Humble

Margin account needs 10k starting balance. I think it could be related, and I would recommend margin account anyway for some of our other trades (SPY/TLT combo and VIX trades for example will definitely require margin account).

This doesn't make sense. You need to contact them and ask. There should be no margin requirement on this trade besides the debit.

Another thing to consider is hedging with futures. For example, if you buy a call and it goes up and you don't want to sell it the same day, you can sell the futures against it. Of course you need to calculate the number of contracts carefully.

Selling strategies like condors, flies etc. are usually gamma negative. So they obviously won't benefit from big move.

We need to see how the prices are. If the stocks are volatile, the prices might already reflect that, and if IV comes down and the stock doesn't move, the trade will suffer. I still prefer to trade expirations that are supported by upcoming earnings.

Please understand that I need to be very careful not to give personal investment advise. I'm probably not the right person to ask regarding such positions anyway because I trade non-directionally and don't really care about stock valuations. However, based on my experience from the times when I was trading stocks, stocks like NFLX are completely unpredictable. You might think valuation is crazy, but they keep going up. Of course the moment you cover the short, the stock starts to go down, and you think the market has something personal against you.. This is exactly why I stopped even trying to predict stock prices and valuations. Not syaing it cannot work, a lot of people are doing it successfully - just not my cup of tea.

First of all, the key to successful trading is risk management and position sizing. Selling naked options on a stock like NFLX is never a good idea in my opinion. If you do it, you should never allow the short calls go ITM. Of course when you do it before earnings, the stock can gap, and the only risk management is proper position sizing. What's done is done, and hopefully we all can learn from our mistakes. The question is if you want to own this position now? The market doesn't really care that you have a loss on it. The stock can still go higher and the loss will become wider. And believe me, a momentum stock like NFLX, can go MUCH higher. One way to reduce the loss is start selling shorter term put spreads. But this will help only if the stock remains relatively stable. if it continues sharply higher, the loss will still become wider. Sorry if I don't have good news. Sometimes the best thing is just cut the loss and look at it as an expensive lesson.

Thank you David for your kind words! It is important to remember that we are dealing with short term options trading, so prices change all the time. Getting good fills takes a lot of experience and practice - if it was easy, everyone would do it. Trading is a business, and like with any business, prices are involved. However, as you mentioned, many members become very familiar with our strategies and know in advance a good range for most trades we do. This is the best way to use the service. And yes, starting with paper trading and then start small and increase the allocation gradually is the best advice I can give.

Tesla reported earnings this week, and the stock took a hit due to weak guidance. The bears will tell you that this is the beginning of the end. The bulls will see it as a buying opportunity of the century. No matter how you see it, there is no doubt that this is a very risky stock, both for the bulls and for the bears. As a non-directional traders we don't really care. I would like to present a less risky way to trade TSLA, with a good chance to make money no matter what the stock does. Click here to view the article

This video provides an introduction to options trading concepts and options types. The video also demonstrates the difference between options and stocks. Options trading represents a world of investment opportunities to traders and investors. In basic terms, an option is a contract/deal which lets a person to buy or sell an underlying asset before or on the specific date and at a specific price. A trader can trade options by two ways; either by buying a certain asset at a specific price within a specific time period called Call Option or by selling an asset at certain price and within specific time called Put Option. Click here to view the article

Very good points! I believe that generally speaking, options are overpriced before earnings. So selling them should have an edge. However, the devil is in details. For example, I would never sell naked options like tastytrade advocates. I would do with condors, flies or calendars. Second, you need to carefully select the stocks. tastytrade continue selling NFLX and AMZN and get burned cycle after cycle. Those are among the few stocks that you would be better with buying options before earnings.

One general rule is never rely on the P/L charts when it comes to earnings trades.

Because they assume that IV tomorrow remains the same as today. But this is not the case as we all know.

With TSLA now at 255 and only one day left to expiration, I don't think 237 put is going to have much value tomorrow. Definitely not 3.19

The stock was trading in 76-77 range today. With 60/97 strangle, you needed around 20%+ move on the downside and almost 30% on the upside just to break even. How is it not much risk? It might be not much risk in dollar terms, but the risk to lose the whole premium is still very high. Which strikes have you used for TSLA?

Let me ask you two questions: 1. How many times stocks move 30% after earnings? 2. Did you read my daily update today and the daily tip included in it? The short answer is that if you do it with small allocation and are well aware that 90% of the time (at least) you will lose 100% of your money, you can continue dong it. Just don't call it trading, it's more like gambling to me.

For RL straddle, you need +8.50 since it's a debit. For the adjustment, you build it as debit spread (buy 125, sell 130) and then sell it for +2.55. Since you sell it with a positive number, you get a credit. For SPX trade, you don't select class since one is SPX and second SPXW. Just select expirations. Duration is 6 days. Buying for a debit will always be positive number.

Well, this is why I hesitate to do those trades. First, two many moving parts, and many times you will need to get out from few parts at the same time. Second, spreads are usually huge at the first hour, and even if you have a gain, it might be difficult to realize. And by the time the spreads normalize, the stock can move. It will be interesting to see real results of this trade.

Vancouver, your posts are highly appreciated. I couldn't say it better. And btw, what you wrote about sharing ideas is correct regarding my posts as well. They are not trade recommendations, they are trading ideas that I share with members so everyone can make his own decisions. ​Your trade seems to be working fine so far? But getting out might be challenging.

You need margin account, not cash account, and I believe the minimum is 10k

I don't completely dismiss the likelihood of a small move in the stock. I just think it's unlikely, and we are playing probabilities. Again, I'm not saying it cannot work. But it seems a bit too complicated, with a lot of moving parts. Personally I just prefer to close it. Right now it shows ~10% loss, will try to close around breakeven.

Type the symbol, click enter and then combinations, then "option combos Smart"

There are a lot of moving parts here. But I'm not sure I like the risk/reward. Here is the problem: The biggest gain will be realized around 230. But the chance that the stock will remain around 230 is extremely small. So lets ignore this scenario. The best case scenario is probably the stock above 275 or below 190. In this case, the calendar will be almost worthless and one of the verticals will be worth $30 (the second will be worthless). So you invest 2600 (10 calendars at 1.30 and two verticals) and your maximum gain is 15%. But those levels represent 20% move. The stock moved 20% only once (last cycle) rest of the time it moved around 12-15%. The implied move is $27, so 257/203, and this is where the weak spot of this trade is. In case it is around the weak spot, the loss can be around 20-40%. As you can see, the risk/reward is not necessarily favorable, and is also very difficult to calculate.

Earnings confirmed on Sep.16. The 170 spreads are wroth around 1.05 now, up 15% already.

Thanks for sharing. I follow both Cramer and Sebastian and use them mostly as contrarian indicators. Had a subscription to Sebastian's service a while ago and was very glad that followed his trades on paper only. Almost like Schaeffer - you could make a lot of money by taking the other side of their trades. Here is the problem with all those guys: they are on TV NOT to make you money. Their main goal is to entertain so they get high ratings and maximize their ads profits. Unfortunately, entertainment and serious investing don't live together.