The Official Options Thread

[Blazed]

Originally Posted by ajlaxmn

I had 4720 for key level. Had SPY levels, yesterday high and premarket low, but not going to use either now. Going to play your 4730 and 4696 as my ONLY trades, either one hits with confirmation I take, they don't hit or their is no confirmation, no trade. Keeping it simple today.

I'm using those because that's the best R/R since today isn't a normal trading day. They've also been solid S/R levels. So no trades unless either one of those levels hit.

Flow is getting bearish. Gama is strong @ 4700 so it will be interesting to see what they do.

[ajlaxmn]

VWAP getting continuously rejected.

[Blazed]

Testing puts here @ 4720 broke below and retest. light size high risk.



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Added 9:57


Out for a $690 loss. Didn't follow my plan, but the R/R was there. Trade just didn't work out.


Now I'll wait for my 4730 level and see what we do there lol.


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Added 10:14


this is what makes OPEX fun

[ajlaxmn]

Will be curious if we get to 4730 how the SPX middle BB and SPY middle BB/VWAP act as support.

Edit: That is if SPY breaks above middle BB, right now acting as resistance.

[Blazed]

Originally Posted by ajlaxmn

Will be curious if we get to 4730 how the SPX middle BB and SPY middle BB/VWAP act as support.

Edit: That is if SPY breaks above middle BB, right now acting as resistance.

We should. I also still think we get to 4700/4690 too. Thought here is they sell into close.

Volume is pathetic today so not really watching it too close. Won't worry about volume until we get a bar over 2 million. Mainly just watching ATR's & levels.

[ajlaxmn]

Could have entered for a quick potential 8 point scalp here, but I don't feel like doing that, so no entry.

Edit: Or a 14 point scalp

[Blazed]

Originally Posted by Blazed

I'm using those because that's the best R/R since today isn't a normal trading day. They've also been solid S/R levels. So no trades unless either one of those levels hit.

Flow is getting bearish. Gama is strong @ 4700 so it will be interesting to see what they do.

Gama is strong @ 4700✅- might still hit 4700 but 4706 was close enough for me.

They wouldn't give us 4730. Kept rejecting off 4725 then chopped around last close all day. I tried puts again @ last close reject after following volume - volume told the story.

Originally Posted by Blazed

We should. I also still think we get to 4700/4690 too. Thought here is they sell into close.

Volume is pathetic today so not really watching it too close. Won't worry about volume until we get a bar over 2 million. Mainly just watching ATR's & levels.

Won't worry about volume until we get a bar over 2 million.✅- finally got a strong sell signal. 2.1 million in volume was my signal to test puts on the next pop up @ last close. Check out the volume, big selling going on then the next 2 green candles showed buyers slowing. Buyers slowing as you approach a reject level is what you want to see to test puts.




I also still think we get to 4700/4690✅- All out here.

Gains for the day $3.2k (includes my loss earlier) just had to be a little patient today.





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Regarding my loss earlier:

Originally Posted by Blazed

Flow is getting bearish. Gama is strong @ 4700 so it will be interesting to see what they do.

Flow is getting bearish✅- I could see bearish flow but entered too early. Right idea, wrong entry. Good example of realizing you were wrong and cutting your position instead of holding for hope.

Entered puts @ retest of last close and when we broke above 4724 and made a new HOD I cut thinking we would push up to 4730 and I'd re-enter there. We never got to 4730 so I waited.

This is why you keep losses small and let winners run.

Hope that was a good learning experience for the future.


---------------------------------------

That said, today is my last trading day this year. Kids are out of school starting next week for the holidays so its family time.

New year new things. Good time to deep dive studying charts and finding levels.

Start with the basics - support & resistance. I use the daily to find all my levels in the mornings. Understand how the market works. Don't worry about indicators or any other noise these "gurus" come up with, it's not needed and just causes confusion when you watch multiple things.

There's a years worth of stuff to read in this thread to get you started or find a good YouTube channel that teaches at your speed and practice what you watch. Don't fall for the "buy my course" or any paid mentorships, just put in the work and learn it. You'll never make it trading if you just follow signals or blindly jump into things - that goes for options or equity.

If you take any trades next week make sure they're A+ and wait for levels to hit. Don't force any trades and keep losses small. Know your entry and exit BEFORE you jump in and don't watch P&L, watch levels. If you can master your entries and exits the P&L will reflect that.

Most importantly, journal your trades. It helps see what you could do better/different next time.

I'll be back Jan 2nd to crush the market again next year.

[ajlaxmn]

Originally Posted by Blazed

Gama is strong @ 4700✅- might still hit 4700 but 4706 was close enough for me.

They wouldn't give us 4730. Kept rejecting off 4725 then chopped around last close all day. I tried puts again @ last close reject after following volume - volume told the story.








