Options Playbook Radio

In this episode, we revisit an old favorite: the skip-strike butterfly. You can find more on page 108 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. Specifically: Broadcomm announces earnings soon, and has been very volatile lately Why a skip-strike butterfly? What is the outlook? Selecting strikes What is the cost? What about the maximum gain? Loss? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

In this episode, Brian explores covered calls to get out of positions before the end of the year.You can find more on page 134 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. Specifically: If you need to thin out your portfolio before the end of the year, consider covered calls Looking at AAPL Selecting an expiration Selecting strikes What is the cost? What do we want to happen? An alternative strategy What is the moral to the story? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

For your listening pleasure, we bring you an all-listener question episode of Options Playbook Radio.

The holiday season brings to mind covered calls. In this episode, Brian covers: Last week's trade in DIS What did we want to happen? What DID happen? Avoidint the stupid award The holidays are coming, that means shortened trading weeks It might be a good time to trade covered calls Getting "free" time decay with holidays Where is AAPL? Selecting strikes And more...

Since it is still earnings season, it makes sense to capture the movement surrounding earnings announcements. In this case, we are looking at a bullish ratio spread in DIS. In this episode: A recap of what happened with last week's FB position After AMZN, FB looked a little boring DIS reports earnings after the close on Thursday, November 9 What is the sentiment on DIS? Looking at the long straddle to figure out pricing Setting up a backspread in DIS Picking the strikes and expirations What is the downside? Upside? What do we want to happen?

Today we are going to look at a ratio spread with puts on FB. In this episode: A review of last week's skip-strike butterfly in AMZN. What was the strategy? Expectation? Where is AMZN now? What about GOOGL? How do you want the market to move when you have a butterfly position? FB earnings are coming up. Let's look at a ratio spread. What is the outlook? Setting up the trade. Selecting strikes. What is the cost? What do we want to happen? What is the cost? Remember volatility.

This is probably the biggest week of earnings reporting, when the most valuable stocks report. There are things to take into account because of earnings: Remember that implied volatilities rise around earnings Why a skip strike butterfly? Setting up the trade to pay for itself Where is AMZN trading right now? What is the long straddle aka the expected move Using the long straddle to select strikes Earnings-related risks What is the expected move? Setting up the trade What is the upside? Downside? Nuances of options pricing Remember time premium

Mark and Brian are back to answer listener questions. Question from Ejh4isu - Let's say you're short naked a bunch of puts and the trade goes against you, and you don't have the money to pony up? What can your broker do? Question from LCB - This is a challenging time to sell options due to low volatility. So does it stand that the opposite is true? Is it a good time to buy options? Particularly protective puts? Question from Andrew Lane - I tried searching for options on the major advisor news sources including Pensions & Investments and Financial Advisors magazine and came up blank. Why do these mainstream outlets ignore this space? Where should I go to learn more about options for advisors?

It's time to tackle listener questions again on Options Playbook Radio. In this episode, Mark and Brian cover: Question from Albert Deckel - First, I want to thank you for all the effort you place into the options playbook. I find your lessons absolutely clear, understandable and instructive....a rare combination!! I bought your book and find that, also, clear and concise and very informative. Two questions: While I understand how to convert a "Delta" into meaning, I really don't understand what consists of a "high" vs. "low" Gamma, Theta or Vega. For example, when is theta so high that it makes the purchase of an contract dubious, or Vega so high that it makes the purchase of an OTM contract desirable? Also, if I were to write an ITM put, what combination of Delta, Gamma, Theta or Vega am I looking for? Thanks so much!! Al Question from Tim - Why isn't it standard or maybe required to let people close out shorts for free below $.10?

We are continuing the discussion of options pricing. This week we take a deep dive into pricing of a butterfly. Specifically: Looking at a 10-day butterfly in AAPL Picking a five-point spread What strikes and expirations to choose? What will this cost? What is the maximum risk and reward? What do we want to happen? What impacts the pricing of butterflies? Managing expectations Looking at the same thing for a November 17 expiration What is the ideal scenario?

