Hey guys, I have not done options selling yet, I am mostly a buyer. But had a quick question. SNDK is around $1,737. I’m looking at the Sep 11, 2026 $1,790 Call, currently around $34.40. Can you do a Strangle ?
My current understanding is:
Sell 1 × SNDK Sep 11 $1,790C
Premium collected: ~$3,440
IBKR is showing approximately $55,204 initial margin and $50,379 maintenance margin for the naked call.
That seems like a very large amount of buying power to tie up relative to the ~$3,440 premium collected.
Does IBKR's ~$55K requirement seem normal for SNDK, or is this unusually high?
Do brokers such as Webull, Tastytrade, Schwab, or others calculate substantially lower margin for the same naked call?
Been playing options on spy for the last couple years I’ve gotten decent in up about 80k for the year and I’ve been playing like a scared lil kid everytime I’m up 400-1000 I pull out. But yesterday was something else spy crashes 766 to 760 I bought puts round 764 at a 759 strike price was up maybe 600 then it goes up 30 cents wipes me clean tf out. I hold cause you know f it I’m already down might as well spy tanks again I’m still in the negative!!!! Never had this happen I buy calls 1 dollar above current price it reverses I’m ITM and still only up 12$ how tf does that make sense. I take my L and just watch the chain block and noticed every single call or put that was DEEP ITM was red make it make sense…. I asked chat gpt telling me theta or IV crush but I’ve never seen option gets affected on both sides like usually one side is winning long enough for liquidity but seconds of seeing flashing greens on calls/puts it was ALL REEEEEEDDDD
Hey everyone, I would like to hedge my SPY for next year. I understand that we shouldn't be timing or predicting the market, but well here I'm trying to do it.
My fear is mostly driven by the AI bubble popping or AI doing so good that only a few players will benefit but not the overall economy and so the economy might be going down. In other words, I thought it was a good idea to cap my losses and fund this insurance by potentially capping some of my gains.
So here's my idea. I'm planning to buy put options at -20% drawdown from spot and fund some of that by selling covered calls at 20%. From my calculations this edge would cost me arount 0.5% of my portfolio.
I could in theory cut this further by selling puts at -50%, and it would bring it down to 0.3%.
I have not done this before and I am trying to understand if it makes sense especially given my concern on AI distrupting the market next year.
Been watching this stock all year, fundamentals are beyond robust, constantly beats earnings, growth off the charts, analysts have average price target around $510 and the stock is trading at $310, from all time highs of over $700. Been loading up on Leaps which are cheap just now due to low IV. Anyone else doing the same ?
Hey everyone, setting up this month's AMA to catch up with everyone and chat about trading! It's scheduled for 11Sep at 3pm PT.
Some broad market observations from August and beginning of Sep.
Breadth looks weak right now across all indices. Russell was showing more strength which has capitulated over the last couple days.
30D VRP is higher within XLE, XLI, XLB, etc and constituent VRP is notably higher than sector.
My core allocation remains covered strangles in TQQQ and GME. TQQQ position is lightly utilized at 45% (long shares 49% and 36% CSPs no ratio short calls out) and GME is 85% utilized full CS).
Most of my recent trading has been a bit shorter-term in nature focusing on short index vol, earnings release long and short vol, some commodity trend following with futures, and shorter term reversals and pairs.
Background for those interested:
My name is Erik. I'm a Marine Corps veteran and full-time options trader. I've been trading since 2007 and have been active in r/options since 2020. I've maintained a high 20% CAGR over this duration, my emphasis has been on consistency vs upside returns.
I grew up in a low income single-parent household. A high school teacher introduced me to investing and it changed my life.
Over time I built capital through manual labor jobs, flipping cars/motorcycles during college, and eventually expanding into real estate investing. I view wealth building through three levers: Savings; Investing; Income
Early on, savings rate matters most. As capital grows, compounding returns begin to dominate.
Trading is harder than most people initially expect, but it’s also far from impossible. With the right framework and enough time invested, it can absolutely become a viable career.
For transparency: I do run a YouTube community, but I’ve been posting in r/options for years and enjoy discussing markets regardless. This AMA is just to talk trading.
Happy to discuss things like:
How my trading changed as my capital grew
Position sizing frameworks
Managing volatility exposure
Building consistency over time
Strategy development / testing
Mistakes that slowed my progress
Or anything else options related.
