CBOE Educational Series

Thanks again to @jeffcp66.
The CBOE presentation he recently highlighted was good for me. Below are my quick notes taken during the talk. A lot of it is basic, but basic is my middle name. Tried to copy and paste the PDF of the slides. Did not work.

Notes on CBOE presentation on High Probability Trading

Credit Spreads

Rule of Thumb
Use delta to see probability of success in a trade. If delta is .31 then 31% chance of success.  Less than fifty is high probability of success for selling options.

Don’t sell if there are earnings during the spread timeframe

Exposure of credit spreads
Delta  Direction
Vega   Volatility

Use 2 to 6 weeks duration for credit spreads
Out of money spreads.  Shorter time frame has higher theta decay and better for profits.  Longer the time more uncertainty.

Low VIX makes selling premium more difficult.  Elevated volatility increase probability of success and higher payback.

Hard to find resistance in this market.  Call credit spreads more difficult to find.

Collect at least 10% of the spread width.

Typical max profit target is 70%.  Full Monty implies a poorer risk/reward vis a vis black swans.

$MYL #ShortPuts – Sold MYL…

$MYL #ShortPuts – Sold MYL Jul 21 2017 35.0 Puts @ 0.57. Congress has moved on to other things and the earnings/revenue numbers were good.

SVXY

STO April 7, 80 puts @0.76 cents

MARKET

I find it notable that with as strong as the market is today, and over the past 2 weeks, that $UVXY is really hanging tough. S&P is up 100 points and $UVXY has at least temporarily stopped making new lows. I’m guessing that with the market going straight up, some people might be starting to feel “a little” fear as the $VIX has been creeping higher with the market going higher.

HRL

STO June 35 puts @1.45

$DUST #ShortCalls #ShortPuts – not…

$DUST #ShortCalls #ShortPuts – not really a strangle but the risk is balanced at least
Sold DUST Jun 16 2017 65.0 Calls @ 3.20 – highest available strike
then
Sold DUST MAR 24 2017 23.0 Puts @ 0.50
Sold DUST MAR 31 2017 22.0 Puts @ 0.55
Sold DUST Apr 7 2017 22.5 Puts @ 0.70 – lowest available strike

TLT

#PerpetualRollingStrangles – Another little weekly dividend…

Bought to Close TLT MAR 3 2017 122.5 Calls @ .01 (sold for .30)
Sold TLT MAR 10 2017 120.0 Calls @ .62