Ramie 11:30 am on Thursday, February 1, 2018
Tags: FallingKnife ( 963 ), Fuzzies ( 40 ), pietrade ( 143 )

UPS #FallingKnife Sold $UPS Jul…

UPS #FallingKnife
Sold $UPS Jul 20 100 puts @ 1.10. May add more if we get some additional move down.

#fuzzies, #pietrade

hcgdavis 12:59 pm on Thursday, February 1, 2018

UPS can be a #pietrade but if breaking down would hold off on the close to the money options.
- Ramie 1:26 pm on Thursday, February 1, 2018
  
  Using Iceman’s #FallingKnife principles, the chosen strike is below all of the price action in 2017 (and you can’t actually see the stock below 100 unless you go back almost 2 years to March 2016). The expiration date is less than 6 months off. Will look to sell more if the premium increases (or I’ll go down in strike if possible). I’m a little hesitant about selling short term puts in general right now. This entire week has not only been down but every intraday rally has been sold into (a change of character from the way it’s been recently). The daily chart on SPX also looks pretty toppy.
  - Option Iceman 1:53 pm on Thursday, February 1, 2018
    
    I agree with Ramie about shorter term Puts.
    Very dangerous in this environment
    - Mike 2:36 pm on Thursday, February 1, 2018
      
      Iceman, it is so interesting. Some traders say stay in weeklies for faster decay. Others say go out 6 months and choose a low strike. I am sure that each has a reason. I guess, it depend on the personal style and desired return. Or just protection of capital. I would prefer to go out 6 months and not worry too much about a trade, but returns are so low due to the time frame.
      Just trying to learn…
      
      Would you have a link to your original #FallingKnife principles?
      - hcgdavis 6:27 pm on Thursday, February 1, 2018
        
        The tastytrade team has done tons of research on decay rates of options. For OTM options 45 days is the sweet spot. The original research was “I am not greedy, just want it faster” but cannot find the recording. For ATM obviously the last week is the fastest. I was doing that with ladders but ended up getting assigned on everything at the same time.
        
        I agree the market character is changing and we need to be able to change with it. I am trading small size, selected stocks that I won’t mind owning if assigned and my technical indicators are at least showing support.
        
        I think the days of just selling any put now will not work out. I will do more 45 DTE strangles, jade lizards, covered straddles, ITM covered calls, and #fuzzies where I see opportunity.
        
        I wish I had the account size to trade like @optioniceman but alas I do not.
        
        Stay nimble, stay small, trade often and trade smart!
    - hcgdavis 6:30 pm on Thursday, February 1, 2018
      
      I agree, the gamma risk/explosion expiration week has eaten my lunch more than once. Lesson learned!!!

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