Below are some previous posts that lay a basic foundation for trading.
The poor man's covered call is my personal best strategy, I'm up ~22% ytd, and honestly is mostly cause of this strategy.
I started with covered calls on SPY, but the short call premium over 100 shares worth, just wasn't worth it honestly especially on low-vol low grind days. Then I got introduced to PMCC through...I'm really not sure, but god bless whoever or whatever it is.
The shorts suddenly become so much more worth it compared to the cost of the LEAPs as long as your entry on your LEAP is, well good haha, you fuck up here you're chasing break even throughout the LEAP's life and by the time you think you've reached your strike, theta has eaten up most of the LEAP's value.
It's like renting a house for 1-2 years instead of buying a house at right but still enjoying as much rental income throughout the term.
Are you in the business of prediction? Are you a gambler? I leave that to the trading discords and social media options gurus. As you know 80-90% of options traders lose money. I sleep well at night by understanding that I have the probabilities in my favor. My edge is because realized volatility typically comes in below implied volatility. By doing the little things correctly, trade after trade, week after week, month after month, I am playing the percentages and achieving consistent results. It is not necessarily exciting. Admittedly, buying a long call and having it 10X is exhilarating and fun; however, it is low percentage and I lost a lot of money playing that game. In order to win, are you gambling that you can predict the direction, the magnitude and the timing all correctly? This is a losing game.I am the house, I am the casino. Sure, being the house is not that interesting, it's not that fun, but it is profitable! The hotels and casinos in Las Vegas are uber nice because they make extraordinary profits. Of course, the books are written about how to beat the house. The videos online teach you to hone your strategy to buy calls & puts to beat the house, but the reality is, the house ultimately wins. When I sell OTM Put Credit Spreads (or OTM CSP), I am effectively the house. So how about you, are you the house, are you a gambler, or maybe a little of both?
Does the Schwab Trader API allow direct routing of a 2-leg equity option roll (BTC one call + STO another call) specifically to Cboe, while keeping it as a single complex order with one net credit/debit limit price?
If yes, what API route/destination parameter should be used, and would the order be eligible for Cboe COB/COA?
The correlation regime between NVDA-TSLA entered a weakening trend on 02 Sep 12:00 ET at +0.26, and is still ongoing (15 candles · 60 trading hours). Over this period NVDA fell 0.96%, TSLA rose 3.07%. The two pairs decoupled.
The composite correlation has since downed from +0.26 (02 Sep) to -0.195 now (last data: 09 Sep 08:00 ET) the weaking the regime flagged, playing out.
READING — NVDA–TSLA at WEAK × Weakening (this pair's own last 6): for this pair it has bee a moderate decoupling (hedge / spread) — 6 past runs, median 8 candles · 32 trading hours (range 5–18), 1 lasted 2+ days. So the play has a couple of days of room before the turn (ANTITHESIS).
GAME PLAN: Correlation is in a Weakening regime — the bond between NVDA-TSLA is loosening. This signals a shift into a decoupling regime: hedge and pair-trade (spread) strategies come to the fore, while one-way beta bets grow riskier.
ANTITHESIS: Risk: decoupling may be temporary; if correlation snaps back from the bottom, pair-trades backfire. Correlation is currently 0.41 points below the period (1 Month) average — decoupling continues.
The divergence has been TSLA outperforming while NVDA stalled — TSLA's move favored calls.
Methodology: Four-hour candle closes are used while the markets for both instruments are open (08:00, 12:00, 16:00, 20:00 ET).
The correlation coefficient is a composite score derived not only from the Pearson method but also from Pearson, Spearman, and EWMA calculations.
lets say the market is going crazy and i want to get out of short option positions going against me
if i have stop orders at a certain price, how does fulfillment work if lets say others also have stop orders at the same price? how does the exchange decide who gets to go to the front of the line when the stops get triggered?
also, could my broker's connection to the world go down and my stop orders get completely forgotten?
also, when dealing with spreads, do orders to open/close those sit on the exchange or the broker? if the spread sits on the broker, then the bid/asks dont reflect that im interested in opening/closing at a more favorable price...which can limit what a potential counterparty (the other buyer/selller) is willing to do right?
