Based on your trading experience:
- What screener (free or premium) do you use?
- What's the most frustrating part of finding good candidates?
- What data do you wish was easier to find?
None of this is new or novel, I'm posting this moreso for newer traders to get a feel for some of the more nuanced relationships between theoretical pricing and markets.
**The ATM curve is nothing like the textbook.**
By 21 DTE the median real ATM straddle has lost 71% of its extrinsic. The spot-pinned BSM curve (what every theta-decay illustration actually plots) says it should have lost 31%. The real curve decays at roughly **double** the textbook rate, the whole way down.
**The ranking is inverted.**
Theory says a fixed OTM strike decays *faster* than ATM. In the data, the wings **outlive** the body: at 21 DTE the 25Δ strangle still holds 57% of its extrinsic while the ATM straddle holds 29%.
Why this happens (no mystery, no "edge" claim):
What it's NOT saying: extrinsic disappearing is not seller P&L.
**Limitations:**
- Calendar-day DTE → you can see a 7-day weekend sawtooth in the curves.
- Medians of normalized paths; means are noisier but same shape.
- Two data regimes (true EOD 2007–2014, last-hourly-snapshot 2015–2026) — I split the sample by era and the shape/ranking is identical in both halves.
- Extrinsic floored at 0 (deep-ITM mids occasionally print under intrinsic).
- SPY only. Single-name behavior (earnings, harder-to-borrow) will differ.
- Deep-ITM puts near ex-div carry early-exercise richness — second order at these strikes.
Retired Man's Covered Call™ (RMCC™) is not about maximizing return on any single option trade. It’s about creating a repeatable retirement income process while preserving long-term participation in quality assets.
Primary objective: Maintain long-term ownership (or continuous exposure) to high-quality companies and ETFs.
Income objective: Generate recurring option premium.
Assignment is expected: It’s not a failure; it’s part of the strategy.
Preferred reset: Use assignment proceeds plus LEAPS appreciation to re-establish the RMCC position.
Fallback reset: If the stock has advanced too far for the LEAPS appreciation to fully finance the reset, transition temporarily to a cash-secured put (CSP).
When assigned on the CSP, rebuild the RMCC position.
In a traditional covered call, assignment ends the trade.
In RMCC, assignment initiates the reset.
there may be situations where:
-the stock gaps much higher,
-implied volatility falls,
-or the replacement LEAPS becomes significantly more expensive
RMCC Philosophy Regarding Assignment
In the RMCC strategy, assignment of the covered call is not viewed as a failure of the strategy. Instead, assignment is an expected outcome that periodically allows the investor to realize gains, recycle capital, and re-establish long-term ownership of the underlying investment. The objective is not to preserve a particular group of shares, but to maintain continuous long-term exposure while generating recurring option income.
RMCC Scenario #1
Stock Ticker - NVDA
In this Scenario NVDA blows past the Strike Price -
Setup:
Note that the values here are meant to be an illustrative example:
You Currently Own 100, or more, shares of NVDA value $195/share.
Purchase NVDA Long Call (LEAPS) Exp 6/16/2028 (23 months from today) Strike Price $160 -Delta .75, Premium Price $7000
Then Sell an NVDA Covered Call at Strike Price $210, exp 28 day , delta 0.26, Premium received $310
When the NVDA share price blows past the CC Strike, the shares get called away and $21000 is received.
If the new share price for NVDA is $220 at that time it will cost $22000 to get them back. But what has happened with the LEAPS?
Because you hold a LEAPS contract that was at delta of 0.75 when purchased, the value of that LEAPS has risen and so has the delta. The delta should be ~0.80.
Initial delta = 0.75
Ending delta ≈ 0.80
Average effective delta ≈ 0.775
In practice, delta changes continuously as the underlying stock price changes, so the actual LEAPS value will also be affected by gamma, implied volatility, remaining time to expiration, and other option pricing factors.
Rounding that to 0.78 is a reasonable approximation for an illustrative example.
Item Amount
LEAPS ~ +$1,950
additional cash required to repurchase 100 shares. $1,000
Covered call premium. $310
Cost of rolling LEAPS $260
Estimated net gain. $1,000
LEAPS Value and other stated gains are for this illustrative estimate: LEAPS Value approximately $8,950. ~ $7000+ [0.78 * $220-$195) $8950.
So repurchasing 100 Shares of NVDA will cost you $1000 more than you received from assignment, but your LEAPS value has increased $1950. You are ahead $950 there, plus the $310 received for the Short Call. $1260 gain in 4 weeks. After the stock price advances, the LEAPS delta has also increased above the original target. Selling the appreciated LEAPS Contract and purchasing a replacement LEAPS with approximately 0.75 delta restores the strategy to its original. You are Rolling the LEAPS Contract. The roll will consume an additional $200 or a little more, let’s say $260. Estimated net gain (in an IRA or Roth Account) is +$1000.
