Options Playbook Radio

Lately, we have been discussing inverse skip-strike butterflies. Today, we are discussing times when it is a good idea to use inverse skip strike butterflies. Today, Brian discusses: What will the Fed do? (They kept rates steady) Setting up an inverse skip strike butterfly on the bearish side of the S&P 500 What will it cost? What do you want to happen? What is the risk? Don’t forget about margin What is the best-case scenario? What is the maximum reward? And more

Today we are continuing the discussion of Inverse Skip-Strike Butterflies, which began last week. If you are following along at home with the hardcover version of the book, you can find the information you need on page 112 (calls) and page 115 (puts). Today, Brian discusses: A real-world example using NFLX You can find the discussion on NFLX here Where is the 30-day IV in NFLX? Why is the 30-day IV where it is? What about the market as a whole? Setting up the position What do we need to happen in NFLX? What is the risk? Reward? Considerations and caveats And more

In this episode, we are discussing an inverse skip-strike butterfly, which you can find on pages 112 (calls) and 115 (puts) of The Options Playbook. You can also find all of this information on OptionsPlaybook.com. Today Brian discusses: The set-up of an inverse skip-strike butterfly What do we want to happen? How much will it cost? What is the maximum risk? What is the maximum gain? When does this make sense?

You can review volatility on page 14 of the Options Playbook. You can also find it online at OptionsPlaybook.com in the “basics” section. Today, Brian discusses: A review of looking at stocks near earnings, which creates volatility What happens when the entire market is volatile? How do you adjust your trading as a result of volatile markets? Buying options Spreading options Butterflies

In this episode, Brian takes on listener questions about: Profit and loss calculators Remember: slippage, commissions, and other variables Calendar spreads And more

In this episode, we are going to look at how to insure a long USO position using backspreads with puts. If you have the hardcover version of the book, you can follow along on page 87. If you want to follow along online, you can do so at OptionsPlaybook.com. In this episode, Brian discusses: How the price of oil is reflected in USO Where are things priced now? How to ensure a USO stock position How to tie backspreads to a stock position This is AKA a pay-later put How to set it up What are we hoping will happen? Potential gains and losses Caveats and considerations

In this episode Brian is discussing the fig leaf strategy for the oil sector. For those of you with the hardcover version of the book, this can be found on page 56. If you are following along online, it is always at OptionsPlaybook.com. Today Brian discusses: A review of the fig leaf strategy Setting up an USO fig leaf Using options to create a larger position instead of “double up to catch up” Constructing the fig leaf What will it cost? What is the risk?

Today, we are still discussing Christmas Tree Butterflies. For those of you with the hardcover version of the Options Playbook, you can find this on page 118. If you are following along online, it is all at OptionsPlaybook.com. Today, Brian discusses: Why are we talking about Christmas Tree Butterflies around earnings? Using a real-world example with FB The normal Christmas Tree Butterfly pattern Customizing the Christmas Tree Butterfly to minimize risk Maximum risk, maximum reward What is the forecast on the underlying?

In this episode, we are continuing our coverage of Christmas Tree Butterflies. For those of you with the hardcover version of the book, this is on pages 118 (calls) and 120 (puts). If you are following along online, you can find everything you need on OptionsPlaybook.com. Today Brian discusses: Back to earnings season equals good scenarios for butterflies Why? Creating a paper trade with Amazon, using puts Setting up the trade What strikes we are using What will this cost? Where do you want the stock to go? Having realistic expectations What is the upside? And more

In this episode, we are looking at the Christmas Tree Butterfly. If you are following along with the hard cover version of the book, it is on page 118 (calls) and page 120 (puts). If you are online, this information is always available on OptionsPlaybook.com. Today Brian discusses: What is a Christmas Tree Butterfly? Setting it up How does a Christmas Tree Butterfly differ from a standard butterfly? Where is the sweet spot? Why do a Christmas Tree Butterfly instead of a standard butterfly? And more...

In this episode, we are reviewing some of the paper trades discussed in the past few Iron Condor episodes. If you are following along with the hardcover book, we are on page 126. You can always find this on OptionsPlaybook.com. Today, Brian discusses: What was going on when we put on a short SPX paper trade last week? A review of the set up and the cost What do things look like now? Are we up? Down? What about time decay? What about the VIX? Should we roll? Going back two weeks, reviewing the AAPL condor. Moving forward with an AAPL roll Adjust when you can, do not wait What will it cost to roll? How to set it up?

