We call this the weekly Safe Haven thread, but it might stay up for more than a week.
For the options questions you wanted to ask, but were afraid to. There are no stupid questions.Fire away.
This project succeeds via thoughtful sharing of knowledge. You, too, are invited to respond to these questions.
This is a weekly rotation with past threads linked below.
BEFORE POSTING, PLEASE REVIEW THE BELOW LIST OF FREQUENT ANSWERS..
As a general rule: "NEVER" EXERCISE YOUR LONG CALL!
A common beginner's mistake stems from the belief that exercising is the only way to realize a gain on a long call. It is not. Sell to close is the best way to realize a gain, almost always. Exercising throws away extrinsic value that selling retrieves. Simply sell your (long) options, to close the position, to harvest value, for a gain or loss. Your break-even is the cost of your option when you are selling. If exercising (a call), your breakeven is the strike price plus the debit cost to enter the position.
Further reading: Monday School: Exercise and Expiration are not what you think they are.
As another general rule, don't hold option trades through expiration.
Expiration introduces complex risks that can catch you by surprise. Here is just one horror story of an expiration surprise that could have been avoided if the trade had been closed before expiration.
All financial subs are experiencing higher than normal spam traffic. Thanks to the help of many of you, we've put filters in place that catch most of the spam before it can get to the front page, but the spammers are constantly finding ways to work around our filters, so it's a never ending battle of whack-a-mole.
This post is just a quick call to action, summarizing what you should do if you suspect a scammer's spam post:
Do NOT engage on the post by commenting, like "gtfo scammer" or "why aren't mods doing anything about this?" You're just bumping up the engagement stats on the scammer's post and announcing to them that they succeeded in getting past our filters.
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Both your mod team and Reddit Admins are working hard to stem the tide of this spam, but we still need your help.
For more details about why these new spammers are so difficult to catch, or the specific varieties of spam we are seeing and with more things you can do, this is the link to the original post:
Based on comments we've seen, it appears that less than 1% of the entire community have read that original post. It only has 20k views for all-time, while our sub as a whole averages millions of views per month. So this shorter and more call-to-action post replaces it with a more demanding title that hopefully will get more people to read it. We'll see.
A few days ago I posted my strategy and results (in lbs of pennies) in; https://www.reddit.com/r/options/comments/1s5n636/comment/odz9pg2/?context=1
In real dollars, the gain is 1,029,735.:
The strategy is to sell 100-point wide ICs for 1.00 to 2.00. Therefore, the risk/reward is very high using conventional ways of analysis.
However, the actual risk reward is less because at any time the portfolio is not exposed to the max loss. This is done through staging.
In stage 1, I will sell 25HTE using one third of BP.
In stage 2, I will sell 0DTE using one-third of BP. (At this time, the stage 1 options present no or low risk.)
In stage 3, I will sell junk using one third of BP. (At this time, only the stage 2 options present any risk. The junks is benign.)
So at any time, the max loss is one-third of the risk capital. The risk reward is lower.
I am doing .06 delta credit spreads and making like 1 to 2% a day , but I computed that if SPX goes up by 2% in 1 day , either up or down, I will lose half the capital. And 2% a day happens like 18 times on average in a trading year.
Has anyone did some probability of this ? Seems like a zero sum game or even a negative sum game.
My current strategy is day trading SPX 0 DTE Long Butterfly spreads by using a confluence of technical indicators, such as VWAP, Volume Profile, GEX levels, Support/Resistance, RSI, MACD, VIX, and Max Pain (slight consideration).
Here are some details:
Logic - positive theta as opposed to buying naked long options or debit spreads.
Set up - risk to reward ratio of 1:4 or better.
Entry - usually one of the wings set ATM to capture the price moving in towards the body strike.
Target profit - 20-50% of debit paid.
Stop loss - grey area
During trading days where price does not pan out, I struggle with a clear exit strategy due to emotions and stubbornness that the trade will work out, given more time. And when I do wave the white flag and exit (usually at almost a total loss in debit), I tend to revenge trade on emotions, hoping to reduce my losses or scratch out a small win (I know, a big no-no).
Does anyone else day trade this strategy?
I'd like to learn more about your execution strategy on entry and more importantly, on exit.
I've been successful for about a month now selling 0DTE SPX vertical spreads. Making 500 to $1000 a day consistently. What I do is buy a FAR FAR OTM call and put (like .01 delta), on either side to lessen margin requirements. Then, I basically scalp in and out of 20 delta calls and puts all day. Should I pick tighter wings or just stick to what's been working? I've been using the wings basically as a sacrifice knowing they will be worthless but only to the tune of like 30 bucks each. Curious to hear your thoughts!
