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
- Space: The Dawn of a New Age - Citi Global Perspectives & Solutions Report May 2022 - 92 pages PDFby /u/doctor101 (Financial news and views) on May 23, 2022 at 2:38 am
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- I’m deadby /u/SomeMadFoo (wallstreetbets) on May 23, 2022 at 1:48 am
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- Hey, what’s up with this sub man?by /u/ShortChecker (wallstreetbets) on May 23, 2022 at 1:03 am
Man, this sub used to be a place to come by and get some decent DD and potential plays to then bet on. I made a post like a day or two ago, and I have since taken it down, but it was essentially just saying, “the market is very volatile and OTM options is not something to be ignored, as they can yield high returns if you can call good plays.” The amount of people who commented shit like “hey, that is irresponsible to post that, people don’t know about options”, “there’s risk involved, buy blue chips and hold.” Like with all do respect, please shut the fuck up. This is a place where we place bets on plays that we think have a good probability of success based on risk to reward, which is obviously subjective to each individual, and then hope for the best. If you win big and it’s worthy of posting, you post it, if you lost big and it’s worthy of posting, you post it. We celebrate that shit here, and we celebrate retarded and intellectual posts as well. This isn’t r/dividend or r/investments. Don’t come on here with that moral duty mentality. This is fucking WSB, if your new to stocks or really don’t know shit about stocks, you should probably avoid this place. Make WSB great again. We don’t care about your 12.5% yearly return on investments. We look for them 500%+ retarded gains. I’m no “OG”, but I’ve been here since this sub had like 150k-200k subs. It’s so different now man. submitted by /u/ShortChecker [link] [comments]
- Time to get back to work.by /u/BiggieFatMac (wallstreetbets) on May 23, 2022 at 12:51 am
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- Hope this helps…by /u/TheRealPoofers (wallstreetbets) on May 23, 2022 at 12:18 am
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- Exclusive: General Atlantic plans $2 billion investment in India, Southeast Asiaby /u/Motor-Ad-8858 (Financial news and views) on May 23, 2022 at 12:05 am
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- waiting for the bounce on lightning?by /u/Badinternetrapper (wallstreetbets) on May 22, 2022 at 11:57 pm
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- WHO'S READY FOR A 30 YEAR BEAR MARKET 🐻🐻🐻by /u/1tHYDS7450WR (wallstreetbets) on May 22, 2022 at 11:50 pm
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- Big Short 2 in the makingby /u/qwert1225 (wallstreetbets) on May 22, 2022 at 11:44 pm
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- A superstar investor with the Midas touch or just lucky? The puzzle of Cathie Woodby /u/GoMx808-0 (Financial news and views) on May 22, 2022 at 11:09 pm
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- “but the lines mean stuff”by /u/Badinternetrapper (wallstreetbets) on May 22, 2022 at 10:01 pm
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- We are going to the moon this week boys. So says the Inverse Oracle.by /u/lagavulin_16_neat (wallstreetbets) on May 22, 2022 at 9:46 pm
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- Elon at SpaceX launch last weekby /u/ohnoh18 (wallstreetbets) on May 22, 2022 at 9:14 pm
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- What crash? Never bet against Americaby /u/Vast_Bag1329 (wallstreetbets) on May 22, 2022 at 9:06 pm
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- shit memeby /u/SocialistWorldUnion (wallstreetbets) on May 22, 2022 at 8:59 pm
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- What Are Your Moves Tomorrow, May 23, 2022by /u/AutoModerator (wallstreetbets) on May 22, 2022 at 8:00 pm
Read rules, follow Twitter and IG, join Discord, see ban bets! dm mods because why not submitted by /u/AutoModerator [link] [comments]
- This is the scariest chart I have seen on the stock market.by /u/MarioIlic (wallstreetbets) on May 22, 2022 at 7:34 pm
It helps explain what is happening and also what might happen in the rest of 2022?!?! The annual cost of mortgage payments on the average house in the US was about 10,000 a mere 15 months ago (a little over 800$/month). It is now almost 24,000 (roughly 2k/month). That is an insane change in a short amount of time. The series on this chart plots across the last 40 years. This leads the S&P 500 by 9-12 months in most cycles. That's the scary part. Most of the increase in "the cost of mortgaging the average house" occurred in the first four months of this year so this argues the real danger for equities will be in the fall and early 2023 (i.e. 9-12 months later). I am hoping this relationship breaks down but it didn't in 2008, or in 2000, or in 1990 ... I think you get my drift. Happy Sunday. https://preview.redd.it/yogqm9tqx2191.jpg?width=2048&format=pjpg&auto=webp&s=fdcbfa3c3f781dbdb771ada379723e34b5467287 submitted by /u/MarioIlic [link] [comments]