Won't worry about volume until we get a bar over 2 million.✅- finally got a strong sell signal. 2.1 million in volume was my signal to test puts on the next pop up @ last close. Check out the volume, big selling going on then the next 2 green candles showed buyers slowing. Buyers slowing as you approach a reject level is what you want to see to test puts.




I also still think we get to 4700/4690✅- All out here.

Gains for the day $3.2k (includes my loss earlier) just had to be a little patient today.





------------------------------

Regarding my loss earlier:



Flow is getting bearish✅- I could see bearish flow but entered too early. Right idea, wrong entry. Good example of realizing you were wrong and cutting your position instead of holding for hope.

Entered puts @ retest of last close and when we broke above 4724 and made a new HOD I cut thinking we would push up to 4730 and I'd re-enter there. We never got to 4730 so I waited.

This is why you keep losses small and let winners run.

Hope that was a good learning experience for the future.


---------------------------------------

That said, today is my last trading day this year. Kids are out of school starting next week for the holidays so its family time.

New year new things. Good time to deep dive studying charts and finding levels.

Start with the basics - support & resistance. I use the daily to find all my levels in the mornings. Understand how the market works. Don't worry about indicators or any other noise these "gurus" come up with, it's not needed and just causes confusion when you watch multiple things.

There's a years worth of stuff to read in this thread to get you started or find a good YouTube channel that teaches at your speed and practice what you watch. Don't fall for the "buy my course" or any paid mentorships, just put in the work and learn it. You'll never make it trading if you just follow signals or blindly jump into things - that goes for options or equity.

If you take any trades next week make sure they're A+ and wait for levels to hit. Don't force any trades and keep losses small. Know your entry and exit BEFORE you jump in and don't watch P&L, watch levels. If you can master your entries and exits the P&L will reflect that.

Most importantly, journal your trades. It helps see what you could do better/different next time.

I'll be back Jan 2nd to crush the market again next year.

Dang, same trade I was looking at, but didn't put all the pieces together. Good lesson to learn. I'll be looking at next two weeks for trades, but I will be off work all of January for vacation and to solely day trade. Can't wait.

[Blazed]

Originally Posted by ajlaxmn

Dang, same trade I was looking at, but didn't put all the pieces together. Good lesson to learn. I'll be looking at next two weeks for trades, but I will be off work all of January for vacation and to solely day trade. Can't wait.

You'll get it man. Today isn't a normal day, but that's why going through and watching how market moves on days like this is a good thing.

But in most cases volume will tell the story. You just have to wait for the strong signal which we got with that 2 mill bar.

It'll take you a cycle or 2 to fully get it. That's why I keep it simple and watch ATR's, levels (key, whole psych, top/bottom range), and volume. Those 3 things are all I need to trade SPX. The less I have to watch the better.

[Blazed]

Originally Posted by Blazed

Still holding my full LAZR position as I think a break above 3.50 is doable.

Not actively trading but my alert hit for LAZR.

I think a break above 3.50 is doable✅ - technicals played out, still holding full pos. My first trim will be @ 3.99 as that's my next resistance level.

60 Contracts went from .20 > 1.10. $1,200 > $6k so far.

Since I got a cheap fill + time (Jan 19th) on this I'm going to be a little greedy here and hold full pos for my first trim.

[Blazed]

Originally Posted by Blazed

Dumb money (retail traders) will still continue to chase up here @ highs✅- they got smoked on that drop.

Nailed it. We were way overbought and people were still buying, that's crazy.

The MM's pulled the rug and had a nice 70 point drop lol. Had I been trading I would have caught that. Volume signaled that sell off, the 1:30est time candle from what I can see on my phone.

This is why it's important to understand how the market works.

I might trade while on vacation for an hour or 2 tomorrow if we can get volatility like this off JOLTS.

[ajlaxmn]

Been in the office all week preparing for my entire month of January off, so no trading. Probably won't be trading next week as well as I will primarily be focusing on getting work completed and in a good spot for January. January will be full beans trading, outside of going to some Universal Studios a day or two, I will be trading each day as if it was my full time job.

[Blazed]

New year, new things.

PMI tomorrow and another short week.

2024 will be a record year, can't wait!

[ajlaxmn]

Originally Posted by Blazed

New year, new things.

PMI tomorrow and another short week.

2024 will be a record year, can't wait!

All month off. Vacation in there, but mostly taking all the time to practice day trading. After January I will take a day off each week, and sometimes multiple days so that I can day solely during the day.

Blaze, what would you recommend as the preferred day of the week to take off, if there is a preferred day. I would assume Tue-Thur, but wasn't sure.