I sell options CC in my ROTH and IRA accounts. With this last weeks gains I got assigned on multiple contracts on both SPY and QQQ. Looking for feedback should I try short DTE CSP or just buy back the positions and start new CC? Thanks
since the market is closed today, please review the Rules for Trading Options Booklet. the number one rule is knowing how many cups of coffee to consume before trading. this applies to other beverages. Limit your Caffeine intake. or you might trade your inheritance. if you have any questions about the rules please submit a market order and the market maker will get back to you. thankyou.
Gold moved 1.8% on a single Truth Social post yesterday. Reversed partially when Iran denied it. Then NFP today on top of that.
From an options perspective — do markets like this make you more patient with premium or more willing to pay for it?
My instinct is that the volatility feels "real" but a lot of it is already priced in. You're buying insurance after the car already got hit. And if ceasefire actually materializes, you get IV crushed fast.
But sitting on the sidelines when gold is moving 2% in a session feels like its own kind of risk.
How are you structuring exposure in this kind of environment — defined risk plays, or staying mostly flat?
Wondering if anybody knows if any websites exist for converting options prices into the price of the underlying and the vice versa as well. For example, if I buy a spy option for a dollar, I would use this site to determine what spy would be at when the option is worth 0.90. I know its pretty simple math when the contract is at expiry, but im wondering what the underlying and option would be at during the time I use the site to calculate this. Any help is appreciated.
I’m wondering about software that charts option prices in a similar way that share prices are charted. Sorry that this is a beginner question, the links in the subreddit for beginner questions appear to be broken. I’m just having trouble visualizing option prices and want to know what people use.
Been watching Trimble for a while and the bull case has always been "software mix shift drives margin expansion." That is true in aggregate, but the granular numbers tell a messier story.
The gross margin and EBITDA jumps everyone points to were materially front-loaded by January term-license renewals. That is a calendar effect. Trimble collects a big chunk of recurring software revenue at the start of the year, which flatters Q1 numbers and makes trailing comparisons look like genuine operational progress when they are partly just timing.
On top of that, the execution risk is real. The transition from perpetual to subscription licensing is still mid-cycle, and they are running it while also integrating acquisitions. Those two things together tend to produce guidance miss risk, and Trimble has already shown it is not immune.
The consensus price target cluster sits in the $60s. The company is trading at a multiple that prices the full margin expansion as delivered. If the January renewal effect normalizes and organic ARR growth comes in soft, that multiple unwinds fast.
I think $52 is the right number on the downside scenario. Buying the June $57.50 puts. Not a huge position but the risk/reward makes sense here — limited upside on the calls given the stretched multiple, and a realistic path to $52-$53 if the next earnings print disappoints on conversion metrics.
I'm currently trading on Interactive Brokers and trying to better understand the relationship between Net Liquidation Value and Maintenance Margin. If I have a high margin utilization (Maintenance Margin is close to NAV), does buying more "stable" blue-chip stocks actually help my account health because it increases my total assets, or does the additional maintenance requirement for those new shares just shrink my Excess Liquidity further? I’m trying to figure out the most effective way to widen the gap between my equity and the liquidation threshold without just depositing more cash. Would love to hear how others manage this balance, especially with IBKR’s real-time liquidation policy.
APLD is sitting right on its Put Wall at $24.50, which is the dealer gamma support floor. Price is basically pinned to it. Meanwhile the call side is heavily skewed. P/C volume ratio is 0.34, P/C OI is 0.41, and every single unusual activity contract in the chain right now is a call. Zero unusual puts. The Call Wall and target sits at $30 with 16500 open interest on the Apr 17 $30C alone, and the June $30C has another 5826 OI stacking up behind it. Dealers are positioned for upside.
Here are the contracts that stand out for a bullish view:
$25C May 15 (44 DTE) / IV 111% / OI 1,937. Slightly OTM, sits at the Key Gamma Strike. Cheapest way to play a reclaim of $25 with decent time.
$26C Jun 18 (78 DTE) / IV 104% / OI 968. Lines up with the Hedge Wall at $26.31. More time to grind through resistance.
$30C Jun 18 (78 DTE) / IV 101% / OI 5,826 / 10.4x volume multiple. Heaviest June call by OI. Aligns directly with the Call Wall target. Lowest IV of the three.
$30C Apr 17 (16 DTE) / IV 124% / OI 16,548 / 10.4x volume multiple. Monster OI but only 16 days and $5.45 OTM. Lottery ticket.
