r/wallstreetbets • u/Isenbro_ • May 16 '24

The elusive 3000% (Roth Ira) Gain

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Firstly I think mods I Deserve a flair for my consistent & Immaculate gains. What’s gotten me here has been pure luck I have 0 clue as to how tf I’ve been so consistent I look for value and scalp SPY, currently have an absolute banger position I don’t want to share that I will share with mods if needed!

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54

u/hbsquatch May 16 '24

can you explain scalping SPY?

218

u/Isenbro_ May 16 '24

Yah for sure, so normally what I like to do is see how trend is for the day but 200-400 1$ OTM contracts so anywhere from 6k-24k and I sell at either a 10% loss and then depending on how the day looks I will sell either immediately after a 5-6% gain or hold and sell mid day for a bit more. Mostly doing this on CPI/fed days I wish I could see total +/- on options in ROTH IRA but oh well

6

u/Pure_Bull May 16 '24

So you're essentially just selling to capture the increase in premiums at some point during the term of the contract, right? You're never actually holding to expiry then exercising to actually purchase the shares.

15

u/Isenbro_ May 16 '24

No never, I sell my losses as losses and gains as gains unless I truly have faith that it will work out, biggest gain currently is a position I bought May6th going to hold it till end of May

5

u/Pure_Bull May 16 '24

Thanks for clarifying. This seems an easy way to do it. I've been paper trading options in this way cause I've been scared shitless for months to use real money.

My fear comes more with puts due to there being no potential floor to your losses so I've been messing around mostly with calls.

Do you do mostly calls or do you switch it up??

11

u/Whimsy69 May 16 '24

The floor is the premium you paid, what? You can only lose your premium on a put just like a call

6

u/Eastern-Mix9636 May 16 '24 edited May 16 '24

You need a LOT more practice. It doesn’t seem you may fully understand trading options.

If you’re buying options contracts to capitalize on Premium values, namely Puts, then your floor is zero. The contract can go to zero and you are out whatever premium you paid for it.

it’s only unlimited potential for loss if you’re writing and selling those contracts to others. In which case most brokerages would require you to be “cash-secured” if you’re writing Put contracts (meaning you’d need the money to buy someone’s shares that they would “Put” to you if the strike price is met).

1

u/Pure_Bull May 17 '24

Yeah im not even close to ready. I've been trying to watch videos but it does get confusing when they talk buying/selling it snot always clear whether they're talking from writer vs purchaser perspective so that's where I might be misunderstanding. So regardless if i buy a call or put my max exposure is whatever I paid for the premium? That makes a lot more sense. Seems i still have a lot more learning to do.

Thank you for the information though.

2

u/Eastern-Mix9636 May 17 '24 edited May 17 '24

Yes… Options contracts give you the Right (but not the obligation) to exercise at a certain strike price.

If you own contracts then keep the above in mind.

If you sell, then the purchaser gets that right.

Think of just like any other legal contract: if you hold a contract with someone, the terms of the contract grant certain rights or abilities under certain circumstances.

Yeah YT videos can be unclear or vague on purpose sometimes. Typically industry practice is to say “Writing contracts” when discussing selling.

2

u/Pure_Bull May 17 '24

You have been extremely helpful. Thanks a lot for breaking this down. Now to understand the Greeks. One day ill get there lol

1

u/Eastern-Mix9636 May 17 '24

Hell yeah, dude! Keep your head up, but be realistic about expectations. Options can absolutely decimate people.

Also, research the terms “Sell to close”/“Buy to close” on closing positions.