Today Brian is covering a short call spread (which is bearish) on AAPL. All of this applies on the put side, but in this episode, calls are being featured. Specifically: What dynamics do you need to think about when trading short spreads? Look at the most at-the-money straddle to get an idea about pricing Example 1: November 17 expriation; 52 days out Selecting strikes What will this cost? What is the max risk? Reward? Example 2: October 6 expiration; 10 days out Selecting strikes What will this cost? What is the max risk? Reward? Which would you choose? How to close out the trade? How to roll the trade? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

In this episode, Brian explores long spreads. Specifically, long call spreads and long put spreads. These can be found on pages 60 and 62, respectively, of The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. Details include: The dynamics of spread trading Using AAPL as an example What to consider regarding forecasting and timing The value of the spread does not provide quick rewards Selecting strikes What is the maximum risk? What is the maximum reward? Always look at how much time premium you have Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

In this episode, Brian covers: Using a pricing calculator to review different scenarios Buying an out-of-the-money option What happens to delta? Looking at probability When time is your ally When to buy an out-of-the-money option How to get low time premium Closer to expiration = higher delta What about at-the-money options? When to buy, and when not to

  Last week, we started the back to the basics with the Greeks. You can find an entire chapter on Greeks in The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. In this episode, Brian discusses: Looking at probability using a 90-day option as an example What is the probability of an $8 move in a $60 stock in 90 days? Where do you think the option will be trading at in 90 days? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Now that earnings season is over it's time to get back to basics: the Greeks. You can find an entire chapter on Greeks in The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. In this episode: A review of last time Using the Greeks What does a delta do? Meet the Greeks in The Options Playbook As expiration approaches, what happens to delta? For that, you need gamma What about theta? Delta when a contract is in-, at- or out-of-the-mooney Delta moves slower than other Greeks You can't have slow time decay on a fast moving option Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

With MRVL still to announce earnings, it might be interesting to look at a long call spread in the name. You can find this on page 60 of The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. In this episode: A review of last time MRVL announces earnings on 8/24 after the close What is the outlook for MRVL Selecting the expiration What is the most at-the-money strike? Buying as much time premium as selling What is maximum risk? Reward? Selecting a different expriation What is maximum risk? Reward? Why does one trade cost more than the other? Time premium caveats Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Since it's still earnings, season we are going to continue to look at expensive stocks. Today's subject is Alibaba (BABA), and we are exploring a backspread. You can find backspreads in The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. The details: The difference bewteen a skip-strike butterfly and a backspread What do we want to happen? Why a backspread over a skip-strike butterfly? Earnings-related considerations What is the marketplace expecting after the earnings? Selecting strikes What will this cost? What is the timeframe? And more... Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

It's time for listener questions on Options Playbook Radio. Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com. In this episode Mark and Brian discuss: Question from LesNod: How the heck do you actually get out of straddles? One side of a straddle is always a loss! Question from Jelly: Can I buy longer-term options than LEAPS? Question from Kim D.: How high to rates need to go before I need to worry about rho? Question from Axel D.: Why do they update open interest only once a day?

Since we are still in the middle of earnings season, it makes sense to continue with stocks that are about to release earnings, in this case Tesla, which announces earnings after the recording of this show. You can find skip strike butterflies on page 108 of The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. In this episode, Brian covers: A review of last time Where did the AMZN skip strike butterfly end up? Where is TSLA? What is the outlook? What is the expected move? Setting up the trade: selecting strikes What's the maximum risk? Reward? What do you want to happen? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

We are back in earnings season. Given the possibility for big moves, we will look at the skip strike butterfly with calls, which you can find on page 108 of The Options Playbook. This is always available onoptionsPlaybook.com, in on the Amazon Kindle edition. In this episode: What happens to implied volatiilty around earnings? The dynamics of the trade The more costly the underlying, the more costly the option AMZN announces earnings on 7/27 after the close What is the "expected move"? Picking a close expiration Selecting strikes What is the maximum risk? What is the break-even point? What if we are completely wrong? What is the best-case scenario? Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.