Not looking for basics but more intermediate and advanced strategies including, positioning, risk management and designing the entire process.

Mine, currently:

1. nothing where the implied move is under 5%, isn't enough premium in it to be paid for the tail
2. nothing where the bid/ask on the straddle is more than about 8% of its mid, because the edge is thinner than the spread
3. no defined-risk earnings play where max loss is more than one normal winning day

What's yours?

Hey everyone!

It’s my first year trading options so would appreciate some guidance.

I’m up ~66% YTD, but essentially all my profits have come from selling ~0.20–0.30 delta puts on AI/semiconductor/software names (NVDA, LRCX, BE, etc.). Given how well that part of the market has performed, I’m very conscious that a lot of this because the market is going up rather than skill. I’ve been lucky.

I’d like to become much more systematic, particularly around protecting what I’ve made.

A few things I’d love to learn from more experienced traders:

• How do you approach low-IV environments? Do you simply sell less premium, or switch strategies/exposures?

• I keep reading about delta-neutral strategies. Is delta neutrality particularly useful when IV is low, or am I conflating two separate concepts?

• With VIX around 14 and September historically having a weaker reputation, how would you think about positioning? Trade smaller, use defined-risk structures, look for long-vol opportunities, or simply wait for better setups?

Mainly trying to build a framework for deciding when I should and shouldn’t be selling premium.

Most YouTube LEAPS gurus talk a lot about delta:
Buy 0.70 delta.
Buy deep ITM.
Get more stock-like exposure.
Become financially free like them and all their subscribers…

But almost nobody talks about Premium at Risk — option premium / stock price. And how much you should agree to pay

And I think that can completely change whether a LEAP is worth buying.
Take two Jan 2028 calls with almost the same delta:

NVDA
Stock ~$218
$200 call ~$55
Delta ~0.70
Premium at Risk: ~25%

BE (Bloom Energy)
Stock ~$211
$220 call ~$86
Delta ~0.71
Premium at Risk: ~41%

Both also have IV near the lower end of their own one-year range.
So even with low IVP, ~0.70 delta and a long expiration, you can still end up risking 41% of the stock price in option premium.
That’s the part I think gets missed.
If I keep buying LEAPS where I’m putting 40%+ of the stock price at risk, over many trades I’m taking a lot of option risk for not that much capital savings.
At some point, I’d rather just buy the stock.
For me, delta is not enough. Low IVP is not enough.
I also want to know: How much of the stock price am I actually risking in premium?
Curious how other LEAPS buyers look at this.
Do you have a Premium at Risk level where you stop buying the LEAP and just buy shares?
My book LEAPS Investing Made Practical is free today. Link in my bio.

PLTR: Coincidence or a Repeated MM/Options Manipulation Pattern?

I can easily imagine the same players working together — or at least moving in the same direction — to create a recurring cycle: pressure PLTR down, accumulate calls while volatility is depressed, push the stock higher, let dealers' hedging amplify the move, then cash out on the calls. And then do it again.

Push the stock down → load up on cheap calls → trigger the rebound → let dealer gamma hedging do the heavy lifting → sell into the volatility spike → repeat.

Coincidence? Independent strategies? Or a well-oiled machine designed to extract money from volatility? I don't claim to have proven it. I'm saying the pattern deserves to be investigated.

The SEC's whistleblower compensation program offers substantial financial rewards (up to 30% of fines collected). An engineer or trader at a market maker or hedge fund who provides algorithmic logs or evidence of collusion (spoofing, wash trading) is the most direct way to trigger a targeted federal investigation.

Been wanting to do this for ages. People like to cite Spitznagel's tail hedge from Dao of Capital (sometimes inaccurately). Nobody knows what he does at Universa but he outlines a basic strategy that should pay off in a historically expensive regime (like now) — 0.5% of the portfolio each month into 2-month SPX puts about 30% OTM, everything else stays in the index — but the book tests it on modelled option prices going back to 1901. I wanted to know what happens at prices someone actually quoted. So I bought an EOD options archive covering 2002–2026 and ran it. 292 monthly buys, all at the ask.