In a traditional covered call, assignment ends the trade.
In RMCC, assignment initiates the reset.
There may be situations where:
-the stock gaps much higher,
-implied volatility falls,
-the replacement LEAPS becomes significantly more expensive
If the Stock price gaps up enough or the LEAPS price increases significantly, due to volatility, the gain in LEAPS value may not fully support repurchasing the shares in this cycle. This is where the strategy naturally transitions into a CSP phase until the economics favors re-entry, collecting CSP Premiums during this part of the cycle.
had another one yesterday. took a real loss on a spread, fine whatever thats trading, but then instead of closing everything out i bought more contracts trying to get back to even before close. ended up losing double what the original loss was in like 10 min
i have a max loss rule. doesnt matter once im already tilted, i just tell myself this one's different. is there an actual fix for this or nah
I am trading Broken butterflies for more than a year. I am doing great using SPX. I am using a strategy to collect premium and Theta. This trade does better when it is opened under high IV, as it is Vega negative. I would like to learn a bit more about other ways to trade this spread. Does anyone trades this setup? How do you trade it in terms of DTE, BWB Short Strike Delta, etc.
I got tired of re-deriving the same things whether Black–Scholes is safe on an American option with dividends, why feeding realized vol into a pricer gives garbage, how much a stale mid-quote quietly wrecks a backtest. So I wrote it all down in one place, and figured this sub would get use out of it too.
It's here, free, no signup to read: https://learner.tradoing.com/read
Every entry has four fixed lines:
The options section covers calls/puts, moneyness, intrinsic vs time value, put–call parity, the full Greeks (delta through the second-order vanna/charm/vomma), IV, skew, and Black–Scholes. There's full-text search over the whole thing, and it goes beyond options too (futures, fundamentals, macro, crypto/perps, a quant section) if that's useful.
There's a flashcard mode on the home page https://learner.tradoing.com if you learn by doing, but the reference is the real substance and it's completely open.
I'm one person and I've surely gotten something wrong in here somewhere. If you spot an error or a missing gotcha, tell me. I'd much rather have it corrected than leave someone with a subtle bug in their P&L. Hope it saves someone an afternoon of debugging.
I'm extremely bearish on SpaceX due to its horrible fundamentals, media coverage, and my belief that holders of locked-up stock options will sell once their shares unlock. I plan to buy puts and short SpcveX at a weighting of about 2% of the Nasdaq, since that's roughly its share of the index's market capitalization, so it should hedge it out.
First and foremost, I do not recommend trading 0dte! If you have enemies, convince them to trade 0dte’s and enjoy their downfall. With that said, I’m looking for advice from some experienced traders.
I don’t normally trade 0dte’s and do have a successful wheeling portfolio, but still a beginner. I was toying around with 0dte’s and went on a good run. I noticed that my sizing increased at times and this was magnified due to impatience. There are alot of emotions to deal with once you open this door. Any suggestion on ground rules to keep myself in check? Thanks!
Hi everyone,
Not sure if this has already been noticed, but I think there's a labeling error in Sheldon Natenberg's Option Volatility and Pricing (2nd edition) on page 138, Figure 9-3.
The figure is titled "Put delta values as volatility changes," and the surrounding text discusses put deltas exclusively (tending toward 0 and −100 as volatility falls, and toward −50 as it rises). But two of the three curves in the figure are labeled "In-the-money call" and "At-the-money call" instead of "put."
For comparison, Figures 9-1 and 9-2 (pages 136–137) correctly deal with calls and are labeled accordingly, and Figure 9-4 (put deltas as time passes) correctly uses "put" labels. So it looks like Figure 9-3 was probably copied from the call version (Figure 9-1), just mirrored across the x-axis to the 0 to −100 range, and the "call" labels were never updated to "put."
To be clear, the curves themselves are correct — the magnitudes behave identically to calls, just with a negative sign — so it's purely a labeling slip, not a conceptual error.
Just wanted to flag it in case others are working through the book and get confused.
Has anyone else caught thisPossible error in Natenberg's "Option Volatility and Pricing" (2nd ed., p. 138, Figure 9-3)?
Thanks!