In this episode, we are continuing our coverage of Iron Condors. If you have the hardcover version of the book, this is available on page 126. If you are following along online, you can always find this on OptionsPlaybook.com. Today Brian discusses: A review from the previous episodes, including what happened in AAPL since last time What do to now that AAPL has moved close to the bottom strike? Setting up a short-term iron condor using an index Beware of the holiday and volatility Setting it all up Things to consider

This week we are continuing our discussion of iron condors. For those of you playing the home game, you can find this information on page 126. If you're following along online, all of this information is always at OptionsPlaybook.com. Today Brian discusses: A review of last time, which discussed indexes Looking at an iron condor on AAPL, going out 23 days What about earnings? Dividends? Quick and dirty formula for probability How does the math play out? Brian assembles an iron condor on AAPL What's the maximum risk? Reward? Getting out before expiration Caveats And more

In this episode, Brian is talking about iron condors. If you have the hardcover version of the Options Playbook, you can find this information on page 126. If you are following along online, all of this information is always available at OptionsPlaybook.com. Today, Brian discusses: How iron condors differ from regular condors Looking at iron condors with index options Why iron condors work well with index options Looking at an example with the S&P 500 Index

In this episode, we are discussing iron condors. For those of you with the hardcover version of the book, you can find this information on page 126. If you want to follow along online, it is all on OptionsPlaybook.com. Today Brian discusses: The set-up of an iron condor Why is it called a condor? What is an iron condor? What is the next risk? What is the potential reward? When to get out? What do you want to happen?

Over the last few weeks, we have been talking about butterflies, and last week, we covered inverse skip strike butterfly. This week, we are hitting that, but with calls. You can find this on page 112 of The Options Playbook, or look for it on OptionsPlaybook.com Today Brian discusses: A review of last time, which was centered on DECK earnings Looking at an inverse skip strike butterflies with calls What is the outlook? What is the expected move? What is the risk? Reward?

In this episode, we're discussing the inverse of skip strike butterflies. This can be found on pages 112 and 115 of the hardback version of the book, or you can always go to OptionsPlaybook.com. Today, Brian discusses: When you would want to use an inverse skip strike butterfly A live example using Deckers Outdoor What might happen to the underlying, and how to structure a position around it? What is the risk? What is the reward potential? And more

Options Playbook Radio 61: The Golden Rule In this episode, we are taking on more listener questions, including: In- versus out-of-the-money golden rules The top 10 mistakes made by options traders Ways to offset decay Getting what you pay for Volatility Moneyness and time value

Options Playbook Radio 60: Listener Question Palooza In this episode, Brian and Mark take on listener questions as they attend the Options Industry Conference. They take on topics including: Skip strike butterflies around AAPL earnings Regular butterflies versus iron butterflies Has expiration Friday changed in significance in recent years? What about triple and quadrupole witching? The idea of daily expiration options When is Rho a factor? Why is rolling a position so prominent?

Options Playbook Radio 59: Skip Strike Butterflies, Continued In this episode, Brian continues his discussion of Skip Strike Butterflies. If you have the hard copy version of The Options Playbook, turn to page 108 for calls, or page 110 for puts. Today, Brian discusses: A review of last episode A real-world example using Priceline, which posts earnings on 5/7 before the open Let’s look at the ATM straddle for the options expiring on 5/8. What has happened previously to Priceline around earnings? What to do about that? What is the upside? What is the downside?

Options Playbook Radio 58: Back to Butterflies In this episode, we’re discussing skip strike, or modified/broken wing butterflies. If you’re playing the home game, you can find this information on page 108 (skip strike butterflies with calls) or page 110 (skip strike butterflies with puts). Additionally, it’s always available on OptionsPlaybook.com. Today, Brian discusses: Understanding butterflies first How a skip strike butterfly is different than a regular butterfly Risk trade-offs versus a standard butterfly Benefit: doing it for a credit Why you want to be directional in your forecast And more…

Options Playbook Radio 57: Trading Diagonal Call Spreads around Earnings In this episode, Brian discusses trading around earnings, specifically using diagonal call spreads. You can find details on this at: tradeking.com/allstars Brian discusses: An example using Gilead Sell a call before earnings, buy a call after earnings Why is this called a diagonal? What is the maximum risk? Things to consider And more…

Options Playbook 56: Butterflies Around Earnings It is earnings season, and Brian discusses multiple butterfly strategies you can use around this time of season.