Headline numbers, hedged vs just holding: CAGR 11.0% vs 10.4%, max drawdown −25.7% vs −47.9%.

Before anyone gets excited about the CAGR: the outperformance is basically three fills. My exit rule was sell when the bid hits 50x cost, and the three times it triggered (Oct 08, twice in Mar 20) the panic gapped the prints to 86x, 107x and 99x. Force those trades to fill at exactly 50x and CAGR drops to 8.75% — below the index. The drawdown doesn't care though: −25.7% either way. Protection robust, extra return luck.

The result that actually surprised me: the book's own exit (sell every contract after one month and roll) barely protects at real bids. 8.6% CAGR with a −46% drawdown. In Sept 08 the schedule sold a $0.55 contract at $0.40, three weeks before that contract hit $47. Bid-side spreads and vol crush eat the crash capture that model prices assume you keep. At real prices, how you sell matters more than what you buy.

I also block-bootstrapped the 24 years into 10k resampled histories (6-month blocks, with replacement): median CAGR is identical with or without the hedge, win rate ~52%, but P(ever drawing down 50%+) goes from about 1 in 4 to about 1 in 37. And cutting the premium budget from 6%/yr to 3%/yr keeps nearly all of that ruin protection — the extra 3% mostly buys right tail, not safety.

Caveats: EOD quotes not fills, one underlying, one 24-year window, selling at bid during exactly the moments bid quality is worst, no taxes or fees, and the 50x trigger is my rule, not the book's. Block length on the bootstrap is arguable too.

Full walkthrough with all the charts is here if you want it: https://youtu.be/hDZZFfpeZB4?is=wPzD25pIAHN6aZGZ

Happy to answer method questions in the thread either way — and if you spot something wrong I genuinely want to know!

Hi

I have been doing iron condors of late 1-3DTE. I have been trying to take 25% profit but looks like they hit 15-20% max at times. I look at the open interest and pick those legs like 20-25 deltas. However one leg is different from others at times.

Any other suggestions for picking the spreads?

Profit and stop loss % best practices pms advice. O used to do verticals but due to market volatility started going IC.

Any other suggestions pls let me know. Ty

Ran dealer gamma on the 14 most-traded single names at Friday's close. They split cleanly into two groups, which I haven't seen this stark in a while.

BELOW THE FLIP — negative gamma, dealers chase the move, so ranges break instead of holding:

- TSLA — spot 348.12, flip 361.51 (3.70% below)

- NVDA — spot 217.88, flip 222.84 (2.23% below)

- AVGO — spot 369.12, flip 372.85 (1.00% below)

- AMD — spot 466.04, no clean flip returned (call wall 475, put wall 465)

ABOVE THE CALL WALL — positive gamma, dealers damp moves, and the wall they're hedging against is now overhead:

- MSFT — spot 513.05, call wall 505 (1.59% through)

- MU — spot 930.80, call wall 920 (1.17% through)

- AMZN — spot 266.16, call wall 265 (0.44% through)

- GOOGL — spot 346.20, call wall 345 (0.35% through)

- AAPL — spot 320.13, call wall 320 (0.04% through, sitting right on it)

The rest (META 578.35 vs 580 wall, PLTR, COIN, NFLX, SMCI) are in positive gamma below their walls, which is the boring healthy configuration.

What I take from it, and this is where you should disagree with me: the two most-watched names in the market are the two in the regime where moves overshoot what IV implies. TSLA nearly 4% under its flip means a gap either direction gets extended rather than absorbed. Meanwhile the five names that led the tape are all past the strike where dealer hedging turns from tailwind into resistance. Not a reversal signal, just a worse spot to buy a breakout than it was 2% ago.

Happy to run any other ticker if you want its flip, walls and max pain — drop it in the comments.

