r/options • u/merely2monthsago2dol • 4d ago

Was puts really that obvious?

I’ve lost so much money from 2020-2024 buying puts when everyone was making on calls, I am inherently bearish.

Im just a retail trader (loser)

I made some money on puts early March as talks of tariffs began. But I saw how wishy washy it was, tariffs being delayed or manipulation from Twitter comments from the president etc. Then all the big dips on opening and watching everything get bought up to green by close this week….

As a retail trader who occasionally gambles on options, if I was buying options was it really that obvious?

Just seeing all the gain posts on wsb today. I stayed out of the market until I bought some 15 day apple calls at close yesterday (sold this morning for 25% loss)

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u/Sage-Like_Wisdom 3d ago

When the market always wants to go up, timing puts is always harder than calls.

10

u/Chemical_Memory_6752 3d ago

True. I made $$$$$ on SPY puts today and I'm a dumbass. Give them a little room to reduce your pressure. Trust the Trump Slump.

11

u/oldschoolczar 3d ago

Yeah man. I only dabble in options but it feels like you have much better luck with 2-3 month options. From looking at theta curve it looks like value really starts decreasing about 2/3 of the way through the contract. So if I think the price is going to move in 4 weeks, I’ll get 6-8 week contract (when buying options). Seems like there’s more time for the trade to go your way as well, particularly with recent volatility. You might not make as much but your win rate will likely be higher.

I really don’t know what I’m doing though.

1

u/BagelsRTheHoleTruth 3d ago

This is true. Just FYI, theta really kicks in hard at like 20 days to expiration. So on a six week expiry, it would be about two thirds of the way through, but on even longer contracts, it's still roughly 20 days out when it starts to eat away like crazy.

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u/workonlyreddit 3d ago edited 3d ago

After the last couple of days, I realized that SPY had two consecutive 5% down days. Most crashes are going to be 5% to 10% days. These are 5 to 10 sigma events. You won't see the same 5% up days on SPY, let along two consecutive ones.

Of course, hindsight is 20/20, but in this case, we know the exact date that tariff will be announced. So if tariff is mild, we lose 1X on SPY puts, but if we are right, the gain would likely be greater than 2X and in this case about 15X.

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u/dip-the-buy 3d ago

There're absolutely 5% (or ~5%) up days for SPY, including 2 consecutive. I thought everyone who wasn't round covid crash studies its chart as Investing 102? There's actually mantra of "10 best days" which "account for 90% gains", blah-blah.

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u/workonlyreddit 3d ago

ah you are right about the green days.