Options Playbook Radio 55: Huddle Up for Listener Questions. Today, we’re covering listener questions. Brian and Mark discuss: · Which OTM call strike performs best when the underlying rallies? · This covers: · Timing · Volatility · Volatility skew · Alternatives · And more…

Options Playbook Radio 54: Butterfly Spreads, continued In this episode we are continuing our coverage of butterfly spreads. For those of you with the hardcover book, you can find this information on pages 103 and 104. You can also follow along on OptionsPlaybook.com. Today, Brian discusses: Two real strategies: a butterfly around IBM earnings, and a SPX Let’s look at what is happening with IBM IBM going into earnings Butterfly using IBM weekly options Focusing on the midpoint Maximum risk, maximum upside Remember not to go for a home run What might happen after earnings? Why do you want implied volatilities to decrease? Doing butterflies on indexes, using puts Maximum risk, maximum upside Differences between weekly options and standard options to keep in mind Adjusting your legs Don’t forget that index options are cash-settled, and have 60/40 tax treatment

Options Playbook Radio 53: Butterfly Spreads Today in Options Playbook Radio, we’re discussing butterfly spreads. For those of you with the hardcover version of the book, this can be found on pages 103 and 104. You can always find it on OptionsPlaybook.com as well. Today, Brian discusses: What do we mean by legs? How are butterfly spreads entered as a trade? Looking at an example using XYZ calls Where do you start? What is the net debit? What is the max risk? What is the max gain? What is the break-even? Look at this as two spreads And more…

Options Playbook Radio 52: Front Spreads, Part Two In this episode, we’re covering front spreads. For those of you with the hardcover book, that information can be found on page 80 (calls) or page 82 (puts). You can also find everything on OptionsPlaybook.com. Today, Brian discusses: A review from last week, what is a front spread, what about risk, etc. Why do this instead of a cash-secured put? Let’s look at this using AAPL as an example Comparing a covered call and front spread What price does the underlying need to hit to get a benefit? Ways in which the front spread works better The tradeoffs between a covered call and front spread When does a front spread make more sense? Now again with puts

Options Playbook Radio 51: Front Spreads In this episode, we’re talking about the front spread. In the book, this is on page 80 (calls) and page 82 (puts). Or, just find it on OptionsPlaybook.com. In this episode, Brian discusses: What is a front spread? What about unlimited risk? What is the goal of this spread? Maximum risk, maximum gain, and breakeven How to do a front spread combined with stock And more…

Options Playbook Radio 50: Listener Takeover Today, Brian and Mark huddle up to discuss: What is time premium? Why does it exist? Why can’t you trade an option for its intrinsic value? Are there any tips to help a new trader process so much options-related information?

Options Playbook Radio 49: Long Calendar Spreads into Earnings In this episode, we are covering trading around earnings. For those of you with the hardcover book, you can find this on page 94. If you’re following along online, you can find it on OptionsPlaybook.com. Today, Brian and Mark discuss: If you put on a long calendar spread, what do you want to happen to volatility after the trade is put on? Good places to review are episodes 36 and 37 At look at LULU pre-earnings Setting up a LULU calendar spread What do you want to happen? What is a realistic profit outlook?

Options Playbook Radio 48: Theta, Revisited In this episode, Mark and Brian are back and taking on your questions. In this episode, they discuss: Theta data When decay flattens out Riding the road of premium decay What is the optimal ratio of theta versus gamma? And more…

Options Playbook Radio 47: When to Roll Protective Puts Today, Mark and Brian answer listener questions, including: When to roll protective puts? What to pay? How far out should you look? And more…

Options Playbook Radio 46: Paper Trade for ABX Earnings In this episode, we are covering a specific paper trade strategy around an earnings report. It will be a long calendar spread with calls, which is on page 90. You can also find it on OptionsPlaybook.com. You can also learn about long calendar spreads in Options Playbook Radio episode 37. Today, Brian discusses: The forecast based on the chart The chains for selecting the paper trade Volatility of ABX 52-week history of ABX, and dividend Selecting the right options, and don’t forget weekly options What to keep in mind when trading around earnings Looking at various scenarios And more