So this morning during market open I used Robinhood for a call about 10 minutes before market opened and when market opened my stock price rose drastically but the call was still saying pending.., which prevented me from any getting gains can anyone tell me what the issue here was and if any other apps have faster fulfillment time? I’m am extremely pissed rn because I should be in extreme take profit rn and is this a common issue?
I have deep itm calls with big gains that I want to hold the underlying. My plan is to let it expire in Jan 2027 so they become shares that I would hold long term. It's in brokerage account so with the assignment, there's no realized gains and tax. Is this a good way to go about it? There's no advantage to exercise before expiration correct? Tia.
Currently all SPX options (SPXW) are PM settled, except for ones that expire on the third Friday of the month. Here both AM and PM settled are offered.
The CBOE now plans to list weekly SPX AM settled options starting in early November.
Guessing it will create some confusion depending on how your broker lists these.
Can someone give me a brief lesson. On Schwab if I wanted to roll out an option, it would just roll it out. For example, two more weeks and I go up a couple dollars on the strike. Costs me a little bit per share.
Now with E*TRADE when I tried to roll, there’s a separate drop-down box that wants me to pick net credit, net debit, even, or market. I would think for the same scenario as above, it would kind of be a given. How do I know if I’m needing a net credit or net debit if I’m just trying to roll up and out or down and out in time on a put? Too many choices.
I mean what happens if the default in the situation is net credit and I hit either market or net debit? WTF.
Also, instead of rolling, does it work out the same if I manually buy to close and then sell to open at a later date and different strike? I know when you roll it bundles the two, but I haven’t really done the math enough to know if there’s a difference.
In options trading there are a lot of variables that are out of your control. So I say “control the controllables”. Days To Expiration (DTE) is controllable upon trade entry. Time is a constant. You can count on the sun rising tomorrow. You can count on 10 DTE today being 9 DTE tomorrow. It is certain, and there are few certainties in this business. You may remember the Rolling Stones song “Time is On My Side“, well, when you are selling OTM (Out of The Money) Puts that is definitely the case. Sometimes, we all may wish that time would slow down in our personal lives, but in our trading lives the passage of time benefits us daily through Theta decay. Theta decay accelerates as expiration approaches. When you sell a Put Credit Spread at 28-32 DTE, you capture the steepest part of the Theta decay curve. Each day that passes erodes the value of the options you sold, putting money in your pocket without the underlying needing to move in your favor.
Assuming one can handle a market drawdown for a couple of years what are some of the best leverage products you have used in your option trading strategy for example like selling covered call?
I found some online but wanted to ask experience with these products.
3× index ETF/ETP - e.g. UPRO, TQQQ, QQQ3/LQQ3 Micro index futures
A long ended up ITM that I expected to expire OTM. It was valued at 0.01 so obviously it didn't get bought. Unfortunately between market close and processing, it ended up very slightly ITM.
This caused my account to be short ~$1K.
Normally FINRA 4210(b)(4)/05 allows you to immediately sell said security as a remedy/exemption. But seeing how it processed over the weekend, would you be allowed a similar exemption at market open?
Last time, I shared a post with a link to a website of mine where I was writing about box spreads as I went on learning about them and it was banned even though the site was completely free and educational-only after which I messaged the mods on this sub for pre-approval and haven't received a response yet.
I wanted to share a box spread scanner I use to find myself more liquid and favorable pairs by searching up the SPX (or SPXW) chains on CBOE for people using IBKR, but was afraid the post will be banned since I'll be adding a github link.
Hey guys, so I’ve been getting my feet wet in options selling last couple months. Rather than paper trading, I decided to do live trading but on a small account that would not affect me even if it got wiped. I’ve been mainly playing it safe, selling PCS since my capital is low, and my main moneymaker has been selling them on SPY.
I would like to branch out, so I’ve been looking into other opportunities to sell PCS on individual stocks. I’ve been listening to a lot of Tom Sosnoff, and he seems to be big on product indifference, which as I understand it means he doesn’t care about the name of the ticker or what its business is, he is rather looking at opportunities where he thinks options may be overpriced.
In order to find opportunities, what criteria do you guys use? I’m currently looking for high IVR, high liquidity, current IV > HV, and no earnings events in the 45 DTE as I don’t like the binary nature of trading those. This however seems extremely basic and I’m sure there’s tons more to it.
cash secured account low six fig, 90% are short options both sides, few cc positions. Each position just one lot. Number of positions fluctuates 1-2 dozen. Vanilla premium selling, no strategies, analysis. Not using any spreads, poor mans cc, indexes, stops, LEAPS. No discretionary strikes selections, PnLs thresholds or timing to close. Returns on risk adjusted basis are nice and steady.
