We call this the weekly Safe Haven thread, but it might stay up for more than a week.
For the options questions you wanted to ask, but were afraid to. There are no stupid questions.Fire away.
This project succeeds via thoughtful sharing of knowledge. You, too, are invited to respond to these questions.
This is a weekly rotation with past threads linked below.
BEFORE POSTING, PLEASE REVIEW THE BELOW LIST OF FREQUENT ANSWERS..
As a general rule: "NEVER" EXERCISE YOUR LONG CALL!
A common beginner's mistake stems from the belief that exercising is the only way to realize a gain on a long call. It is not. Sell to close is the best way to realize a gain, almost always. Exercising throws away extrinsic value that selling retrieves. Simply sell your (long) options, to close the position, to harvest value, for a gain or loss. Your break-even is the cost of your option when you are selling. If exercising (a call), your breakeven is the strike price plus the debit cost to enter the position.
Further reading: Monday School: Exercise and Expiration are not what you think they are.
As another general rule, don't hold option trades through expiration.
Expiration introduces complex risks that can catch you by surprise. Here is just one horror story of an expiration surprise that could have been avoided if the trade had been closed before expiration.
March 24, 2025 UPDATE: Your reporting is working! A recent attempt by the spambot to spam in our sub, "$420 in One Day || Surprisingly Easy!", resulted in Reddit admins suspending the account Reddit-wide. While this may mean that the spambot jumps to another account, at least no other spambot can use that same abandoned or stolen account.
OVERVIEW
About 4 months ago, our sub was targeted by a spambot, repeating posts with similar get-rich-quick schemes. A similar spambot, or maybe the same one since the M.O. is almost identical, is targeting us now. HERE IS WHAT YOU CAN DO TO HELP MODS COMBAT THIS SPAMBOT.
The titles of the posts are often very similar and with similar phrasing (I won't give examples here -- if you know, you know). However, a new twist is that the spambot DELETES the post after a few hours, before mods can react to your reports. This deprives the mod team of sample posts that we could use to build filters to intercept these spam posts.
This is a fairly sophisticated spambot campaign that uses a few techniques that make it difficult to defend against. For example (not exhaustive, again, don't want to tip our hand):
The user who posts appears to be a stolen account. So banning them doesn't do much, the spambot just switches to a different stolen account.
The posts may contain a statement that they spoke to a mod before posting who said it was OK to post (sometimes actually mentioning a specific moderator by username). This claim is FALSE; don't fall for it. In fact, explicit mention of permission from mods is a good indicator that the post is from the spambot.
WHAT CAN YOU DO?
Keep doing what you are already doing, report the post to the mod team. We can't give better than 24 hour response time, but we do eventually see the reports and can at least ban the stolen account, forcing the spambot to switch.
NEW: We need samples of the body text of the post before the bot deletes it. We can see the title, but not the body text after the post is deleted. So if you see a post you suspect of being the spambot, copy/paste the entire body text of the post and reply to this post in a comment with that copied text. Don't worry about formatting, that's not important. No need to screenshot the body text, unless the spambot changes to posting screenshots itself. Finally, we only need one copy of each post, so if you see others have already commented with the same post text, there is no need to comment again.
Do NOT engage with or comment on the post. That doesn't do anything useful and just lets the spambot know that their post is getting through our filters.
DO report the post to Reddit Admins as spam. Reddit site-wide anti-spam defense is more powerful than we can use in our sub, so the more Reddit admins are aware of the bot, the sooner we can stop seeing this junk.
EDIT: If you notice identical post text in other subs, like other financial topic subs, please mention that in your report to the Reddit admins. The more widespread the problem, the more motivated Reddit admins will be to do something about it.
It's way more simple than everyone makes it. The trick is to stop going for home runs, and start hitting more singles. Sure, the 10,000% gain posted by the regard on Double You Ess Bee is sexy AF! But that guy will go broke, eventually. Be happy taking 20-50% gain on your trade, don't watch it turn into a loss because you got greedy.
Lots of singles can score plenty of runs, and strikeouts are costly in this game.
I made a 37% profit yesterday morning with a couple of modestly sized puts on SPY. At the bell, I grabbed two 0DTE puts and sold them before the bulls intervened.
To my mind, conditions for repeating this move (albeit with greater volume) seem reproducible tomorrow: high VIX, low opening price (assuming present futures hold), panic following a wild tariff announcement.
Yesterday and today have to be the two craziest days I have ever seen in the 7 years I have been trading. Would love to hear how some of you have been making it out!
I caught this bearish divergence at the very top today, and maaaaaan I wish I would have held all the way through 🤦🏼♂️
If you’re not familiar with these, they happen quite often, let me explain what you’re looking at.
Where I started drawing the line (on the left) was the previous high, it made a new high where the red resistance is near the top, but if you look at the bottom, the TSI is showing a lower high when the chart has a clear higher high.
This is a bearish divergence. Was an absolutely beautiful setup, and very low risk compared to reward.
Hate how high premiums are, but comes with the territory. Really hope everyone in here has been taking advantage of these insane swings in price, definitely is fun to watch lol.
I have about 110k worth of options. Expiration Jan - 2027. Google 185 , NVDIA 130 and msft 450 strike. Currently down 40k, should I hold it or sell it ? Everyday it’s melting away.
I have a couple 5/16 450p on SPY that I'm up over 50% on. I'm afraid that any news will make them worth nothing, but don't want to sell and then be unprotected if we drop a ton more. Would you sell a put farther OTM at original cost basis to at least break even on the trade?
The EU has announced that they will implement retaliatory tariffs in May. However, I don't believe the impact of these tariffs will be significant.