Options Playbook Radio 45: Combinations, continued. Continuing from last week, we are still discussing combinations. This information can be found on pages 76 and 78 of the hardcover book, or on OptionsPlaybook.com. Today, Brian discusses: Clarification on combinations using a real example: AAPL Long combination, instead of outright stock purchase Looking out to January 2016 Rights and obligations How the combination works and its financial impact Don’t forget about margin! How does it work? Who does it work for? What about doing this in an IRA Account? Let’s do the math What about dividends? Let’s take a look at GOOG. Advantages/disadvantages

Options Playbook Radio 44: Combinations Welcome back to Options Playbook Radio, where today we’re discussion combinations, or combos. If you have the book, we’re on page 76 (long) or 78 (short). For those of you following along online, you can find it on OptionsPlaybook.com Today Brian discusses: Before we get to combos, let’s first discuss synthetic relationships What are synthetic positions? Why create them? How to create them? What do the pros do?

Options Playbook Radio 43: Listener Question Palooza, Continued The Huddle: Question from Anthony Enyo - Thank you for this wonderful program Brian. I am certainly learning a great deal. I have a few questions about dividends and options. I’ve heard there are some telltale signs in the options that reveal that a dividend is approaching. Is this true and if so what are they? Question from Joseph G - ‏@Options Gamma? Are them those rays that turned Dr. Bruce Banner into the Hulk? lol...Seriously - can you sum up what I need to be concerned about with gamma when selling weekly put options? Mostly OTM with 4-7 days to expiration.

Options Playbook Radio 42: Listener Questions Edition The Huddle: Listener questions and comments Question from Brian Collamer - Hi Brian! In this show you were describing selling OTM options. You mentioned that when selling options the fastest theta decay occurs in the 45-30 day range. I thought that was only true for ATM options? Do OTM options not decay the fastest at 60-70 days and then kind of flatten out?? Great show, wish it was longer! Thanks, Brian Question Mukund Ambarge: Hi! I had question on theta decay. I understand that delta is in constant flux with every tick move in stock, the delta/gamma changes. IV is in constant flux with buying and selling of options and volume etc. So vega changes with option transactions. But theta decay is the only one which is always in a steady pace i.e. it’s not like it will decay quickly today and slowly tomorrow. The question is when is the theta decay really adjusted in the prices of options. Do the theta decay get adjusted at every tick move? Or every hour? If it is adjusted daily. Then when is the theta decay taken out of options. Early morning before start of trading? Or late in the day like last few minutes that whole days theta is taken out? Also I do not know when is weekend theta taken out of prices? Friday early morning or Friday ending or middle of the day? Basically when does market maker run the prices with the model and set the prices? Only once before trading starts or does he keep adjusting every minute/hour/tick based on demand/supply? Thanks, Mukund

Options Playbook Radio 41: Back to Backspreads In this episode, we cover backspreads. If you’re playing along at home with the hardcover book, this means we’re on pages 84 (calls) and 87 (puts). If you’re following along online, you can find all of this at OptionsPlaybook.com. Today Brian discusses: A review from last time Looking at an example with Chevron What do we need to happen? What is the risk? What to look for between backspreads and straddles? Why do a backspread? And more…

Options Playbook Radio 40: Backspreads In this episode, we’re covering Backspreads. For those of you with the hardcover version of the Options Playbook, you can find this on page 84 (calls) and page 87 (puts). It’s also online at OptionsPlaybook.com. Today, Brian discusses: What are backspreads? An example using calls An example using puts Other names for a backspread Factors that matter, including time When to use backspreads And more…

Options Playbook Radio 39: Diagonal Spreads, Continued This week’s edition of Options Playbook Radio is continuing our coverage of diagonal spreads. For those of you with the hardcover version of the book, we’re on page 96 (calls) and page 99 (puts). If you’re following along online, you can find what you need at OptionsPlaybook.com. Today Brian covers: Review from last week Tesla example, and why a diagonal spread works for this example Paying attention to delta What to watch for and when to get out of the trade