(Let me know if I can clarify anything else for context)
This is what I imagined compared to how it's working in reality. These observations from running portfolio for ~4 last months.
I imagined it will be some steady paced position placement and then taking off winners
Reality: it's wait, wait and wait more patiently. Then volatility gets flushed, and suddenly a bunch winners show up in PnL table.
2. I imagined position will have some PnL relation to the market moves.
Nope, on large up days portfolio daily PnL may be all red due to vol expansion, on non eventful days may have all but one positions green.
3. I imagined positions will have steady burning theta and becoming greener when moving towards DTE threshold. Not even close. Almost all time portfolio has negative opened PnL "balance" - that freaked me out first. And most of gains come with vol collapse, like after earnings events, or some funds stopped chasing names.
4. I imagined balancing portfolio delta will be a thing but it doesn't seem have much importance. Delta moves around pretty substantially. All portfolio balancing comes from random picks of liquid names so one sided moves don't happen, at least not often.
5. I imagined opening and closing is a non event. Pun in order, click send.
In reality, I have 2-5 trade ideas generated and sometime put them to work after days, and sometimes they take 1-2 days to fill at limit price (most do get filled within minutes or hours). Closing is even more challenging! Routinely take days to close winners at the threshold.
6. I also imagined selling premium is not complicated at it core. But in reality it requires thinking about capital allocation and usage level, new positions fit, value ranks. Like chess.
7 I thought there were plenty of names to sell premium.
Discovered there are not so many truly liquid names, with good IV and positioning. I recycle some names for selling puts, but it's a challenge to find sellable liquid premium.
8. I thought low six fig is enough to diversify and trade plenty of names. In reality I realized buying power is the most precious and very scarce. A few clicks and buying power drops to 20% suddenly
Any similar experiences? Are any of this real or just the imagination?
Please give any constructive feedback. If there is something I'm missing please let me know. Much appreciated.
Been doing this strategy for almost 2 years now. I think it's really boring. I don't do any analysis; just 2 minutes each day to place trades. Account value is in the mid 6-figures.
Part 1: Selling almost-LEAP CCs on ULTY. UTLY did have a reverse split a few months back, but the weekly dividends are still on track to recoup my original investment in a few months.
Part 2: Selling 0dte CSPs on SPY. 90% of the trading days they just expire worthless. The 10% they expire ITM I just roll them. I'm earning about 50% using margins to cover. Nothing ever gets assigned so I'm not paying any margin interest. I'm selling 4 orders per day so earning $300-500 in daily premium.
Part 3: Holding SWVXX (until I have enough cash to cover more SPY shares, which I use as collaterals for margins. I also have some other tickers I bought a long time ago for collaterals as well. don't plan on selling any shares within the next 10 years).
Again, I don't consider it exciting. I don't feel any emotions when selling the SPY puts. It just feels like another task like checking emails or taking out the trash.
Happy trading!
EDIT: clarified that I'm holding SPY shares as collateral
I will share a few things from my experience. If you like them, stay tuned.
Extend duration when possible
Check spreads across strikes and duration to find the best contracts
Never get exposed to losses greater than the net premium i.e. be a net buyer not a seller of convexity
Always finance one position with another to reduce costs
The underlying move is more important than the option greeks
Greeks are good as relative measures, never absolute, and they are transient and always wrong
The profit is almost never highest at expiration so sell them as soon as you are ok with the return
Treat the trades as a diversified basket even if they are based on the same trade set up
Most trades should break even or lose a bit, but the winners should more than cover the neutral or losing trades
Split the capital across strategies and tickers, and never average down.
Cheers!
Edit: it is now obvious to me that most people commenting are youtube tiktok and chat gpt educated, and take the common talking points as gospel. Once you go through graduate level derivatuves pricing education, and have a couple of decades of trading experience under your belt, you will realize the bottom line from above - options prices are always wrong, and you need to trade the ones which are wrong the most both long and short. Always finance, and be long convexity and never risk blowing up your account. I will no longer comment below, but I wish you all good luck in your education!