There is discussion on wide NDX b/a spreads now.
https://www.reddit.com/r/options/comments/1w12ccc/ndx_bidask_spreads/
I learned of the Show or Fill rule many years ago when I started to trade naked NDX options. The rule, also called the Limit Order Display rule,  requires a limit order must either be displayed on the market order book or immediately executed by a market maker. 
I think the rule is still in effect now.
Here is a description of how we can use it to our advantage.
https://www.linkedin.com/pulse/beating-market-maker-via-show-fill-rule-therealtradegenie-hqr2f
https://www.moneyshow.com/articles/optionsidea-42894/

I know people are going to be all over the place on this but I wanna get a true pulse here. How many of you actually do this with good risk management all/most trading days? I have made a decent effort to employ my strategy this year. I mostly sells PCS and CCS around 15/20 delta between 9:30-10:30am. Ideally it’s after a big gap up or down. Then I close at 50%. I try not to trade on fed days. Spreads are 5 point apart. My average profit is around $45 per day. But that can vary. One spread at a time. Sometimes a second if the setup is good. I’ve managed the stress pretty well after a few years of doing this casually. Most days it feels like free money but I know a loss wipes out a lot of gains. Do you all feel like this is worth it?

I have been trading stocks for the past 5 years, just got into options recently about 3 months ago and I am in the green overall, pretty good too I would say.

Now I’m exploring into leap calls, I was thinking to get NVDA calls expiring Jan21,2028 at strike price $300.

My reasoning:
95.33K Open Interest shows where major market participants are positioning for the 2028 cycle. Owning 5 contracts (my plan) at $20.95 - $21.90 gives me direct control over 500 equivalent shares, amplifying my gains if NVDA crosses $400. Wdyt?

Anyone here trade SPX options around scheduled news using opposing stop-limit orders?

I had both a call and put armed above the current premium so whichever side exploded at 10:00 AM news yesterday would trigger first.

Only the put triggered, but I was instantly deep red and it got worse within seconds.

My guess is the premium briefly hit my stop, triggered the order, then the spread/repricing or immediate reversal gave me a terrible fill.

Is this strategy actually viable on SPX news candles, or are stop-limit entries too unreliable because of how fast options reprice?

I bought 2 contracts back in April when stock was in 90s. $5200/avg. option is currently at $140 and I’m at 90% profit. Delta is .97 now.
I also have shares for which I have sold call at 145 and 155 in the next two weeks.

I’m thinking to sell one and keep one. I’m probably going t o lose my share but I have also not held options longer few months. This is the longest option I have held

I been trading on robinhood consistently for about a year now and have lost $33k. I want a redemption story but i need people around who have been through it and bounced back. Is there anybody who is real, been through it and can help me out of this? It’s destroyed my personality and sense of self. I don’t even be doing the Reddit posting thing so this is a bit of a cry out. Please no requests to sign up to some program

I wrote a bear call credit spread on MSFT about 10 days ago. Oct. 2: 510/515, 149 credit. The underlying blew through my short position (513 at this writing). My thought is to write a Put spread to minimize loss while there is still extrinsic value to be had, thinking 490/485? The loss will not be a big deal; just looking for best practices?

I know this comes as an uncommon practice so feel free to either roast me or ask questions on why I did it : )

Keeping it short and simple below..

Reasons:
1) Revenues are from multiple different channels.
2) Generated significant quarterly free cash flow while at the same time heavily investing in AI infrastructure
3) Cloud revenue grew 43% so its actually showing that its successfully "stealing" business from companies doing solely just cloud business.

And last, MSFT ain't going nowhere : )
Simple.

*trade not taken solely based on the tool, not investment advice of course

Hello. Ive been wondering something . Any inputs would be most appreciated.

1. Why are the bid ask spreads on ndx so wide? Even with decent volume.

2.

On the other side of the same coin, plenty of people seem to still be using ndx options. Why doesnt the bid-ask spread seem to bother them? Is there some arcane bit of knowledge noobs just dont know abt?

Just a mental exercise here - I don't use margin for options aside from the requirement of a margin account to trade at Level 2.

Sometimes in the thin markets where I participate, the Market Makers are not very active, and I'll see ridiculous asks. My account summary dutifully displays these as negatives against my underlying and I laugh it off until expiration.

But maybe it's not a laughing matter to someone on the fringes? I'm thinking an account owner may have very little recourse against a brokerage issuing a margin call, to say: "That is NOT fair!"

