This blog is about the 10 Commandments of Options Trading Strategies.
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options’ variables. Call options, simply known as calls, give the buyer a right to buy a particular stock at that option’s strike price. Conversely, put options, simply known as puts, give the buyer the right to sell a particular stock at the option’s strike price. This is often done to gain exposure to a specific type of opportunity or risk while eliminating other risks as part of a trading strategy. A very straightforward strategy might simply be the buying or selling of a single option; however, option strategies often refer to a combination of simultaneous buying and or selling of options.
Options strategies allow traders to profit from movements in the underlying assets based on market sentiment (i.e., bullish, bearish or neutral). In the case of neutral strategies, they can be further classified into those that are bullish on volatility, measured by the lowercase Greek letter sigma (σ), and those that are bearish on volatility. Traders can also profit off time decay, measured by the uppercase Greek letter theta (Θ), when the stock market has low volatility. The option positions used can be long and/or short positions in calls and puts.
Below are the 10 Commandments of Options Trading:
- Thou shall always take 100% daily gains or 200% all time gains.
- Do not fall into temptation and buy during the first 30 minutes of market open. (Selling positions is still permitted)
- Thou shall not buy calls on green days.
- Thou shall not buy puts on red days.
- Avoid greed and do not buy consecutive options on 1 company.
- Give thyself at least 3 weeks time to play the option.
- End your suffering and sell if down 50% all time on an option play.
- Avoid gluttony and do not day trade options. (Swing trades allowed)
- Be fruitful, multiply earnings and sell covered calls if holding any.
- Celebrate and binge drink after big gains (or losses)
- Off topic, but relevant – You absolutely need to be doing a 401k or IRA as well as investing in crypto: 401ks and IRAs offer fantastic tax advantages that straight investing does not. Also if you have an employer who matches you are leaving money on the table by not taking advantage of that. It’s foolish. Crypto is great and should definitely be in your portfolio but it should not be your whole portfolio.
Sources:
1- WallStreetBets
2- Wikipedia
Finance and Binance Breaking News – Top Stories
- I'm just starting out and have failed. what would you do?by /u/ParkingBreakfast (Financial Independence / Retire Early) on May 21, 2022 at 2:04 am
I'm new to this world and wow I feel like the jerk. I recently opened a Roth IRA and put in $1000. I took some advice to break down the 1k and place it into a few different areas such as domestic stock, foreign stock, bonds, etc. I decided to buy a few stocks, UPS and MOO, and bam I have just been losing every day. I have tried looking into bonds, but the only thing I feel like I can invest in are bond ETFs. All my positions are suffering loss but one. I don't know what to do. What would be the wisest option with my money? CDs, maybe? Are there any CDsthat would take less than $1000? If Bonds, what might you suggest? Would index funds be the better route? Again, I am new and I guess making mistakes is good because I learn. But any help or guidance is greatly appreciated 🙏 submitted by /u/ParkingBreakfast [link] [comments]
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- Weekend Discussion Thread for the Weekend of May 21, 2022by /u/AutoModerator (wallstreetbets) on May 20, 2022 at 8:00 pm
Read rules, follow Twitter and IG, join Discord, see ban bets! submitted by /u/AutoModerator [link] [comments]
- The Official 2021 FI Survey Results Are Hereby /u/Melonbalon (Financial Independence / Retire Early) on May 20, 2022 at 6:59 pm
You can all stop asking because… The data for the 2021 survey is now available. Woot woot. There are multiple tabs on the sheet: · Responses Cleaned: The survey results after I removed incomplete responses and normalized currencies. Note that I only removed responses as incomplete when they were nearly all blank. · Clean Up Log: My notes on the clean-up work I did. · Responses – All RAW: The raw data as delivered by the survey software. Currencies are not normalized and includes incomplete responses. · Summary Report – All: Summary that the survey software automatically kicks out (this is what folks were seeing after taking the survey). · Statistics – All: Statistics that the survey software automatically kicks out (this is what folks were seeing after taking the survey). If you want some history, here are the prior results. I’m also linking the old Reddit posts when I released the data (at least the ones I can find – if anyone can find 2018 I’ll add it) , so you can see the old visualizations linked in those if you’re so inclined. 2020 Survey Results / 2020 Response Post 2018 Survey Results / 2017 Survey Results / 2017 Response Post 2016 Survey Results / 2016 Response Post Note: The 2016 - 2018 results are partial - all respondents were able to opt in or out of being in the spreadsheet, so only those who opted in are included. 2016 also suffered from lack of clarity in the time period responses should cover, which was corrected in later versions. And if you really want to see a blast from the past… Here’s the very first survey post. And here’s how I wound up in charge. And here’s what we originally all wanted to get out of this thing. Reporters/Writers: Email [redditfisurvey@gmail.com](mailto:redditfisurvey@gmail.com) or send this account a private message (not a chat) with any inquiries. submitted by /u/Melonbalon [link] [comments]
