The Official Options Thread

[ajlaxmn]

Originally Posted by Blazed

Whole psych number & previous resistance.

Ok, mine was based on O/I Call and resistance from yesterday

[Blazed]

Originally Posted by Blazed

Watching market but likely not trading until FOMC. Statement @ 2 pm Powell @ 2:30 pm

New traders and small accounts, this is a good day to watch. If you do decide to trade not a good idea to do 0dte unless you're sized to 0.


SPX: 4400 top (break above 4410) / 4370 key level / 4330 bottom (4350 support & gap @ 4340.13)


Watching:

SPY - bounce 436.6 for calls (High risk. Trying to catch an uptrend entry at this level). Or if we don't get the bounce, a break above 437.87 for calls.

TSLA - TSLA filled the gap so I'll be watching for a continuation up.

Done trading until FOMC.


SPY - bounce 436.6 for calls✅ congrats if you caught it.

SPX - 4370 key level✅ Took SPX calls @ the break above 4370 and cut my position @ 4381.

[ajlaxmn]

Got into 4370Puts when I saw SPX rejecting 4370, however it did close above it, exited at second 4370 5m candle as it closed slightly above but also it just didn't feel right to me, hard to explain, but I just felt it. Immediately jumped into 4370 calls and sold at 4378, small profit, but liked me switch of position, entry was bad because it was incorrect. Also 4370 was the better key level than 4375.

[Blazed]

Wow that pump. I have no idea how that moved like it did - flow was sideways. So basically there was nothing supporting that pump except volume. Usually volume needs something to support it as well and it's not there. They front ran this on weak signals. Will see where Powell puts us when he begins his speech, but I'm not buying the top.

[Blazed]

Originally Posted by ajlaxmn

Got into 4370Puts when I saw SPX rejecting 4370, however it did close above it, exited at second 4370 5m candle as it closed slightly above but also it just didn't feel right to me, hard to explain, but I just felt it. Immediately jumped into 4370 calls and sold at 4378, small profit, but liked me switch of position, entry was bad because it was incorrect. Also 4370 was the better key level than 4375.

You sae how I got it? Remember when I said sometimes you have to tweak levels a little? Strong resistance turned support will override OI especially when it's a whole psych number. We also had an ATR band @ 4369 (last close). So when I see stuff like that I adjust levels a little so that I can trade level to level instead of trying to get in a trade in-between levels. I don't mind exiting a trade in-between levels, but I don't enter in-between.

But it was good to note that 4375 had big OI because we could have rejected there - but we had a higher probability that we pushed higher.

[ajlaxmn]

Originally Posted by Blazed

You sae how I got it? Remember when I said sometimes you have to tweak levels a little? Strong resistance turned support will override OI especially when it's a whole psych number. We also had an ATR band @ 4369 (last close). So when I see stuff like that I adjust levels a little so that I can trade level to level instead of trying to get in a trade in-between levels. I don't mind exiting a trade in-between levels, but I don't enter in-between.

But it was good to note that 4375 had big OI because we could have rejected there - but we had a higher probability that we pushed higher.

I'll need to go back and look at previous 4370 resistance/support, I did note 4375 resistance from yesterday, in addition to the O/I for 4375 being higher than 4370, but I'll double check the 4370. That's good to note regarding tweaking a level, it sounds familiar, I don't remember when you said it, but it does sound familiar.

[Blazed]

5 minutes until FOMC. Trading FOMC is supper high risk as price moves fast. I will be trading 0dte only for FOMC. That said, only trade with what you can live without if you decide to trade.

Small accounts/people learning, good time to watch not trade.

What I'm watching:

SPY reject 439.5 - 440 for puts

SPY bounce 436 - 436.5 for calls


Then wait for Powell to speak.

[ajlaxmn]

Grabbed 4360 Puts on the way down, per momentum trade, held for a bit then took a nice little $300 profit, i was watching 4375 leading up as we were hovering right at it, that would have been the play to wait for leading up to announcement.