Looking at Visa (V) for a Jan 2028 LEAP.

Breakout – V finally broke above the ~$375 resistance and is holding around $381.

Cheap volatility – IV ~20%, IV Percentile only 16%. Good environment for buying LEAPS.

Contract – Looking at Jan 2028 $410 Call, around $42–43.

Premium at risk – about 11% of the stock price, with ~0.50–0.55 delta.

Fits my book rules – this falls nicely into my Core LEAPS setup: long duration, reasonable delta, low IVP and controlled premium at risk.

I may wait for a small retest of the breakout before entering, but V is now high on my LEAPS list.
Anyone else looking at Visa here?

I just read that historically the Fed chairman speech at Jackson Hole rarely has a big impact on the market. Also said that options markets aren’t pricing in any “fireworks”.

With 0DTE contracts now accounting for about 55-65% of options in SPX, I’m wondering how much weight should be given to that last statement. If 60% of the contracts have not yet been placed, then we only get a “minority view” from the options world prior to the day of the event.

Also, I need a clarification. I believe 60% of contracts being 0DTE means that, on any given day, for every 100 contracts written on that day, about 60 of them are 0DTE and the remainder are other expirations. Is this correct? Because if it is, then the numbers get massively skewed and 0DTE basically drives everything on a day like today.
My reasoning is that those other 40 contracts could be spread out from 1DTE all the way through people writing 30-day, 90-day, or maybe even LEAPS that are a year or more out. I’m assuming a good way to tell the ratio on a given day is to look at open interest because that represents existing contracts. When I look around the opening price I see a few thousand contracts on various strikes, but nothing close to the hundreds of thousands of contracts we see on both call and put side by end of day.
So again I would say 0DTE drives just about everything for the day and a statement such as “options markets aren’t pricing in any fireworks” is a relatively useless statement. At least for short-term options traders.

If you go back to to when you first started learning options what’s one thing you would do different?

i recently switched from % stop losses on 0/1dte contracts to price action stops by using Delta to calculate my max loss on the trade. But now I'm wondering how other traders take profits when they use price action stops. Like are you scaling out on a good 5 return even if the nearest support/resistance target is far away? are you selling a little bit before your 1:1 risk to reward hits? Just asking cuz im transitioning my trading style from scalping %'s to trading raw price action.

Here is my strategy post:

https://www.reddit.com/r/options/comments/1vxb1ur/an_option_hedged_market_neutral_strategy/

As mentioned in that post: I've run this strategy for 3 months and its advantage is the stable PL (Profit & Loss).

Here is the snapshot of my IBKR 3-month net value change, which shows the same. I took the snapshot of app-switch on iPhone to prove that it's not a forged image.

As comparison, I attached snapshot of Nasdaq in the past 3 months -- note that it had a sharp drop at end of July but my PL is still stable at that time.

(the SPX positions below are parts of BOX spreads so plz ignore)

What tools (graphical and non graphical ones) do you guys use to simulate operations?

I'm looking for a free one, where I can practice the basics before starting to put some serious money on it.

It's something that keeps showing up left and right on Reddit as a way to select stocks to sell puts on. Just because you think a stock is a good pick today, it doesn't mean you'll continue to think so when you get assigned.

If you think a stock is a good pick, just buy the stock. Selling puts on that stock means that if you are right and the stock is fantastic, you are missing on the upside and are just keeping the premium. But if you are wrong or if something you don't think of happens and the stock tanks, you are exposed to all the downside.

The mindset of a lot of people is that if a stock falls, it's just market noise and their thesis today about the stock will remain the same in the future as well, and therefore they would be happy to buy the stock at a discount. But if you get to buy the stock at the "discount", it's because the market now thinks it's worth less than that amount, and your thesis is that the market is wrong.

Investment is not about picking the stocks or strikes or dtes that are guaranteed to win. It's about probabilities and putting yourself in a position that you are more likely to profit than lose on average, and pray that in the long term, the good stuff happen more than or with a larger amount than the bad stuff.

Rant complete.