PayPal & Zoom calls - I'm starting to buy small calls
(September 2022) in Paypal and Zoom. Both are on a big downtrend
but I think they could bounce at least for a bit on this fib
levels. What your thoughts, do you guys wait for a confirmation of
a trend change before scale in?
Posted by timebandit on 28th of Nov 2021 at 11:31 pm
I'll be honest, I was actually wanting to sell ZM on a retest of
the line it lost last week. I was too busy Friday morning with more
pressing things and missed a pretty good opportunity. Anyway, I'm
probably wrong to go short, and I did consider how the variant news
might impact these stocks. But that's why I would rather trade
charts than news. I'm not smart enough to figure out all the
angles. I don't have enough data. But I can sort of halfway read a
chart. The market will tell us if this variant is a concern or
not.
Posted by jtsurfah on 28th of Nov 2021 at 11:13 pm
I'm a little confused why, if you were going to go so far out in
time anyway, you didn't go with LEAPS for the potential tax
advantages. Maybe you're trading in a retirement account?
Posted by jtsurfah on 28th of Nov 2021 at 10:58 pm
If I scale in before a trigger I usually do it by selling 15 -
20 delta puts...which I've done in both these names...and have
still been getting my butt handed to me. The nice thing about your
approach is defined risk, but the market makers are pretty smart
and price the vol into the reversal scenario....so you may find
that you're not making what you expect on the way up (FWIW,
strangely I'm also short the calls you're long in order to
partially hedge my naked short puts...but I'm short the JAN expiry.
Be careful out there - these names still have very high multiples
and high multiple names have been in the crosshairs lately.
*I'm strongly considering adjusting my trading plan to only
go with spreads on high multiple names from now on. So, instead of
being naked on both sides as I just described, I am leaning more
towards selling iron condors (adding a long wing under and over
each short option...ofen wider on the side I think is less likely
to get hit based mostly but not 100% on technical
analysis).
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PayPal & Zoom calls -
Posted by piclez on 28th of Nov 2021 at 08:29 pm
PayPal & Zoom calls - I'm starting to buy small calls (September 2022) in Paypal and Zoom. Both are on a big downtrend but I think they could bounce at least for a bit on this fib levels. What your thoughts, do you guys wait for a confirmation of a trend change before scale in?
I'll be honest, I was
Posted by timebandit on 28th of Nov 2021 at 11:31 pm
I'll be honest, I was actually wanting to sell ZM on a retest of the line it lost last week. I was too busy Friday morning with more pressing things and missed a pretty good opportunity. Anyway, I'm probably wrong to go short, and I did consider how the variant news might impact these stocks. But that's why I would rather trade charts than news. I'm not smart enough to figure out all the angles. I don't have enough data. But I can sort of halfway read a chart. The market will tell us if this variant is a concern or not.
I'm a little confused why,
Posted by jtsurfah on 28th of Nov 2021 at 11:13 pm
I'm a little confused why, if you were going to go so far out in time anyway, you didn't go with LEAPS for the potential tax advantages. Maybe you're trading in a retirement account?
If I scale in before
Posted by jtsurfah on 28th of Nov 2021 at 10:58 pm
If I scale in before a trigger I usually do it by selling 15 - 20 delta puts...which I've done in both these names...and have still been getting my butt handed to me. The nice thing about your approach is defined risk, but the market makers are pretty smart and price the vol into the reversal scenario....so you may find that you're not making what you expect on the way up (FWIW, strangely I'm also short the calls you're long in order to partially hedge my naked short puts...but I'm short the JAN expiry. Be careful out there - these names still have very high multiples and high multiple names have been in the crosshairs lately.
*I'm strongly considering adjusting my trading plan to only go with spreads on high multiple names from now on. So, instead of being naked on both sides as I just described, I am leaning more towards selling iron condors (adding a long wing under and over each short option...ofen wider on the side I think is less likely to get hit based mostly but not 100% on technical analysis).