DXYZ and RVI got listed options last month. VCX have had them for longer. These tickers have overlapping baskets of holdings. I have mentioned the spot side of things here with some significant traded price to NAV dislocations. We can also look at how the options IV side of things look. These funds have to report their updated asset valuation marks and NAV per share quarterly within 60 days. That date is August 29th for Q2 and is the closest equivalent of an earnings report for a company. So keep that date in mind to consider any event vol pricing in the term structure. The following table lists the IV at the close on Thursday. These tickers are worth looking at to structure some options plays. Everyone will probably have their own ideas around them. Have fun!
| ATM IV | July 17 | Aug 21 | Oct 16 | Jan 15 | Notes |
|---|---|---|---|---|---|
| DXYZ | 84 | 93 | 92 | 93 | Potentially undervalued w.r.t. projected NAV, most liquid options of all, easy to short |
| VCX | 111 | 105 | 125 | 133 | Illiquid, wide options spreads, few shortable shares, high CTB, 85% float unlocks on Sep 15 |
| RVI | 97 | 94 | 99 | 98 | Wide options spreads, high CTB |
I got off the phone with someone from support and they were saying if the long maintenance ratio is 25% I would get 4x that in margin. Is that accurate?
Do you guys know of any clever ways to short gamma without having to sell options?
If I have a cash account with $10K (just an easy example amount) and I daytrade options spreads (e.g. verticals), how does each such trade affect the buying power?
For example, buy XYZ vertical for $100, then sell the same vertical for $110. Both transactions are not settled until tomorrow - that part I know. But what happens to the buying power?
Does it get reduced by the initial $100 debit?
Or, does it get reduced by the cost of the long leg (e.g. $500)?
I recently retired. I have been using PMCC strategies to earn premium and LEAPS profits. But you need to be very conservative with the Short Calls. I have developed a strategy that allows you to sell Covered Calls at deltas of 0.24 - 0.28 and earn much nicer premiums.
If you buy a LEAPS contract deep ITM, approximately 0.75 delta and you also own 100 shares of a high quality company’s stock or Index ETF that you want to own long term you can use higher deltas. If your short call gets assigned your LEAPS will be significantly profitable and ~ 0.80 delta. Roll the LEAPS back to 0.75 and repurchase the shares and repeat the process. Retired Man’s Covered Call™ (RMCC™)
Hi everyone,
I mainly trade 0DTE options on the U.S. market and currently use MooMoo and IBKR. However, commissions and platform fees have become a major issue for me. I usually trade 1–5 contracts per order, and the total cost (commissions, platform fees, exchange fees, and other charges) comes to around $5 or more per round trip, even when I'm trading just one contract on MooMoo. That feels pretty expensive for scalping, especially when my typical profit target is only $0.10–0.20 per contract.
So, I'm looking for a broker with lower fees and came across Firstrade. Their pricing looks very attractive ($0 commission, no options contract fees, and no platform fees), but I haven't found many recent reviews from active options traders.
Since I'm not a U.S. resident, I can't use some of the more popular brokers like Robinhood or Webull, those unfortunately aren't an option for me.
Does anyone here have experience with Firstrade?
Are they reliable and safe?
How is their order execution quality?
Last but not least, how fast is their options order execution? (or How fast are market order fills for options?)
I mainly trade 0DTE and occasionally swing options, so fast and consistent execution is much more important to me than having advanced charting tools, I have tradingview and other apps for these analysis.
I'd really appreciate hearing from anyone who has experience for Firstrade. Thanks!
So far this week, I’ve been right about the direction of every trade I placed. The problem is that when I place the trade, the market decides to consolidate. For at least an hour. Leaving my options to decrease overtime. By the time it hits my take profit, I’ve barely scraped over break even. Is there something that I’m not understanding? Any help would be appreciated.
Hello,
I'm looking for a data provider for NDX tick level historical option data. Any recommandations?
Hey All
This is my first post here in this community which I discovered in distress.
Background : I have around a 1M dollars in Meta equity with roughly 1600 shares. I started making covered calls recently with the whole intention of being safe. Today's Meta stock gains completely screwed me over .
I am currently underwater on all of these options and I absolutely don't want to sell my equity at the current price as I know that there is a lot of upside to Meta still remaining in the months to come . Plus I will be incurring more than 100K in taxes alone if these get called away .
I already lost 10K today rolling these calls to what you see in the screenshot below. And just bought some time to think through how to manage this. The only good option I can think of is roll these further to a strike price that I desire for a much longer duration.
I wouldn't mind paying another 5-6K to get out of this mess and protect my equity. I am completely blanked out . Please suggest what I can do in this situation .
People who are scalping ODTE SPX, what is the strategy that works most for you
I was looking at the weekly options on MSTY on Fidelity and saw two different options expiring on the same day with the only difference being ADJ written next to one of them. The bids and asks of this one for a lot of the strike prices are extremely high compared to the share price, some of the closer strikes almost matching it. At first glance, this seems like a golden opportunity, but it seems way too good to be true. Just asking anyone if they know what the catch is and if this happens often-ish?