- You best start believing in bear marketsby /u/RunsWthScizors (wallstreetbets) on May 20, 2022 at 6:52 pm
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- Apple is down 15% since my post where I warned about Berkshire keeping 47.6% of their $300 billion public portfolio in Appleby /u/SilbergleitJunior (wallstreetbets) on May 20, 2022 at 5:59 pm
Hey goofs, 21 days ago I told you that Buffett stuffed 47.6% of Berkshire's $300 billion public portfolio in one single stock - Apple. Here is the original thread: https://www.reddit.com/r/wallstreetbets/comments/uewroo/476_of_berkshires_300_billion_portfolio_is_in_one/ https://preview.redd.it/1bsu09rs6o091.jpg?width=706&format=pjpg&auto=webp&s=f7ec9367c7850cc56359ae945043eea0c321d886 You down-voted me into an oblivion because I said something against a god Buffett. I told you I was going short on Apple, yet you made fun of me and mocked me for daring to think that I'm better than the oracle of Omaha! Where are your 90+ year old gods Buffett and Munger now? https://preview.redd.it/z5wz75cv6o091.png?width=1340&format=png&auto=webp&s=b47286e06fe59c90e239dd95ffe8c47cce07cf4b After small and mid cap destruction that started in November 2021, I can't hide my happiness that market is coming to destroy the big boys like Ackman (NFLX), Musk (TSLA), Zuckerberg (FB), Bezos (AMZN) and Buffett (AAPL) that you all jerk off to. They are not smarter than us. Fuck you and fuck anyone who thought Apple was reasonably valued at $3,000,000,000,000. Down vote me again bitches, but that won't save your AAPL castle from burning - muahahaha! submitted by /u/SilbergleitJunior [link] [comments]
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China is going to do for 2022 what America did in 2020, print money and save the stock market, I mean economy. The world is about to be flooded with cheap Yuan. This comes after a massive deleverage cycle that has been occurring for the last two years and appears to have bottomed. submitted by /u/InvestingBlog [link] [comments]
- the federal government when it sees me trying to hold on to some of my incomeby /u/Spiritual_Exchange47 (wallstreetbets) on May 20, 2022 at 12:08 pm
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- Daily FI discussion thread - Friday, May 20, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 20, 2022 at 9:02 am
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Weekly FI Frugal Friday thread - May 20, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 20, 2022 at 9:00 am
Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Stephen Roach calls stagflation his base case, warns market is unprepared for the consequencesby /u/TorukMaktoM (Financial news and views) on May 20, 2022 at 12:41 am
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- In a pickleby /u/eyerollingsex (wallstreetbets) on May 19, 2022 at 10:11 pm
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- FTX Set to Open Stock Trading Beta- No Fees or Payment for Orderflowby /u/BookieOnFoodStamps (Financial news and views) on May 19, 2022 at 11:16 am
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- Daily FI discussion thread - Thursday, May 19, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 19, 2022 at 9:02 am
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Plotkin’s Melvin Capital to wind down fundsby /u/bobbybottombracket (Financial news and views) on May 18, 2022 at 10:37 pm
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- Twitter board says it will 'enforce the merger agreement' despite Elon Musk's latest moveby /u/amnesiac7 (Financial news and views) on May 18, 2022 at 2:56 pm
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- Did COVID ruin the FIRE lifestyleby /u/moviemail (Financial Independence / Retire Early) on May 18, 2022 at 9:54 am
