Options Playbook Radio (general)

When the market conditions are right, it can be a good time to trade a butterfly in the S&P 500. Now is the time. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • Where is the S&P 500 index right now?
  • Buying a December 7 butterfly
  • Selecting strikes
  • What is the total risk?
  • What do we want to happen?
  • What's the maximum upside?
  • What is the market forecast?
  • What to do if the market moves against us?
  • Capital requirements
  • And more...

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio237.mp3
Category:general -- posted at: 1:39pm CST

How can stock investors use options? You've come to the right place. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • A review of the AAPL collar from two weeks ago
  • What about capital gains?
  • Remember we had a small credit
  • Where are we now?
  • What about additional risk?
  • What's an alternative? Using an example with FB
  • Using a FB option as a surrogate for stock
  • Setting up the trade
  • Selecting expiration and strike
  • Remember, one option for every 100 shares of stock

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio236.mp3
Category:general -- posted at: 2:09pm CST

Huddle up, traders! For your listening pleasure, Mark and Brian answer your burning options trading questions, including:

  • Question from Barry Brown - Good morning. Have the show archives been withdrawn or are they still available? Question: If we put on a poor man's covered call position and the price moves up the short call, when do you recommend rolling, etc? Thank you. Your stuff is great. Really enjoy all you efforts. Thank you.
  • Question from Douglas Tilley - Hello! Regarding long stock substitution:
    1. With call options, are deltas additive? I.e. why are (2) 40-delta calls so much cheaper than (1) 80-delta call? This seems like buying equivalent total delta for about half the cost.
    2. For more accurate stock substitution, do you ever use the technique of buying an ATM call while selling an ATM put? (Vs. buying calls for a desired total delta).
    What are the pros and cons (or nuances) of the 2 methods? I do notice that the 2nd method definitely requires more buying power, due to the short put. Thanks for all the education - D Tilley, DDS
  • Question from Splitsville - Why is long put/covered call a "collar" while short put/long call is a "risk reversal." Never understood that one.
Direct download: OptionsPlaybookRadio235.mp3
Category:general -- posted at: 4:09pm CST

It's always a good idea to review basics. Today we're looking a covered calls, and it's cousin, collars. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • Lots a bad news around Apple
  • What to do approaching the new year?
  • Thinking about capital gains, taking losses
  • What is the scenario?
  • What will selling a covered call do?
  • What is the risk? Reward?
  • What would a collar look like?
  • What would it cost?
  • Risk and reward

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio234.mp3
Category:general -- posted at: 2:49pm CST

HD is announcing earnings soon. Let's look at how to set up a straddle to cap risk. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • What's happened since last week?
  • What did we learn from the NVDA backspread from last time?
  • What happened to the one without earnings?
  • What happened to the one that contained earnings?
  • Let's take a look at Home Depot
  • Earnings are coming up
  • Setting up the trade
  • We know the max risk and max upside
  • How many contracts should we do?
  • What is our rationale?
  • What's the goal?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio233B.mp3
Category:general -- posted at: 11:14am CST

Nvidia is announcing earnings soon. Can we expect a dead cat bounce on the stock? You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • What has NVDA been up to lately?
  • NVDA has an earnings announcement on 11/15
  • Selecting expiration dates
  • Where is implied volatility for the expirations?
  • What are our expectations for IV?
  • Putting on a backspread with calls
  • Setting up the trade
  • What is the risk?
  • What do we want to happen?
  • Which to choose? Why?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio232.mp3
Category:general -- posted at: 4:36pm CST

Being in the heart of FAANG earnings season, let's look at GOOGL and AMZN. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • What is happening in the markets right now?
  • What about GOOGL and AMZN, specifically?
  • What are the expected moves?
  • What is our strategy?
  • We're looking for positive theta, but negative vega
  • Let's look at a GOOGL skip-strike butterfly
  • Selecting strikes and expiration
  • What is the cost? Maximum risk? Remember margin!
  • Remember the risk of gap-up or gap-down
  • What do we want to happen?
  • What about AMZN?
  • What is the expected move?
  • Selecting strikes and expiration
  • What is the maximum risk? Reward?
  • What do we want to happen?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio231.mp3
Category:general -- posted at: 2:17pm CST

Huddle up, listeners. It's time for Mark and Brian to answer your questions.

  • Question from BuseKrus D - New to options, and working with a small account size. Looked to put on a trade with a strategy from the playbook (Christmas tree butterfly I think) with a 57-60-66 2x3x1 call fly for a total debit of 1.30. I've always heard that for a defined risk debit trade the max risk is the amount paid. However, the brokerage was saying I needed around 740 in my account to be able to put on the trade. Is there an explanation? Is the capital required to put on a trade greater than the possible max loss on defined risk debit spreads? Thanks.
  • Question from Ron S6 - What's your suggested minimum account size to start trading options?
  • Question from Lance Everett: Hello again Brian. Still enjoying the options playbook radio program. It's my quick options education fix for the week. I listen on my commute to work every Thursday. I have a few questions for your next Huddle episode if don't mind. If you can only answer one then that's fine too.
    1. You talked front spreads on episode 227. Do you ever use more traditional ratio spreads- outside of repair scenarios, of course? Bonus points if you know where the term front spread came from.
    2. What are your thoughts on the crypto boom? No options yet but they are coming. Is Ally planning to jump on the train?
    3. Do you ever use short calendars - so selling longer term and buying the near term?
    4. Is there a sequel to the playbook in the works? Although the show is kind of like an ongoing live update/ sequel so that's probably better. Thanks again for making my Thursdays fun and informative.
Direct download: OptionsPlaybookRadio230.mp3
Category:general -- posted at: 11:33am CST

Let's go back in time and review the last two weeks' worth of trades, including:

  • Bearish COST backspread
  • What was the trade?
  • What did we want to happen?
  • How did it turn out?
  • What did we learn?
  • Then there was a NFLX calendar
  • What was the trade?
  • What did we want to happen?
  • What did happen?
  • Let's look at the VIX
  • What about a TSLA fly?
  • Setting up the trade
  • What is the cost?
  • What is the upside?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio229.mp3
Category:general -- posted at: 3:13pm CST

Earnings in FAANG stocks are coming up, with NFLX leading the way on 10/16. We're going to do a long calendar spread with calls. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • A review of last week
  • Why a calendar spread?
  • Where is NFLX now?
  • Earnings are released on 10/16
  • What is the expected earnings?
  • Selecting a strike
  • Setting up the trade
  • What is the maximum risk? Reward?
  • What do we want to happen?
  • What is the net delta?
  • And more

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio228.mp3
Category:general -- posted at: 2:24pm CST