jumping on the journal bubble since everyone’s making threads nowadays. plus I need a place to lay out my thoughts since I’m always scattered, with an influx of information I need to extrapolate to innerstand for my trading methodologies. will be mostly trading flies (all variants) mostly pin plays of spot at time. As I advance in my studies and trading I’ll include a vol component to my bias. also will be trading microcaps commons in companies with <$15/share. Happy New Year!
Subscribed. I took my first fly on Wednesday. Riot, 12-19-25, end of January for 1$ debit. Happy new year!
couple of questions. Whats your basis for entering this? Personally, I trade flies on underlyings that are $50> Although $RIOT options are liquid, was it difficult filling your order? You didnt specify but I'm assuming you chose the monthly 15 JAN 21 contract? Notice the implied vol of 204% which is about a $6 implied move, which coincides with your wing selection. Wondering why you chose to skew to the downside? Your lower wing is $7 while your upper is $6, why not just do a symmetrical? One more thing, you have some balls to fly off this stock, as its extremely volatile and is making new water marks each week. I would never short the body of a fly at a strike that the underlying has never traded at before. But thats just me. If you did choose 15 JAN 21 its showing your fly quoted at 2.45, which is well over 100% return on your dollar debit. Good trade!
With a little over a decade's worth of accumulated trading and research I'm approaching 2021 with simple task: 1. Keep analysis simple. 2. Analysis must provide signal IN advance. My bias for entering a trade is heuristic and personal. I use a few metrics, a few visuals, a few this, a few that. Most importantly, I don't think too much about it. A lot of bright minded traders publish the most advanced fancy analysis for entering a spread, but bro, you might be better off flipping that quarter in your pocket. Everything in our reality comes in three. The market is no different. Time + Price + Vol = Market Each trade I will try and explain my time bias. How long I'm in a microcap is determined off profit targets, not time. Thankfully common shares have zero-theta so decay won't hinder my positions. As far as the fly spreads, I will mostly trade <7DTE. Occasionally throw in a monthly fly, but my time forecasts for spot are more "spot on" (no pun) in the shorter term (1-3week cycle). Each trade I will try and explain my price bias. Each trade will have a predetermined profit/loss target. Whichever is hit first. I may re-enter if conditions still look opportunistic. Each trade I will try and explain my vol bias. I'm still tinkering with how to incorporate vol into my methodology. Of course anyone who trades options is naturally trading vol, but theres many ways to interpret this elusive concept. Also, a lot of the time I'll refer to vol as "fluctuation" or "magnitude". Vol means a dozen or more things so i'll be sure to elaborate.
Below is a project I've been working on. Used 3D paint to attach real butterflies to a butterfly spread risk profile. This took time and precision.
I knew the stock as I own it from 10$ and have a collar on it. Long put 11, sell call 20 + stock. The broken wing and the slightly otm (uncharted since 2017) pin it's because I am bullish biased, it's a bitcoin mining company and if BTC stays over 20k, they are printing profit. If it flies up, I won't mind much and the fly loss is well recovered by my collar. So the drop is what I worried about. The date is 29th Jan. Ideally I would prefer cash settlement for strategies itm but I couldn't decide what to do on indices at the moment. So I played a bit with TOS spread hacker, looking for high premiums and decent probability and found riot, gem, spwr. Chose riot as it's already in play and looked good on payoff. I followed the stock price action since BTC rally. I will start to look into the volatility skew more than option scanners to be more accurate with dates, but I am just starting and exploring ways. I don't intend to take this fly to expiration. It is also a small trade so it should be ok.
Wrote a rap about optionality One who doesn’t hedge, no one can save him It’s like runnin off a ledge, no love for layman the markets like an ocean and I’m looking for trade-winds Perfecting my strategy, hoping my trade wins We don’t trade the same markets We don’t play the same targets ... cause there’s levels to this shit we don’t trade the same options We don’t make the same profits ... cause there’s leverage to this risk but you don’t get it, you fret it then beget it I’m measuring the leverage for my pleasure to protect it I hedge it so the treasure is so close that I could smell it I sell it then I tell it to my fellowship who dwell it understand the math of it all Statistics for positions when I cash in my calls Percentage on returns and I’m laughing it off So I can live good, relax and just ballllllllllllll