[Blazed]

Originally Posted by Blazed

5 minutes until FOMC. Trading FOMC is supper high risk as price moves fast. I will be trading 0dte only for FOMC. That said, only trade with what you can live without if you decide to trade.

Small accounts/people learning, good time to watch not trade.

What I'm watching:

SPY reject 439.5 - 440 for puts

SPY bounce 436 - 436.5 for calls


Then wait for Powell to speak.

Upper level didn't hit and it blew past my bottom level. So no entries for me - not chasing anything. Now just waiting for Powell.

[Blazed]

Originally Posted by ajlaxmn

Grabbed 4360 Puts on the way down, per momentum trade, held for a bit then took a nice little $300 profit, i was watching 4375 leading up as we were hovering right at it, that would have been the play to wait for leading up to announcement.

Nice trade, see, 4375 worked out intraday always good to note that kind of stuff.

[ajlaxmn]

Originally Posted by Blazed

Nice trade, see, 4375 worked out intraday always good to note that kind of stuff.

Yeah I know, just initially it would not have worked out as well, but yes I am learning valuable lessons of knowing all the ins and outs of various supports and resistance throughout the day.

[Blazed]

SPX: 4400 top (break above 4410) / 4375 key level (4395 resistance) / 4320 bottom

Watching:

SPY - bounce 434 for calls (with confirmation - high risk) Main bounce area 433.58 > 430 (higher probability).

437-438 area on watch for a reject (high risk) 439.5 (higher probability with confirmation).

[ajlaxmn]

Originally Posted by Blazed

SPX: 4400 top (break above 4410) / 4375 key level (4395 resistance) / 4320 bottom

Watching:

SPY - bounce 434 for calls (with confirmation - high risk) Main bounce area 433.58 > 430 (higher probability).

437-438 area on watch for a reject (high risk) 439.5 (higher probability with confirmation).

Just watching the above. ToS online can fly a kite.

[Blazed]

If you're using ATR bands, there's your one good trade. I'm still in calls until volume says otherwise or we hit 4395. Then I'll switch to puts.

[ajlaxmn]

Originally Posted by Blazed

If you're using ATR bands, there's your one good trade. I'm still in calls until volume says otherwise or we hit 4395. Then I'll switch to puts.

I don't have ATR bands loaded on ToS online, i was just looking at the break above 4375 for a nice little gain, which would have worked, but not as good the ATR bounce.

[Blazed]

Originally Posted by Blazed

SPX: 4400 top (break above 4410) / 4375 key level (4395 resistance) / 4320 bottom

Watching:

SPY - bounce 434 for calls (with confirmation - high risk) Main bounce area 433.58 > 430 (higher probability).

437-438 area on watch for a reject (high risk) 439.5 (higher probability with confirmation).

Originally Posted by Blazed

If you're using ATR bands, there's your one good trade. I'm still in calls until volume says otherwise or we hit 4395. Then I'll switch to puts.

Trade recap:

All done for the day. Daily gain $17.5k. Gave my exact trades as I was doing them and what I was watching for. All trades I took were level based and stress free. When you know what you're looking at and how to read the market, trading options isn't hard.

Out of calls and into puts @ 4395✅ - all out of puts @ 4388.

SPX: 4375 key level (4395 resistance)✅ to the T.

Contracts on calls moved $980 > $2,300, gain of $1,320 per contract.
Puts moved $1,000 > $1,460, gain of $460 per contract.

Also, my APPL put swing is in the red, down $930 on them with APPLs pump up today.

Hope everyone enjoys the rest of their day. if you caught the trades congrats, good time to get screen time in and additional education.








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Added: Congrats if anyone caught that retest of 4395 (4396.6) I didn't but volume confirmed that drop was coming.




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Added: 9:48 - Actually I'm not done. I'll be watching 4404 for a reject with confirmation. Lets see if we can get it.