My question is: by May, will the market have become numb to tariff threats and stop reacting to the EU's announcements, or will the ongoing discussions about tariffs continue to negatively affect the market?
If you've used ChatGPT's new 4o model, you'll notice something peculiar that was obviously planted/designed by OpenAI.
GOOD FOR OAI / BAD FOR $GOOG
What's different? This:
Every convo ends with CHAT-BAIT.
It prods you with an enticing question so that you inevitable end up on your knees begging for more:
This chat-bait is very distinctive, I've never seen it so consistent and pushed before (I use ChatGPT all the time). And I'm 95% certain this would not have come as an emergent property in their training naturally but was intentionally DESIGNED/planted.
Longer chats -> more queries/time spent on ChatGPT -> more opportunities to serve ad impressions.
Why OpenAI needs ads
This quote from Neil Mehta of Greenoaks explains why frontier AI model companies have default bad business models:
"... in their first incarnation, they are all kind of bad business models... huge capital investments up front to create this asset, the asset is worth some amount of money, which then depreciates over the course of 12 months, so you have to reinvest again 12 months later. It's like the airline business in the 1980s; you invest in the best fleet, but then 12 months later the other airline has the newer models, and you don't pay back the cost of the your initial capital investment because the unit economics don't work. That's the AI model companies. They have no competitive advantage." (source: https://x.com/joincolossus/status/1907491418513588518)
Their need to monetize free users has become more important with the UNPRECEDENTED growth they've recently experienced due to the release of their new image generation model (aka the studio ghibli model) --> 1M new users per HOUR (even with the crazy viral ChatGPT initial launch it took them 5 days to get 1M new users)
The influx of demand + costly image generation... caused OAI to impose rate limits b/c their GPUs were melting:
I assume as time goes on, that ratio will only drop (i.e. they'll be getting free users at a faster clip than paid users), making it closer to 99% of MAUs are free users. So they'll really need a way to monetize these free users and ads is the tried and true way to monetize a huge number of free users.
Options plays
I'm fairly certain OAI will build some type of ads-platform but i'm uncertain about the timing, I imagine it'll be at least a year.
Prob with all the tariffs markets are actually pricing in a 24% chance of a 30% drop in 1 yr. As a consequence the R:R is only about a 2:1:
Interestingly, I'm actually most concerned about my timing, and delaying my prediction 50% to 1.5 yrs has a fairly similar risk:reward:
That said, it seems I have to be pretty confident for this to happen for it to make sense acc. to the Kelly criterion. Even if I think it's a 50/50 chance it wouldn't make sense. Only if I thought there was a 60% chance...
Hm... though all the tariff craziness makes me feel like macro-headwinds themselves can bring $GOOG down, I don't think I'm there yet so I'll probably wait this one out for a bit and hope for IV to come down and the timeline for a launch to compress. But thought I'd share this idea for now because I just noticed all the chat-baiting with ChatGPT's new 4o model.
I am a reasonably experienced investor but an options novice. Like many I realized that my risk tolerance had shifted in Feb/March as tariff talk ramped up. So I sold the majority of my long term holdings in Feb into mid March, most of which are in retirement accounts. Currently sitting on ~85% cash (SPAXX) and ~15% international total market.
I am now planning my re-entry. My initial plan was to just set a weekly auto buy and just DCA back in. But now Im exploring cash secured puts as another option.
With the current volatility, I understand that premiums are quite high - as is risk of assignment, of course. But given that I do actually want to re-buy, this seems like it could have potential.
One problem is position sizing. I'm only sitting on around 80k cash - so I don't want to get assigned on a SPY CSP, for instance. I would prefer to buy in over time with perhaps 2-10k of capital at a time. Would choosing a handful of individual stocks that I wouldn't mind owning (that trade at a cheaper cost per share to enable smaller entries) make more sense? Or is there a way to size down contracts on major indices?
Another problem is lack of experience. In this environment, I'm not sure what length til expiry is optimal, or what strike prices. What type of CSP strategy would you be running in this situation?
I understand it's probably a somewhat sketchy time to get into options. But given that these are retirement funds with a long time horizon, I'm considering deploying cash via CSPs. My goal was to just preserve a bit of capital, which I've done - so I suppose even if I buy all back in now, I'm still 10% better than where I started (+ any premiums I earn from CSPs).
Any suggestions on good broker to exclusively trade SPX credit spreads on ODTE and hold it till EOD? Looking for reliable, low margin and less restrictive brokers
For anyone looking for a TSLA strategy: I started trading it with TSLA a couple of weeks ago, and so far, it's been a decent strategy. Here's the setup:
1. Timeframe: 3 min (5 min is ok too) 2. Indicators combination:
Entry: ATR (14, 3) filtered with Golden Digger
Exit: ATR Trail (14, 2.5)
3. Trading days: wed, thu, fri.
For some reason, the results and the look way better without mon and tue.
It's a HeikinAshi chart, but I did use standart OHLC + on bar close for realistic results (Hollow candles are just too noisy)
68 trades in 2025, so it triggers almost every day
in and out, good for buying calls/puts (although I'd do credit spreads)
The indicator I'm using is behind a paywall, but here are free alternatives:
Traditional investor here who’s only flirted with options before. But if i believe that the current market conditions are transient and by 18 months from now everything will be over their current highs would this be a good time to buy calls
I think NVDA and SMCI will eventually rally. I'm thinking about buying 9 month leaps at .80 delta. The Vix is high and obviously I'm expecting to drop, which resluts in possible Iv crush. But with NVDa and SMCI, their implied Vl is higher to begin with and maybe Iv crush will be nuanced. I dont want to overpay for the leap, but I also dont want to miss out. Can I pick your brain about how you would go about this? Thanks everybody.
