monthly expiration against it but always staying out of reach of the climbing stock price??? ...yes stocks can collapse quickly but they seldom if ever fall upwards And finally after a few expired sells that make $$$ ...it would not hurt to lose one or two even if.
it started well but he left out, under a lame excuse, the most important factors; the possibilities of the trade going against you and how to mitigate. Bad!
![Chuckyy - Devil Hours [Official Music Video]](http://i.ytimg.com/vi/f3wZGj0VnZU/mqdefault.jpg)
Been watching, listening, and paying attention to all of predictions and forecasts since early Covid. He hasn't disappointed yet 👌
Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figures in 3 months, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
@@BrunoLuke lookup MARTHA ALONSO HARA , this is her name online, she's the real investment prodigy since the crash and has helped me recover my loses
@@harrisonjamie794 Despite the economic crisis and the rate of unemployment now is the best time to invest
@@BrunoLuke Investment now will be wise but the truth is investing on your own will be high risk. I think it will be best to get a professional👌
@@harrisonjamie794 Thank you, Going through her profile on her webpage out of curiosity, and surprisingly she seems proficient. I appreciate this.
This is the best diagonal spread explanation I've ever heard. Thank you!
Best educational option trading video I have seen. You provide a lot of knowledge that I don’t find from other places. Thank you!
Thank you Jun! I try my best
Thank you so much . I went thru several webinars but none of them meet your level of detail and anyone can understand complex strategies being explained. Thank you o much.
You're very welcome!
Tony I think you are one of the best teachers out there. Truly enjoy your postings. Thank you.
I appreciate it!
You are THE Best anytime anywhere in Options. When I have time I'm keep listening to your lecture. Thank you for everything you provide.
I really appreciate that, thank you!
Tony, that was the best explanation of a calendar spread I've heard. Thank you!
Thank you, Joshua. Glad that ithis helped!
@@OptionsPlay Tony, what's the benefit in choosing a calendar instead of a diagonal? With calendars, the short leg's delta is higher than the long leg. That seems scary to me.
Good stuff, hands down. These are some of the best videos I've come across for learning this stuff.
Good video! I agree with almost everything you say, but what you said about selling much shorter options against the long leg. The shorter you go, the more theta per day, but the less overall premium you sell against the cost of the long leg, and if you get a big move/gap, that can have more risk than selling, lets say 2-3mo. Vs a 6mo long leg - the latter reduces the overall cost of the long leg and gets a wider theoretical PnL at exp. Easier to manage when the underlying has a bigger move, but, yes, lesser theta per day. I recently started trading these calendars. Currently in an experimental trade on TSLA where i have multiple calendars on to have a wider PnL range, and looking to manage the assignment risk on those as the trade goes, looking to collect an overall decent amount of theta on the trade, and avoid assignment. Put it on 10 days ago. 20 to go on the short side. Havrn't seen a $ in theta yet, possibly due to IV changes going into TSLA earnings. Don't known if its a good or bad idea, we'll see. Excited about the trade, i hope i manage it well, and not do my ass in.
Thank you for another fantastic video. I do learn a lot and optionsplay is great tool.
Happy to hear that!
The best training on RUclips
Thank you so much!
Great value. Thank you. I am glad I found your channel
You are a talented sincere teacher.
Very best and needed explanation. Thanks a lot.
Glad you found it to be helpful!
Regarding the point at 34:00, calendar spreads actually benefit from increase in volatility, which is the opposite behavior from straddles. For a limited risk position with similar volatility behavior to a straddle, you would need a butterfly
Thank you Tony for the excellent teaching! 👍
Thank you!
Thanks!!!! This is awesome
Do you check for volatility and see the option value ?
Awesome video! Thanks for the information.
Thanks for watching!
Nice man! Always love seeing you in the morning. Good stuff. Someone calls this the money press method if I’m not mistaken. Selling the weekly puts with longer term put protection via diagonal calendar spread.
Glad I stumbled on this video! Subscribed
Thanks so much! I'm putting out a lot of content coming up so stay tuned!
Tony when I hear you I can feel conviction and do get a sense of understanding of concepts. Keep like 👍 this. I am not a member yet. Still a trial member. but do you follow the same trades exactly what your site recommend?
What things do you look for on the IV charts for a stock? Should the IV chart be higher for the short term sold vs the long term? Is the IV chart for a stock more valuable than the VIX IV?
Wow excellent presentation!
THANK YOU!
My pleasure!
Excellent information ty 🙏🏿
Thank you!
@@OptionsPlay You’re welcome 🙏🏿👍🏿💎
Tony, could you do a webminar on butterfly, unbalanced butterfly and back / front ratio ?
Assuming you're bullish on the underlying stocks, are they any advantages to diagonal put spreads over diagonal call spreads or vice versa?
How do you tell how much premium you collect per day, does the theta in the column tell you the value earned per day
Tony, to construct an ATM calendar spread, when should I use call vs put? Does IV imbalance (Put > Call) come into play?
Hi, thanks for the presentation. I have been playing with diagonal call spreads on bitcoin and it seems a very good strategy. You buy an ITM longer term call (3 months) and keep writing shorter ATM calls (weekly) against it. Up is always good, sideways is good and even moves that go moderately down are good, since the profits from the written calls cover/exceed the losses of the bought call. The only variation where it goes wrong is when you get a fast move against you, down in this case, when you'll make a loss. But nothing really horrible. In fact, it's so good that I feel I must be missing something. What am I overlooking?
What platform do you use to buy Bitcoin options ?