- I’ll just leave this hereby /u/Noir-21 (wallstreetbets) on May 22, 2022 at 7:34 pm
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- Surely these are in my budgetby /u/Tannrr (wallstreetbets) on May 22, 2022 at 5:49 pm
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- POV: You Just Finished Reading All the TA Chart Posts on WSBby /u/IBullyCrippleKids (wallstreetbets) on May 22, 2022 at 5:04 pm
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- Learn to eat your spinach first…..before investing!by /u/Onereasonwhy (wallstreetbets) on May 22, 2022 at 4:24 pm
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- Perspective on market correctionsby /u/Darwynne (Financial Independence / Retire Early) on May 22, 2022 at 3:36 pm
I did this analysis for a post in the daily thread, but I think it's valuable enough to not be buried there. Yes, the S&P has fallen 17% from its all time high. But thinking about that as a portfolio "loss" from an over-inflated high exaggerates the impact: Starting from the peak overstates the losses. At the end of 2021 the S&P had doubled in 5 years. That's a 15% annualized return. The current correction has taken us down to an 11% annualized return from the same starting date (12/1/2016). Picking an arbitrary starting date, 1/1/1995, the S&P was up 20.5% (annualized) by the 2000 peak, and bottomed out at 7.5% in February 2003. It was back up to 10% in 2007. It did fall to 3.5% in March 2009 but was only below 4% for one month. Currently we've fallen from a recent peak of 9.0% to 8.1%. This really isn't a big deal for a long term portfolio, especially if you keep several years of spending money in a lower risk investment. The over-inflated high was exciting, but not ours to keep, so there aren't really losses to recover. submitted by /u/Darwynne [link] [comments]
- I would like to short the whole city of Gary, Indianaby /u/TexasReverb (wallstreetbets) on May 22, 2022 at 3:24 pm
Last week I had the misfortune of visiting Gary, Indiana. To say it is among the crappiest cities I have been to would be an understatement. After seeing Gary in person for the first time, it is clear that being the birthplace of michael jackson is all the city has going for it. I'm very bearish on Gary's future prospects, and I am in need of an investment vehicle that will enable me to profit off of its long term decline. I was thinking shorting its real estate market would be a good idea, but I am open to other suggestions. Thanks. submitted by /u/TexasReverb [link] [comments]
- I can go lower than rock bottomby /u/RickndMzi (wallstreetbets) on May 22, 2022 at 2:48 pm
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- looks like Black Monday tomorrow.by /u/Special_Yam_1174 (wallstreetbets) on May 22, 2022 at 1:49 pm
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- i am Dr Michael Burryby /u/Badinternetrapper (wallstreetbets) on May 22, 2022 at 1:30 pm
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- RIP Appleby /u/deadburgerboy (wallstreetbets) on May 22, 2022 at 1:29 pm
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- Rich stonk genius to beaten up retard ( Based on true events )by /u/ps850 (wallstreetbets) on May 22, 2022 at 1:08 pm
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- One of Jimmy's best callsby /u/hype_cycle (wallstreetbets) on May 22, 2022 at 9:13 am
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- Daily FI discussion thread - Sunday, May 22, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 22, 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]
- Correlate deez nuts you TA hacksby /u/Alternative_Delay899 (wallstreetbets) on May 22, 2022 at 2:49 am
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- Inflating Equity: Inflation’s Impact on Financial Statements and ROEby /u/Hurbahns (Financial news and views) on May 21, 2022 at 5:09 pm
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- Most Anticipated Earnings Releases for the week beginning May 23rd, 2022by /u/bigbear0083 (wallstreetbets) on May 21, 2022 at 11:34 am
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- Daily FI discussion thread - Saturday, May 21, 2022by /u/AutoModerator (Financial Independence / Retire Early) on May 21, 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]
- 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 (edit: by normalized currencies, I mean I normalized the currency NAMES. The amounts are in their original 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]
- S&P 500 enters bear market territory — a 20 percent decline from a recent peak — for the first time since 2020by /u/NineteenSixtySix (Financial news and views) on May 20, 2022 at 6:47 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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- 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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