Moist_Lunch_5075 t1_j9lwdoc wrote on February 22, 2023 at 10:32 PM

Reply to comment by DesmondMilesDant in Wall Street Newsletter S02E07 : Why is there such a disconnect b/w Stock and Bond market? by DesmondMilesDant

Likewise!

I'll try to put something together on how I think about trades. There are lots of trade structures out there, I could probably spend the rest of my life experimenting with all of them, but have done enough to have a decent understanding.

Where are you starting from? What kind of trades have you done and what were your best ones?

DesmondMilesDant OP t1_j9mmj41 wrote on February 23, 2023 at 1:35 AM

I used to trade crypto. Longed the 30k dip and then shorted 60k. And then utilized the profits to long at 33-34k again and then shorted the 48k. Then like a poker addict i went all in at 33-34k hoping for a 100k "The dream". But got rekt holding Elon bags.

Then i switched to stock market. Rode all the rally up with crypto stocks and other high betas and then bought the inverse etf for the way down. Rinse and repeat until nov 2nd week.

Then there were many naked option plays here in my country nifty stock market as an arbitrage for usa-india play using timezone. Also tried to play legendary 7yr shmita cycle and Yen carry trade.

Wbu sir ? What were your best plays?

Moist_Lunch_5075 t1_j9ndx8q wrote on February 23, 2023 at 5:17 AM

My first options trade I made $3600 playing AMD calls after predicting the August 2021 post-earnings run (post in my history). I made some decent money with puts on Zoom back then, too. Then I got happy and lost a bunch of money playing into September thinking I couldn't go wrong LOL.

That set me straight and I started really spending serious time learning to trend the market. That brought me to the place where I could detect weakness in the trend change and liquidated all of my individual equities in December 2021, detecting the decline. I then shifted to a buy and accumulate strategy against S&P sectors to ride out the storm but that wasn't doing what I wanted, so I began running a hedge strat using a combination of SPY puts and SPY/SPXU and QQQ/SQQQ trend cover strat where I accept risk when we go long and cycle the short when we have high risk periods, mostly using the EMA 8 high and low as a trigger.

I've found I'm pretty good at trending on the 1Y SPY chart and correlating that with movement against individual equities.

In January I made some decent cash playing calls post AMD earnings riding the overall market wave. Basically scalping IV and value expansion during the run. My ideal play is based in Cup & Handle structures which display solid risk and play expectations for me and I've gotten pretty good at playing them.

In between I had a number of decent wins and losses. Played towel stock and made money.

When I have planned plays, I do really well. My weakness is largely around degenerate gamble plays but I'm getting better at avoiding them. LOL

I've found that one of the structures that works for me as far as trade structures is concerned are spreads. Very limited return, but they're cheap and they can be positioned just barely out of the money.. within the pay range so they have a higher chance to hit... my problem is I win a bunch of them and start playing naked calls or puts and then overleverage. One of my rules now is that I avoid leveraging into a play.

Anyway, that's an unstructured discussion on strats... I'll see if I can write something up on my favorite hedge plays.

One structure I recommend playing with is calendar trades. They're good ways of limiting cost on options but maximizing potential return.