we can assume that this is a 25K account that holds only spy positions. i don't have stops here i prefer to adjust the position in increments as the market moves around. i do watch the market constantly during RTH. yes, a nasty breakout could do some serious damage but we are getting really close to expr.
it seems that i could sell 12x calls instead of 300-400 SPY. the advantage is that i benefit from option decay. the disadvantages are: none?
no more trades today. EOD update: not sure if i will start building a new position with July options before June ones expire.
Trade the underlying around a 1:1 position if you want to earn from decay. Say, 2:1 strangle/spot. Selling a 12x strangle and trading 600-shares of SPY. Obviously, it's another matter of you're short-gamma scalping. Short options make for sh*t hedges. You're doing well with this position, congrats.
i locked in some gains by adding -4x puts as per earlier post. i will try to nurse the position into the expration.
Hey shortie, and atticus. If you guys don't mind, take a look at asianprop's reply to my post in an ETF thread. He seems to make sense, and I agreed with him. I was watching shorties trade on the SPY thinking it made better sense to me until I read that reply. HELP! Lol! I'm a little lost now. Argh! Let me know what you think. Thanks! Wish I knew options like you guys do. http://www.elitetrader.com/vb/showthread.php?s=&postid=2466753#post2466753
atticus knows about options but i have only rudimentary understanding. from the post you mention i understand that what asiapro meant was that you can't "fix" an ETF by using options. if an ETF does not track oil well than the options on that ETF can't fix this type of a "problem". an option is just a derivative. you need a different ETF or a stock that tracks what you want (oil, sugar, etc) better.