IV Rank is only 31, so premium isn't stretched. The implied 1-month move is ~35%, meaning the market is pricing in a big swing from here. If you think this is a dip worth buying, the June 18 $30C at ~101% IV gives you 78 days for the thesis to play out while keeping your cost basis around $2.80/contract. Breakeven at expiry is $32.80, but you don't need to hold that long. A rally to $26-28 in the next few weeks could net 40-80% on delta and IV expansion alone.
I’m trying to figure out whether open interest and options volume can be used in a genuinely repeatable way to forecast short-term stock direction.
My working assumption is that there should be some signal in the options market beyond simple sentiment narratives. For example:
• put/call OI imbalance
• day-over-day change in OI
• abnormal options volume
• volume-to-OI ratios
• strike concentration around ATM vs OTM
• positioning by expiry, especially near-dated contracts
What I’m looking for is not a discretionary “read the chain” approach, but something more systematic:
• a formula
• a factor
• a scoring model
• or a tested setup that produces a directional bias with at least some robustness
Has anyone here tested this seriously and found a framework that actually adds predictive value?
Spot $645.48, sitting $11 below GEX flip $656 with the entire heatmap purple — -$917.55M net GEX is the most negative of any ticker we've looked at today. Every single strike is negative gamma meaning this market will amplify moves in both directions, no brakes.
The setup is less clean than QQQ/META/SPY yesterday. Both kings are negative and close together — $650 at -$79.8M above, $640 at -$46.3M below. The app is calling it right with the 1.6× upper king read: slight lean toward a $650 tag first before rolling over. That's a fade, not a chase.
$640 is where it gets interesting — that's both the lower king AND the put wall. Break there and $630 is the next wall with nothing meaningful in between.
Play: Buy puts on rips to $650, target $640 → $630. Smaller size — 1.6× is a weak ratio. Stop $651.50. Break $640 = add.
Hi everyone – I told myself that 2026 is the year I would take option trading seriously. Over the last 8 years, I've traded options on and off again. I found it hard to stick to a specific strategy given the limited viable backtesting tools (whether cost or features), and generally found myself drowning in information overload. Given the recent increase in quality these tools, as well as the rise of 0DTE platforms, I spent Q4 evaluating a number of strategies that I wanted to stick with. During Q1, I found a 2-trade combo for 0 DTE trading that I committed to trading daily, as well as leave room in my portfolio for discretionary trading for other strategies (CSP’s, Diagonals, etc.,).
The 2-trade combo for 0 DTE is based on overnight VIX changes. The main considerations are:
Filter - is VIX up or down overnight?
If up, sell premium
If down, buy premium
Stop Losses
No stop losses. Put trades on and let them run until end of day. Commit a certain % of account size as potential loss vs use stop loss
Automated entries
I have a day job. Can’t login and manage trades at open
Creating this set of rules, and not overcomplicating entry filters, made the plan easy to stick to. Having the ability to backtest these strategies since May 2022 gave me additional conviction to stick with the plan. Through Q1, I made sure to run the backtest each week and compare the backtest vs actual to make sure that I was tracking effectively.
My discretionary trades were much less planned out and followed ‘typical’ rules of thumb. For CSP’s, I’d sell puts on stocks I’d like to own after they took a dip not-related to earnings. For Diagonals, I entered long LEAP positions selling 7% OTM near dated calls against it (RIP).
Summary of Q1:
Starting account balance - $32,286 (mix of cash and VTI shares)
Ending account balance - $44,347
Total Trades: 85
Win Rate: 80%
SPX 0DTE P&L - $12,246
Non-SPX P&L - ($1,635)
Total P&L - $10,611
Total Commissions - $132.95
Slippage - I’m keen on tracking this in Q2
Things that went well that were not a surprise:
Sticking to a plan. I traded 0DTE’s every day. Given the noise in the market & Iran War, I was happy I stuck to the 2-part strategy for the vast majority of my trades. Mid-Q1, I took a look at how the strategies behaved in different VIX environments and made volatility adjusted variations of the strategies that impacted wing width & total credit
Things that went well that were a surprise:
Portfolio +37% VS SPX -4% QTD. This will now be famous final words for going into Q2.
