As we approach the end of earnings season, there are still a few names left to announce. Last week we talked about a FedEx butterfly. Let's revisit what has happened since. You can find more in The Options Playbook , which is always available on OptionsPlaybook.com , or on the Amazon Kindle edition. Specifically: A review of last week's FDX butterfly What has happened to FDX since the paper trade? What is happening in Nike? How about a back spread? Looking for volatility Hoping the stock will mo...
Mar 22, 2018•20 min
Last week we talked about a Costco butterfly. Let's revisit what has happened since. You can find more on page 102 (butterfly) and page 126 (iron condor) of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: A review of last week's comparison of the butterfly vs. iron condor in COST Breaking down the butterfly What about the iron condor? What happened after COST announced earnings? Implied volatility and time decay as factors ...
Mar 15, 2018•19 min
Last week we talked about a Costco butterfly. Let's revisit what has happened since. You can find more on page 102 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: A review of last week Where is Costco trading now? Setting up the trade Why timing matters Comparing this to an iron condor Why timing matters, part two More risk, more reward? Selecting strikes What is the desired outcome Do you have a question that you want a...
Mar 08, 2018•12 min
Let's review the skip-strike butterfly in PCLN from last week. You can find more on page 108 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. The long butterfly (used on the Costco paper trade) is on page 102. Specifically: A review of last week A change of name Did you adjust? Was time on your side? Who is up next? Costco Holdings! What are we looking for? Putting on an at-the-money butterfly Selecting strikes What is the break even? ...
Mar 01, 2018•20 min
As we enter the end of earnings season, there are still a few big names left to report, including Priceline, PCLN. This is an interesting opportunity for a 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: Earnings + expiration + implied volatility = interesting situation Goal: do the trade for a net credit PLCN announces earnings on 2/27 What is the expected move? What ...
Feb 22, 2018•17 min
We are back to the playbook this week and taking a close look at Wynn Resorts. There is a lot of volatility in the stock these days with the CEO in the news quite a bit these days. We are looking at a very short-term butterfly. You can find more on page 104 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: Why a very short-term trade? What is the desired outcome? What about the stock going ex-dividend? Setting up the trade...
Feb 14, 2018•16 min
It's time to huddle up and take on listener questions in this episode of Options Playbook Radio. Question from Janice: Hi Brian! I have a question about the way you talk about the alternatives available for managing the LEAPS option put spread if the market goes down. Can you please explain? Question from Matt: What's up with the FB $5 calls? Question from Johnny Bananas: If you buy a put option and the strike price is $5 and the stock drops to $3, is it still worth money?...
Feb 08, 2018•25 min
Continuing with the idea of FAANG stock earnings, today we're looking at an AAPL protective put. You can find more in The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: A review of last week How do you protect yourself against a big move in AAPL after earnings? Where is AAPL now? What is the outlook? Selecting a strike and expiration What is the cost? Upside? Meeting the "deductible" What about a protective put spread? What is...
Feb 01, 2018•22 min
In this episode, we are looking at a calendar trade around earnings in TSLA. You can find more in The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: Where is TSLA trading as of this recording? When are they expected to announce earnings? Where is the at-the-money straddle right now? Setting up a trade into earnings Selecting a strike The volatility caveat What is the desired outcome? Do you have a question that you want answer...
Jan 25, 2018•12 min
In this episode, we are looking beyond the Options Playbook and are selling a put credit spread to pay for a long call. You can find more on p. 76 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: Looking at Intuitive Surgical, Inc. (ISRG), which has been on a tear lately Earnings pushed the stock even higher Expensive underlying = expensive options Taking a long view using LEAPS Selecting strikes for the put spread Buying...
Jan 18, 2018•16 min
In this episode, we are looking beyond the Options Playbook and are using a long combination to create a synthetic stock and buy protection. You can find more on p. 76 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: A review of last week's episode What is a synthetic long stock? Where is Facebook now? How to create a synthetic long position Adding a twist...using a put spread Selecting expirations and strikes What is the...
Jan 11, 2018•17 min
Welcome to 2018! Let's jump right into strategies, specifically around earnings. In this episode, we are looking at a long calendar spread with puts in FCX. You can find more in The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: Why are we picking FCX? When does FCX announce earnings? What is the implied volatility? Why are we expecting a major announcement? Why pick a calendar around earnings? Defining a calendar spread Remem...
Jan 04, 2018•16 min
Mark and Brian are back to answer listener questions. In particular: Question from Taj Penaso - Hi, will there be options for bitcoin once the futures are traded?? or just the futures until there are tradeable ETFs available? Thanks. #Options #QOTW - Now it's a party! #Bitcoin futures are live on both @CMEGroup & @CBOE. But everyone's asking us the $1M question - "When will we get #Bitcoin #Options?" So we thought we'd ask you - When will we be able to trade #options on these futures? 52% - ...
Dec 28, 2017•26 min
In this episode, we are looking at a covered call, but with a twist: a credit spread around stock you already own. You can find more on page 80 of The Options Playbook , which is always available on OptionsPlaybook.com , in on the Amazon Kindle edition. Specifically: FedEx announced earnings on 12/20, was up 3.5% after the announcement It hit the all-time high on 12/20 What are the benefits of doing a credit spread instead of just a covered call? Setting up the trade: picking expiration (and why...
Dec 21, 2017•14 min
Mark and Brian are back to answer listener questions. In particular: Question from Ariell - Why should I ever buy puts? I can use a stop order in the stock for free and then put that extra capital to work in my trading account. By my math using stops instead of puts can boost your account 5-10% per year. That's a lot of cheese. Question from The Financial Grynch - Do you REALLY reckon long options is profitable? Question from Lonesome - Could you explain Theta and how it helps/hurts options trad...
Dec 14, 2017•25 min
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 Bria...
Dec 07, 2017•13 min
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? ...
Nov 30, 2017•19 min
For your listening pleasure, we bring you an all-listener question episode of Options Playbook Radio.
Nov 23, 2017•18 min
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...
Nov 16, 2017•20 min
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 t...
Nov 09, 2017•16 min
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....
Nov 02, 2017•16 min
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...
Oct 26, 2017•22 min
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 s...
Oct 19, 2017•20 min
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...
Oct 12, 2017•23 min
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?...
Oct 05, 2017•16 min
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...
Sep 28, 2017•22 min
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 maxi...
Sep 21, 2017•19 min
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
Sep 14, 2017•20 min
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? Se...
Sep 07, 2017•13 min
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 m...
Aug 31, 2017•20 min
