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I had a bunch of short es 1550 puts for Feb, sold at around $3.
when it rallied to $6, i got nervous and covered by the end of the day at around $4.50 average. Sucks because theres like 23 trading days or so, and I know I should've stuck with the trade, but my size was too large…
U live and learn.
by the way, hello to all. Been following the forum for awhile but just signed up.
I follow Tastytrade, and like to sell puts on various stocks and ES with 45-55 DTE as far out as I can and still collect decent premium. Not as far as Karen the Supertrader, but I do like how she goes into a trade.. First , just assume the market is 10% lower- and then go even further out from there to sell premium...
Can you help answer these questions from other members on NexusFi?
This is something I just don't understand. Why would the collapse in the price of oil affect the market overall?
- The US economy is very diverse.
- Lower energy costs lead to lower transport and production costs.
- Sure some companies are hurt but a majority benefit, especially consumer focused businesses because lower energy costs translate to more money for people to spend.
- There's usually a lagging effect on energy prices but this has been happening for a while now.
I assume that oil producing countries hold a lot of stocks. They might sell now to get some cash.
Oil producing companies in the US probably needed a lot of money from banks. Some of these companies might get into trouble, and not pay back. Thus, also banks get into trouble.
You also have all of the related industries affected by lower oil. Railroads transporting less oil. Steel for oil drilling. Equipment used by oil industry. Housing and construction in oil drilling areas. Banks lending to oil and related companies. I'm sure there are more.
I'm a Tastytrade fan too, and am a 30 year veteran of futures and futures options trading. With the very high implied volatility, I've just been shorting puts in 6C (March .685) and CL (March 29.00). I believe both will consolidate and rally over the next few weeks, and love the potential for volatility crush, theta decay, and favorable directional moves.
As to ES, I like short puts here too as a near term directional trade, but the volatility just isn't high enough yet, as it was last August. I think we will see a 1-2 week rally here, but then we are heading much lower, to about 1500.