Options Playbook Radio (general)

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 CDT

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 CDT

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 CDT

Costco (COST) has earnings coming up next week. We're going to do a backspread with puts, or a ratio volatility spread. 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
  • COST will announce earnings on 10/4
  • What does the chart say?
  • Let's do a backspread with puts
  • What's the expected move?
  • What's our take?
  • Selecting the expiration and strikes
  • What if we're wrong?
  • What if we're right?
  • What is the maxium risk? Reward?
  • What happens the farther you go out in time?
  • Does it work for every underlying?

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: OptionsPlaybookRadio227.mp3
Category:general -- posted at: 2:01pm CDT

Tilray Inc. (TLRY) has gone up over 100% in two days. With stocks that move like this, it's a great learning experience. 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's NKE diagonal spread
  • What did we want to happen?
  • What actually happened?
  • What does that mean for the contract we bought?
  • What do to now? Let's roll!
  • Crazy moves in TLRY
  • Why are the puts so pricey?
  • What would Brian do? (WWBD?)
  • Super high implied volatility
  • 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: OptionsPlaybookRadio226.mp3
Category:general -- posted at: 2:10pm CDT

Nike (NKE) has been in the news a lot lately and will announce earnings on September 25. Let's take a look at a diagonal trade. 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
  • What happened to the SPX?
  • Did you get out, or did you get the stupid award?
  • NKE is near all-time highs
  • Setting up the trade
  • Selecting strikes and expirations
  • Pay attention to the delta of the trade
  • Addressing different scenarios

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: OptionsPlaybookRadio225.mp3
Category:general -- posted at: 3:22pm CDT

Now that earnings season is over, it's time to get back to the basics. 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
  • Setting up a long put butterfly in SPX
  • Where is the SPX now?
  • Where is volatility?
  • Selecting strikes
  • Using the nearest-term expiration
  • Settlement is at the close on Friday
  • What's the upside? Downside?
  • What do we want to happen?
  • How to roll into a short put spread
  • Remember commissions!

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: OptionsPlabyookRadio234.mp3
Category:general -- posted at: 1:30pm CDT

Now that earnings season is over, it's time to get back to the basics. 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
  • What happened if you stuck around to the close on Friday?
  • How did we do?
  • Markets are closed for Labor Day
  • How do we take the holiday into account?
  • Where is the S&P 500 right now?
  • Selecting strikes and expiration
  • What do we want to happen?
  • What if it starts to go south?
  • How to turn this into a butterfly
  • 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: OptionsPlaybookRadio233.mp3
Category:general -- posted at: 1:24pm CDT

Huddle, up listeners! It's time for Brian and Mark to take on listener questions, including:

  • Options question of the week: Earnings season in in full swing. Which names will dominate your options trading this week?
    • 47% - AAPL
    • 37% - TSLA
    • 6% - GPRO
    • 10% - CBOE
  • Question from Imhad1: Is HMNY now the most option-like stock ever? Back to $.08 after reverse splitting up to $14. Crazy! Who would buy an option on this thing?
  • Question from Ling: I've heard some educators say that you should never hold out for the max profit in an options spread trade because that means you held onto it too long. Is this the case? Do you agree? Thx and enjoying the handbook.
  • Question from Flyguy: Hey what do you guys do with your long calendar spreads? Do you close out the short leg if the stock doesn't move then keep the long leg or just close the whole spread out?
Direct download: OptionsPlaybookRadio221.mp3
Category:general -- posted at: 1:18pm CDT

We are in the heart of earnings season, and next week a lot of the FANG stocks will announce. Two weeks ago, we did a diagonal spread in GOOGL. Let's follow up on how that went, and look at a skip-strike butterfly, as well. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • How was the diagonal spread set up?
  • What happened to GOOGL since the paper trade was established?
  • What are we doing now?
  • Setting up the skip strike butterfly
  • Selecting strikes and expiration date
  • What is the cost?
  • Remember implied volatilities!
  • What happens if we are wrong? Right?
  • 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: OptionsPlaybookRadio219.mp3
Category:general -- posted at: 2:43pm CDT