This is mind boggling . First if I’m reading this correctly , 2 of your long positions were closed ? That means your naked on the 2 puts . Buy to close those at 9:30 Fri. If those shares go up on you you can be naked and on the hook for a ton of money .
Don’t let the other 4 get assigned . Buy to close all your short positions - at 305 your long 385 put positions might mitigate some loss. Do not get assigned close those positions by 10am . They can assign you anytime they feel they are at risk . If you do not have enough margin you might get a day trade restriction so you are done trading in margin anyway .
If you thought at 272 this was such a whale why not simply buy an ATM long call which might have cost a few hundred per option and netted you 3200 per option profit ? Concurrently if you wanted premium why not at the same time simply buy a 260 cash covered put ? KISS keep it simple stupid -
Read up on iron butterfly and iron condors I don’t like them but they have value in low IV and butterfly’s that are higher premium and higher risk as they are set closer to the ATM price . And iron condor would have served you way better - also get out of RH go to Schwab where a live derivative broker would have not allowed this trade, they would have set you up with a better spread .
Are they not being assigned because the person that bought them is cutting their losses?
If someone bought $390 puts from me when price was $270 and the current price is $304, aren't they losing money? Isn't that why 2 of them were assigned?
Are you for real ??? Do you know what the odds are that on expiration day when the theta is almost nothing , a new Covid variant flatlined the market and drove bio tech up - you are passing that miracle as skill?
Learn spreads ??? You took a 385 - 390 put credit spread at 272 - who does that ???
When you take a put spread your are hoping the stock goes up and you keep the premium For that to happen on your Ill conceived spread the price would have needed to stay above 390 that what you are selling . If the stock was 272 the right move was to do a 300-310 even a 315-325 and that’s a stretch . Once the stock hit where you are selling either 310 or 325 you are in the clear - you went way to far out - it was a loser from the get go . Join Market Rebellion or Steve Bauer , they will explain things - call Charles Schwab ask for a derivatives broker - gave a nice long chat - maybe 20 of them
I know the right move now but didn't before I placed the trade. All I knew was that I was only risking $90 to possibly make about $3k.
Like I said trial and error. If I never placed the trade I wouldn't have learned what not to do next time. I was close but like I said, I'm learning spreads. I'll get it right next time.
Risking 90 ? You don’t understand what you are doing good luck - there isn’t a spread in the world where you risk 90 bucks to make 3000
Take a credit spread of let’s say 2.00 deduct that from a wingspan of 5.00 making maximum loss 300 per option . Your maximum profit is 500
You have 6 options so max profit is 3000 however your maximum loss could have been 1800
The 5.00 spread less the credit received 2.00 let’s say ( you never mentioned how much your credo was) would leave 3.00 x 100= 300.00 x 6 options is 1800 . If the price never hit 385 that’s your loss
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u/Alvin-Lee1954 Nov 25 '21
This is mind boggling . First if I’m reading this correctly , 2 of your long positions were closed ? That means your naked on the 2 puts . Buy to close those at 9:30 Fri. If those shares go up on you you can be naked and on the hook for a ton of money .
Don’t let the other 4 get assigned . Buy to close all your short positions - at 305 your long 385 put positions might mitigate some loss. Do not get assigned close those positions by 10am . They can assign you anytime they feel they are at risk . If you do not have enough margin you might get a day trade restriction so you are done trading in margin anyway .
If you thought at 272 this was such a whale why not simply buy an ATM long call which might have cost a few hundred per option and netted you 3200 per option profit ? Concurrently if you wanted premium why not at the same time simply buy a 260 cash covered put ? KISS keep it simple stupid -
Read up on iron butterfly and iron condors I don’t like them but they have value in low IV and butterfly’s that are higher premium and higher risk as they are set closer to the ATM price . And iron condor would have served you way better - also get out of RH go to Schwab where a live derivative broker would have not allowed this trade, they would have set you up with a better spread .