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Weekly Calls Tips and Techniques

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13 replies, 7 voices Last updated by Marco Krause 5 years, 6 months ago
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    • #2056

      Marco Krause
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      @marco.krause70@web.de
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      Congratulations Hawaii Challenge Goal Accomplished!30 Day Affirmation ChallengeThe Trading Triangle Maui 2016
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      if the RUT makes huge downmoves like beginning of the year 2016 and you don’t agrressive roll the weeklys down
      you have less delta and less profit/loss because the call delta decrease and you habe only a BB on.
      the capital efficient on top.

    • #2055

      Marco Krause
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      @marco.krause70@web.de
      Points: 1 288
      Congratulations Hawaii Challenge Goal Accomplished!30 Day Affirmation ChallengeThe Trading Triangle Maui 2016
      Rank: Sophomore

      @andrew: you’re right. it’s a debit nor a credit, i will learn from that -)

    • #2054

      Robert Dobrin
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      @bobdobrin@yahoo.com
      Points: 821
      APM2 LIVE Attendee30 Day Affirmation ChallengeThe Trading Triangle Maui 2016Ultimate Income Trader Workshop
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      The use of weekly calls allows you to place a bigger trade with a given amount of capital than using monthly calls which will need to be deeper in the money to have the same delta hedge. The downside is that they need to be rolled every week. A 10 cent credit on 5-10 calls amounts to $50 to $100 does not change the outcome of an M3 trade. If I need to roll down to reduce the time value of the calls, which can put a drag on the trade, I change my order to a diagonal and try to pay no more than $0.50 time value. So if I am rolling down 50 points I will pay $50.50 max, if I can’t I will move the strike down until I can. This needs to be done before the time value of the expiring option decays away. I roll up to higher strikes when I need to reduce capital in the trade otherwise I don’t want to be bothered with the calls. Managing the put side of the position keeps me busy enough.

    • #2049

      Michael Durojaye
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      @mdurojaye@gmail.com
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      what do you do when the Time Premium goes negative, roll up to other higher strikes or out to the next week?

    • #2045

      Marco Krause
      Participant
      @marco.krause70@web.de
      Points: 1 288
      Congratulations Hawaii Challenge Goal Accomplished!30 Day Affirmation ChallengeThe Trading Triangle Maui 2016
      Rank: Sophomore

      nice, execution for a credit 0,10$ roll weekly call 29jan to 05feb
      http://screencast.com/t/PgfW8CLycU

      • #2047

        Andrew Stanton
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        @astanton@optonline.net
        Points: 1 012
        APM2The Trading Triangle Maui 2016
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        Call me crazy but that looks like a debit to me. A credit would be entered as -10 when you buy the spread.

    • #1983

      Robert Dobrin
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      @bobdobrin@yahoo.com
      Points: 821
      APM2 LIVE Attendee30 Day Affirmation ChallengeThe Trading Triangle Maui 2016Ultimate Income Trader Workshop
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      You won’t get filled for a credit when your call strike is anywhere near the money, so placing the order in that case will only serve as a reminder. It may happen (getting a credit) when you are deep in the money and the buying/selling pressure on your options lines up to give you a credit. If you get a credit and decide later in the week to roll the strike up to reduce capital there is no downside because they paid you to make the roll.

      As it turns out as I was typing I got filled rolling my 870 calls to next week for a 0.10 credit.

    • #1966

      Anonymous One
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      @anonymous@lockeinyoursuccess.com
      Points: 2
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      Just to add to this topic….I just watched the 1/20/16 community coaching presentation and John spends a lot of time reviewing a M3 trade using weekly calls in the current volatile market environment. It was very informative and helpful if you are using (or thinking about using) weekly calls.

    • #1920

      Robert Dobrin
      Participant
      @bobdobrin@yahoo.com
      Points: 821
      APM2 LIVE Attendee30 Day Affirmation ChallengeThe Trading Triangle Maui 2016Ultimate Income Trader Workshop
      Rank: Freshman

      I enter my weekly roll order for a 10 cent credit, gtc immediately. In an uptrending market you are likely to be filled for a credit sometime during the week(you have no idea when). It is iffy in a flat market (but possible). and almost impossible in a down market. There are two benefits to doing this. Obviously rolling for a credit is good, but secondly by making the order gtc it is always on your screen thus serving as a constant reminder. This stuff is complicated enough I don’t want simple human error to get in the way.

      • #1922

        Anonymous One
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        @anonymous@lockeinyoursuccess.com
        Points: 2
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        Thanks Bob. That is very helpful.

      • #1969

        Gabor Maly
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        @malygabor@gmail.com
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        30 Day Affirmation ChallengeThe Trading Triangle Maui 2016
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        Bob,

        Thanks for that suggestion of placing a roll order immediately after placing the whole trade.
        If you do get filled early in the week for the same strike in new expiration do you ever find that you need to roll again to different strike with less time premium, in other words that it would have been better to wait for the last day and then choose the “correct” strike?

    • #1917

      Anonymous One
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      @anonymous@lockeinyoursuccess.com
      Points: 2
      Rank: Newbie

      Type X2, X3, or X4….in the max proj date field to get weekly and monthly options to show on the same analysis graph. The number after the X depends on how many weekly/monthly options you are viewing in your matrix. Try it and you will see what I mean. You still have to answer yes to the the 2 questions but you can just hit enter. I wish ov had a better way to do this but the X# works pretty quickly.

    • #1916

      Kevin Chan
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      @kchan@outlook.com
      Points: 132
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      What is the X2, X3 tip in OV?

    • #1915

      Anonymous One
      Participant
      @anonymous@lockeinyoursuccess.com
      Points: 2
      Rank: Newbie

      Hello,

      I was trading M3 for about 2 years (2012 and 2013). I had to take a break for personal reasons but am now back to trading the M3. I have seen a few mentions about using weekly calls in the M3 trade in the forum and in David Heinzen’s excellent video. I have made a few notes and done some backtesting in ov to get a feel for it but I am wondering if there are any tips that others can share? Like order entry for rolling, etc.? What day of the week do you roll, etc.?

      (I did pick up the ‘X2’, ‘X3’ tip in ov for the analysis chart which is very helpful).

      Thanks,

      Bryan

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