[ajlaxmn]

Big sell off. Only watching ATR's. SPX/SPY/ES, as well as the rest of the market I am sure, is at three year highs. Would expect a sell off.

Watching 4700/4750 Key/4800.

[Blazed]

Originally Posted by ajlaxmn

Big sell off. Only watching ATR's. SPX/SPY/ES, as well as the rest of the market I am sure, is at three year highs. Would expect a sell off.

Watching 4700/4750 Key/4800.

Exactly this. Same thing I’m watching

Let the trades come to you, don’t force or front run or fight the trend because we could continue down.

You know how to spot signs of a reversal, so that will be on watch too.

[ajlaxmn]

Forgot, PMI at 9:45, waiting until at least then as I am sticking to my no trades in the first 15m plan. Still haven't thought if I want to wait until 30m, might go that route this week, we'll see.

[ajlaxmn]

Missed 4730 call entry. waiting for next entry.

[ajlaxmn]

Would like to see a break and retest of 4746 ATR or 4732 ATR for me to take a trade, with confirmation, to take a trade. missed the 4730 call entry that would have worked for nice 10+ point move.

[Blazed]

Originally Posted by ajlaxmn

Forgot, PMI at 9:45, waiting until at least then as I am sticking to my no trades in the first 15m plan. Still haven't thought if I want to wait until 30m, might go that route this week, we'll see.

Originally Posted by ajlaxmn

Missed 4730 call entry. waiting for next entry.

Originally Posted by ajlaxmn

Would like to see a break and retest of 4746 ATR or 4732 ATR for me to take a trade, with confirmation, to take a trade. missed the 4730 call entry that would have worked for nice 10+ point move.

Nice to see the thought processes. This is exactly what to do when watching the market while waiting on a trade.

Looks like we're in a range.

So for me to take a trade we need to break 4746 or 4732.

[ajlaxmn]

Might watch 4746 ATR for a reject. Pushing up on low volume, might have confluence with SPY ATR, SPY Upper BB lining up with SPY ATR

[ajlaxmn]

No trades for me today. I see the break above ATR for SPX and SPY confluence plus increased volume. Flow is just sideways, could possibly reject 4750 area? I have a meetup with an out of town friend who I only see once, maybe twice a year, so I'm off.

I checked for tomorrow, and in fact the market will be here. Back at it tomorrow. Blaze I'll check in with what you say in case the break above 4747 C was the play, maybe it is, just a slow grind up play.

[Blazed]

Originally Posted by ajlaxmn

No trades for me today. I see the break above ATR for SPX and SPY confluence plus increased volume. Flow is just sideways, could possibly reject 4750 area? I have a meetup with an out of town friend who I only see once, maybe twice a year, so I'm off.

I checked for tomorrow, and in fact the market will be here. Back at it tomorrow. Blaze I'll check in with what you say in case the break above 4747 C was the play, maybe it is, just a slow grind up play.

Lol, this is true. But yeah, volume too low to really get a good trade off and it's just chopping around today so the R/R isn't there.

Great job on thought process and knowing when to call it a day.

Still have jobs this week, so back at it tomorrow.

[ajlaxmn]

1/2/24 – SPX opened between 4747 ATR and 4733 ATR. SPX broke below and closed below 4734 ATR at 9:50, however the next SPX candle broke back above 4734 ATR, invalidating any puts at the 4734 ATR. Had the next SPX candle rejected the 4734 ATR that would have been an entry for Puts as the first SPY candle closed red with significant volume (5M+). SPY broke below same ATR as SPX (4734) for confluence, however only broke below momentarily. 4730 C would have been a profitable trade as SPX formed a small 15m base at 4730 with three 5m candles bouncing 4730. Profit for 4730 C would have been at 4740 as this would have been a ten point move, SPX couldn’t move past 4740 as it rejected it twice. Their wasn’t really an confirmation to take the 4730 C trade as the second SPY 15m candle closed Green and lower than the first SPY candle. The only confirmation would have been SPX oversold. 10:55 SPX 5m candle would have been a good retest entry for 4730 C as SPX tested the 4734 ATR at 10:30 and 10:35 and bounced. The 10:45 SPY 15m candle closed red and lower than the previous SPY 15m candle, which closed green. The 10:45 15m SPY candle also showed confluence with bouncing the same ATR as the SPX 10:55 ATR. The profit target for this trade would have been the 4747 ATR, which SPX moved past and rejected 4751, this would have been the trade to take. SPX 15m candle red and lower than previous candle (green), confluence of SPX and SPY bouncing same ATR.

[ajlaxmn]

JOLTs today at 10. Fed minutes at 2.

Nice little selloff this morning so only watching ATR's. Key level 4700, Bottom 4675 (Break below 4655), Top 4750. Gap at 4769.9.