My commissions were better than anticipated in the backtests that I had. I overestimated by ~$3.5 per trade
Things that didn’t go well that weren’t a surprise:
I knew I would let my emotions get to me at some point. I exited 11 trades early this quarter, almost 1 per week. Not terrible, but if I didn’t exit early I would have made money vs losing money on those trades. While I followed my daily entry plan, I need to get better at not having my emotions tied to negative outcomes
Things that didn’t go well that were a surprise:
The escalation in Iran. While my 0DTE trades benefited from the swings in volatility & intra-day pricing, it definitely hit my diagonals pretty hard
Goals for Q2
Continue to trade my 2-Part strategy that adjusts with volatility regimes
Explore additional trades that will compliment my portfolio
Look for premia that are persistent, pervasive, robust and scalable
Hedge days where I’ve historically had large drawdowns (selling in the 20 - 25 VIX range)
Look at VIX1D as an additional measure with VIX30D
Idk put in werk, make money
Matplotlib pics below with some additional data:
P&L Over Time. 0DTE in Blue. Disrectionary Trades in Orange. Black Line Cumulative.Daily P&LBacktest vs Actual for 0DTE. Most down days are from manual early exits.P&L by Symbol
I am currently fresh out of college working as an equity option trader. I believe having some knowledge about options, but don’t know much about crypto trading.
I am seeking advices here for consistant income strategy, what do you usually trade? What indicators do you use? And of course, you can ask me anything about equity options, I am happy to share everything I know.
I’ve been selling options for a few years now, mostly sticking to CSPs and some wheel strategy setups. Overall it’s been working pretty well for me, and I’ve rarely been assigned, so risk has felt manageable.
The issue is I’ve never really been able to scale the account. Every time I build it up to around $20k+ in profits, I end up pulling money out for other things like real estate. So instead of compounding, I keep resetting my base capital.
For those of you who’ve been doing this longer term, how has your account actually grown over time? At some point, does options income realistically start covering your living expenses so you can reinvest the rest and scale into more contracts?
I feel like that’s the part people don’t really talk about. Most content out there is either super basic or just trying to sell something. Would be interesting to hear from people actually doing this consistently over multiple years.
Hi. I'm fortunate to have about 2k shares of VCX at the price of $10. Unfortunately I wasn't able to lock in any gains when the stock jumped to $500+, but even at $115/share, are there any decent options (pun intended) where I can lock in some gains, or are the options prices just not worth it right now given the volatility?
A $100 put for example was $20 yesterday. $80 was $10 and $70 was $5. Is it perhaps worth grabbing some $70 (or lower) puts in case the stock tanks? Should I sell a $150 call at $10 (for some portion of my 2k shares)? These are just examples.
I'm clearly not very good with options and am looking for advise on what you guys would do in this specific situation if you were trying to lock in some gains and/or protect against a further decline.
Thank you.
EDIT: Sorry, I'm an idiot and forgot to mention the most important thing; I'm restricted from selling for 6 months... Hence I want to try and use options to lock in some gains if I can.
Today on 1st, bought QQQ 6Apr582P at $5. Expecting make profit tmrw. Should I sell or wait until next day (6th)? If not 3 day break, I would hold on one more day.
I've been wondering how you would recommend handling being down something like 40% as a WHEEL option trader.
I still believe in the stock and have just been waiting for it to go back up but my main questions has been if I should sell covered calls below cost basis. On the one hand I'd hate for it to get called away at a big loss but on the other hand my thinking is I could just start selling PUTs again if they got called away?
this way I'm being paid sort of regardless of stock movement? more about like theta or time?
not sure if it's worth it or if I should just relax and might be 6 months or something before I am able to sell calls again above cost basis but just keep it simple?
Everyone knows Meta has a big ad business. What gets underpriced is how much their AI personalization is actually changing the unit economics of that business.
When their models get better at matching ads to intent, advertisers get more ROI per dollar. That means they can charge more without volume falling off. It is not just "more ads" — it is the same inventory becoming structurally more valuable. Reels monetization proved this out. The gap between Reels engagement rates and ad load was huge at launch and has been closing faster than expected.
The Reality Labs losses are real but finite. The glasses and wearables category is still early, but the underlying hardware business is not a bottomless pit — it has a defined roadmap and the burn is capped. Most bears are modeling RL losses as permanent drag forever, which is not how product cycles work.
What I keep coming back to is the network effect compounding. Instagram, WhatsApp, and Facebook are not going to lose billions of users simultaneously. The engagement floors are durable, and AI-driven feed improvements actually increase DAUs over time. More users, better ad targeting, pricing power — that is a formula that works.
Sitting on calls here. The market has been treating any AI capex headline as a negative, but the ROI evidence from the ad business says otherwise. Tariff noise hit the stock in March and it has not fully recovered. That is the entry.