hey all, FIREr here. I retired in 2017. Since then, I've been (a) indulging, (b) researching my investments, (c) trying to exercise, (d) working on a hobby blog and (e) trying to do some complex intellectual challenges now and then for stimulation, like right now I'm learning about the various ways to estimate variance for erratic non-normal distributions. The first two years of exploring the FIRE were good (indulgence in whatever I wanted, learning more about investing/stocks, just that new experience of getting up every morning and being able to do whatever I wanted . . . the first two years it was all a new and exciting way to live.) But I stopped the indulging. That had deleterious consequences that caused me to both independently, and by reading Anna Lembke/Andrew Huberman's work, become an expert on the innate systems in our bodies that reward us with pleasure chemicals for some acts, and release pain/discomfort chemicals for other acts. We don't have as much free will as we think. (By "indulging" I do not mean doing drugs or drinking. I've never done that. Again, we have an internal system that releases pleasure chemicals if you do certain things. No need to use external pleasure chemicals.) So I'm not doing that anymore. Currently, the thing that probably gives me the most pleasure is watching stuff from the 80s, when I was a kid/teenager, and getting mentally transported back to that time. (I don't know why, but I am also an empiricist/scientist at heart so I have to acknowledge something that works even if I don't know why it works.) Overall the FIRE life isn't that great right now. Don't get me wrong, I have no desire to go back to work. Clients/bosses/deadlines hovering over you and making you do things you don't really want to do . . . that's not a solution. But as I review my circumstances, I wonder what life would have been like without covid, freely going to places such as a nice gym, traveling, stuff like that. Do you think COVID ruined the FIRE lifestyle? [Edit: Alright all. I'm going to head off. Although this was meant to be a FIRE in covid thread, it looks like my thread may have shattered the illusions some of you have -- i.e., that unlimited money and free time leads to guaranteed happiness. It doesn't. If you overindulge, it will lead to problems. You have to moderate yourself (a lesson that also applies to you reddit addicts who come here to feel that mild anger/combativeness that releases dopamine.) Also, I understand that I may be overly cautious. I'll ponder that. Thanks for the advice.] submitted by /u/moviemail [link] [comments]
- Daily FI discussion thread - Wednesday, May 18, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 18, 2022 at 9:02 am
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Weekly Self-Promotion Thread - May 18, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 18, 2022 at 9:00 am
Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. submitted by /u/AutoModerator [link] [comments]
- Allianz pleads guilty to multibillion dollar fraud, fined $5b, can no longer advise funds in the USby /u/rastafunion (Financial news and views) on May 17, 2022 at 4:26 pm
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- Daily FI discussion thread - Tuesday, May 17, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 17, 2022 at 9:02 am
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Moronic Monday - May 17, 2022 - Your Weekly Questions Threadby /u/AutoModerator (Financial news and views) on May 17, 2022 at 2:00 am
This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]
- China's tech industry faces woes from covid, regulatory crackdown and the trade warby /u/Pessimist2020 (Financial news and views) on May 16, 2022 at 7:49 pm
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u/therapistfi submitted by /u/Midcityorbust [link] [comments]
- "Social Security will be there when you retire" -- but only 78% there after 2034...by /u/davidzet (Financial Independence / Retire Early) on May 16, 2022 at 10:10 am
Just read this on the fact sheet for workers 49-60: "The Social Security taxes you pay go into the Social Security Trust Funds that are used to pay benefits to current beneficiaries. The Social Security Board of Trustees estimates that, based on current law, the Trust Funds will be able to pay benefits in full and on time until 2034. In 2034, Social Security would still be able to pay about $780 for every $1,000 in benefits scheduled. Learn more at "https://www.ssa.gov/people/materials/pdfs/EN-05-10229.pdf " Edit: The link was going wrong due to a . at the end of the sentence. submitted by /u/davidzet [link] [comments]
- Daily FI discussion thread - Monday, May 16, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 16, 2022 at 9:02 am
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]
- Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - May 16, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 16, 2022 at 9:01 am
Need help applying broader FIRE principles to your own situation? We’re here for you! Post your detailed personal “case study” and ask as many questions as you like, or help others who’ve done the same. Not sure if your questions pertain? Post them anyway…you might be surprised. It’ll be helpful to use our suggested format. Simply copy/paste/fill in/etc. But since everybody’s situation is different, feel free to tailor your layout to your needs. -Introduce yourself -Age / Industry / Location -General goals -Target FIRE Age / Amount / Withdrawal Rate / Location -Educational background and plans -Career situation and plans -Current and future income breakdown, including one-time events -Budget breakdown -Asset breakdown, including home, cars, etc. -Debt breakdown -Health concerns -Family: current situation / future plans / special needs / elderly parents -Other info -Questions? submitted by /u/AutoModerator [link] [comments]