[Blazed]

Originally Posted by Blazed

Added: 9:48 - Actually I'm not done. I'll be watching 4404 for a reject with confirmation. Lets see if we can get it.

I'll be watching 4404 for a reject with confirmation✅ - We got it. A nice $260 per contract scalp for an extra $2,600 for the day. Awesome day today. Now I'm really done, Back at it tomorrow.

[Blazed]

I hope everyone's watching what they're doing to the market.... and we have OPEX tomorrow.

[Braswell10]

Originally Posted by Blazed

I hope everyone's watching what they're doing to the market.... and we have OPEX tomorrow.

I think we are going to blow by $450 on SPY with this momentum. Blazed, do you think we test Covid highs?

Like I said a few days ago, I am watching $450 to take a put swing position, but with how they are running the market, I am not sure if I feel confident in that anymore. I guess it all depends on when we get to that level.

[Blazed]

Originally Posted by Blazed

Added: OPEX visual for reference.

See the OI on the 4400 calls for June 16th?

Fyi, 10 days ago I tried to give everyone a heads up about 4400... only one person (that I know of) took 4400 calls with me on the 5th and sold today. I've had these OTM 4400 calls since I posted that. Calls went from $500 (dipped down as low as $190) > $3700.

Remember what I said, the market is options driven. The move that happened today should have happened yesterday. But they held the market down. SPX got squeezed today again which caused that rocket up.

These moves aren't technical which is why they're blowing past levels. But if you understand the greeks and dealers... this gets into the hedging issues. Remember, dealers are delta hedging the options they sell, so if they have to deal with this big delta ramp we see due to iv, they have to be selling the underlying to hedge their downside deltas from these puts.

BUT, if we then get the move back up, they can buy back some of this selling they did, because the deltas come back down again. Then, because of that decay in deltas, due to IV coming down, and due to time passing (charm), on the next pushes down, the dealers don't have to hedge (sell) as much because the delta has now decayed more due to time. The market participants who bought these contracts from dealers now want to get rid of them before they go to 0, so they sell them back to dealers and this lets dealers buy back even more of that selling.

This is why we seem to get those crazy pumps because these puts get "monetized" (sold back to dealers by customers who bought them) and this allows those dealers who sold them to buy back the underlying. This effect along with the need of dealers to now hedge the calls to the upside as we move up can give us these sharp moves.

[Blazed]

Originally Posted by Braswell10

I think we are going to blow by $450 on SPY with this momentum. Blazed, do you think we test Covid highs?

Like I said a few days ago, I am watching $450 to take a put swing position, but with how they are running the market, I am not sure if I feel confident in that anymore. I guess it all depends on when we get to that level.

Wait until next earnings season I'll be starting my put position soon and going a few months out.

But for now, lets see what they have instore for us tomorrow (OPEX). It should be a fun day.

$2.2 Trillion notional SPX/SPY contracts are set to expire tomorrow. This will be the largest June OPEX on record.

[Blazed]

Reminder, today is OPEX, Quad Witching, and the market is closed on Monday. Today could be a lot of fake outs or weird moves. Only trade with what you can live without. Don't go into the long weekend mad over a losing trade.

Small accounts/new traders - good day to watch how the market moves.


No SPX levels for now. 6 mins until AM SPX options expire and market is pumping right now so I will get levels after open


Watching:

SPY uptrend entry for calls or bounces at 438.5 - 438.
Not seeing any rejects I like so I will watch for rejects intraday.

[Blazed]

SPX: 4475 top / 4400 bottom (break below 4490) That's all I'm watching, I'll trade off ATR's today.

Be patient and only take A++ trades.

[ajlaxmn]

Originally Posted by Blazed

SPX: 4475 top / 4400 bottom (break below 4490) That's all I'm watching, I'll trade off ATR's today.

Be patient and only take A++ trades.

Just watching today, mainly because I am on ToS online.

[Blazed]

If anyone took puts off the open based on selling volume you're up very nice! Don't let it go red.


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