Options Playbook Radio 38: Diagonal Spreads In this week’s edition of Option Playbook Radio, we’re covering diagonal spreads. You can find this on page 96 (call) and page 99 (put) of the hardback version, or at OptionsPlaybook.com. Today, Brian discusses: Calendar/horizontal spreads, and when you would use them What is a diagonal spread? Why is it called a diagonal spread? The history of some of the spread nomenclature Possible outcomes of diagonal spreads And more…

Options Playbook Radio 37: Long Calendar Spreads, Continued In this episode of Options Playbook Radio, we’re continuing our discussion of long calendar spreads. For those of you with the hardcover version of the book, this is on page 90 (calls) or page 93 (puts). You can also find it on OptionsPlaybook.com. Today, Brian discusses: A review from last week’s introduction Using an example of FB around earnings What makes earnings season special for calendar spreads Why direction matters How earnings impact implied volatility Implementing a calendar after a major event Using indexes instead of stocks And more

Options Playbook Radio 36: Long Calendar Spreads In this episode, we’re talking about long calendar spreads, from the call side. If you have the Playbook, we’re on page 90. Or, you can find what we’re discussing on OptionsPlaybook.com. Today, Brian discusses: What is a calendar spread? Looking at accelerated time decay, and why does it happen? At-the-money strikes, and why they are used in calendar spreads Front and back month How to construct a calendar spread Why do a calendar spread? Time decay review, and how it impacts the value of your option Maximum profit and loss Time value review, and what happens when it goes away? And more…

Options Playbook Radio 35: Straddles and Strangles, Continued. Options Playbook Radio is back and today we are on pages 68 and 70. For those of you playing along online, you can find these topics at OptionsPlaybook.com. Today Brian discusses: What does the math say about Facebook earnings Looking at the FB straddle Why do investors use it? How do weekly options impact it? Quick and dirty formula on p. 17 of the book What are volatility and probability telling us with the math? Using a real-life example with FB Real world versus what is “supposed” to happen And more…

Options Playbook Radio 34: Buying Straddles & Strangles Welcome back to Options Playbook Radio. For those of you with the book, today we are on pages 48 and 52. You can also find this information on OptionsPlaybook.com. Today Brian discusses: A quick review of long spreads, including risk/reward A quick homework assignment: review sessions 4 and 5 A generic example of a long straddle A generic example of a long strangle What does the math say 70% of the time? And more

Options Playbook 33: Selling Spreads, Continued For those of you playing the home game, today we are on pages 64 and66 . If you are following along online, you can access everything you need at OptionsPlaybook.com. Today Brian discusses: Overview of last week on timing and probability when selling spreads If you need a volatility review, please refer to episode 4 Real-life example using AAPL Impact of timeframes Premium relative to probability of success (and what is success?) And more...

Options Playbook Radio 32: Selling Spreads Welcome back to Options Playbook Radio! For those of you with the hardcover book, today we’re on pages 64 (short call spread) and 66 (short put spread). Or, you can find information on our discussion on OptionsPlaybook.com Today Brian discusses: They’re also known as bear call or bear put spreads Using out-of-the-money options Examples using calls What is the maximum profit? What is the maximum risk? Probability of success Don’t forget about commissions Timeframe implications And more

Options Playbook Radio 31: Buying Spreads, Continued For those of you with the book, today we’re on page 60. If you want to follow along online, please visit OptionsPlaybook.com. http://www.optionsplaybook.com/, Today Brian discusses: How spread trading differs from single options trading Avoiding paying premium to close out a position A real world example using Intel How do earnings impact options prices? Time value and how you pay for it And more…

Options Playbook Radio 30: Long Spreads For those of you with a copy of the Playbook, we’re on page 60. If you are following along on OptionsPlaybook.com, look for the Long Call/Put section. Today, Brian discusses: What does it mean to have a “long” spread? Bull call spread, bear put spread. Vertical spreads What does it all mean? Crafting a P/L graph without owning the stock Risks and rewards are limited and known Common misunderstandings

Options Playbook Radio 29: Collar Strategy We’re on page 54 of the hardback version of the Playbook, or find it on OptionsPlaybook.com Today, Brian discusses: How collars go hand-in-hand with protective puts Timeframes, and their importance What is a collar? How does it work? What’s the cost? What’s the upside? How far out in time should you go? The impact of interest rates and dividends And more