@@Dylan-zl4uk
Deribit.com, they have the most volume. Options ranging from daily, bidaily, weekly, monthly, quarterly to triquarterly time frames. Spreads can be large tho, especially for ethereum, so you shouldn't overtrade. Both bitcoin and ethereum options are available. Possibly more in the future,
@OptionsPlay
I have sent an email to the address you've given, but it bounced. I fear you'll have to be less cryptic for this cryptonaut.
Sir, in calender spread
Do option buyers or option sellers benefited from time decay factor?
And can you mention time Decay for calender and diagonal calender ?
Thank u
You're welcome!
Assuming the short option isn't already effectively worthless, what's the reason for closing it or rolling it out 2 weeks before expiration? Do you wait in those circumstances, until it's effectively worthless, or say a week or even a day? Especially when selling weekly options, I'd assume you wait until the last day before adjusting the short option position, right?
Hi Tony, what is the strategy to repair/roll the diagonal call when the stock plunge 20% to 30%.
If I understand this trade correctly, "ITM monthly is being sold for $7. If as you said, you want it to be at 130 (which is in the money) how does one not get exercised on at expiry? Do you sell before it expires?
Ive seen a couple of opportunities but didn't take advantage due to lack of understanding this type of trade.
How check volatile ity before sell pit
Your calendar spread example - Ho much do you actually have to pay when you enter into the selling of the $130 call option @$7?
when you sell a call, you don't pay. You collect premium.
The Theta decay curve you show, is ONLY for ATM options!
will lose money on option price bid and ask spread eventually plus commission, since most brokers charge 0 commission on stock these days
Of course. The theta decay can only be shown off of the front month and the long dated option but when you roll the short option to the next month or week you will get a new theta decay curve for that new spread and so on.
is the term "horizontal spread" synonymous with "calendar spread'?
At 11:00 with the calendar spreads, how do we know which back months to buy? Wouldn't it make sense to buy back months YEARS out so there is almost no decay?
That would be very expensive
would this be better than just doing a leap debit spread?
35:18 selling less than 30 days "exposes you to gamma risk"... Do you mean that price can whip around violently or gap up outside the profit tent?
Around 59:35, is spread more capital efficient than long (call/put) leap + short recent call/put?
you really explained that graph
Thank you!
This guy is fun!
Thanks
I am thinking of doing some OTM put calendar spreads on GME. Any thoughts about the best strikes and exp dates?
It moves so much. It would be hard to give you exact strike prices
Okay 👌🏿
If you can't make money trading shares, what's the point of trading option
LESS CAPITAL, LESS RISK. You also aren't locked into long term investing.
@@KyleTate shares won’t expire wordless
@@stevefang3922 neither will an option unless you hold it to expiration and which case it violates the rule of closing your position when you have lost 50% of the premium. This is like using a stop loss on a stock when it goes down 3.5% or 5%.
Use the probabilities to work in your favor. Be a seller of premium, not a buyer.
Is there any simple tool for figuring out the capital requirements for diagonals? I keep running into major problems with that. Plus, it's not fun to feel like my positions aren't optimized.
Capital requirement of a diagonal is easy, it's just the debit of the diagonal. That's it, no additional margin required.
What about negative delta diagonal spreads? That's where I've had trouble. I've also had issues with LEAP diagonals where it's possible for the underlying to double and I would lose money, so they treat it almost like selling a naked call or something.
Thx again!
Tony , if apple open the next day 133 or even 131 I will start making money. Just want it to clear that up. I don’t need the stock to move 13 points to make money. If I am bullish and I buy today and apple open next day above 130 I am already profitable and I can sell and take my profit. Your explanation only accurate if I hold until expiration and nobody does that anyway.
nice .....
What do you think of this trade? 1/17/21
Long: CIICW warrants for 9.26 (11.50 exercise price)
Short: CIIC Feb 30.00 call for 3.70 (CIIC now at 29.97)
The spread between the warrant price and the share price should narrow as the merger date approaches (sometime in Q1 2021).
So far, my trade has been working out great. Buying underpriced warrants and selling calls against them appears to be a good trade.
4
I'm pretty sure I'd never use a calendar spread for an earnings play. Sell a straddle or strangle, sure...but calendars benefit from a rise in IV, not an IV crush.
So would you recommend getting out of your longer dated call before earnings?
Two weeks ago I bought a call contract for security XYZ with an expiration date of 21-Jan-2023 and a strike price of 120.
The current price of the security is $85.
Based on my research, I think there is a low probability that XYZ stock price will be greater than $99 by 01-Apr-2021.
Today, I sold a call contract with an expiration date of 01-Apr-2021 and a strike price of $99 because I do not think the stock price will get to $99.
Is this a diagonal spread?. If not, is there a name for the strategy?
Yes its a diagonal spread bc you have different strikes and different expirations.
Yes, a risky diagonal. If something happens to make the stock move up rapidly, you will lose money
2
I wish you would use the word “speculators” instead of “investors” when you talk about trading options.
Traders who sell options are not speculating. They are taking the "house" side of the bet and their
probability of profit is higher than those going long options
You did not cover both possibilities for a calendar trade. Smart.
Sow why is your example at 130 and the slim chance scenario where the stock does "NOT move" after 30 days??? This is not realistic ...show us a real scenario where it moves even a small amount. Also why not buy a long call well above the stock price where it is cheaper or even a leap call option. This way you can sell multiple sell options weekly or monthly expiration against it but always staying out of reach of the climbing stock price??? ...yes stocks can collapse quickly but they seldom if ever fall upwards And finally after a few expired sells that make $$$ ...it would not hurt to lose one or two even if.
it started well but he left out, under a lame excuse, the most important factors; the possibilities of the trade going against you and how to mitigate. Bad!
Pls make videos shorter
This is more of a webinar. It's helpful for people who need more thorough teaching. I appreciate the length and attention to detail.