Submitted by moonyou22 t3_11dfyy3 in wallstreetbets
Comments
VisualMod t1_ja8c6sk wrote
Thetagang is engaging in what is known as a "pump and dump" scheme. This is where he artificially inflates the price of a security, then sells it off at a profit. While this may be profitable for him in the short term, it ultimately harms investors and drives down prices overall.
yweh t1_ja8fwhb wrote
Haha. This isn't true...but I do have some covered calls to sell you. They'll probably print for you and you can live the life you've always wanted. Surely, I am only selling these options out of the goodness of my heart*.
*This satirical comment is not financial advice.
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vegasoptions666 t1_ja8g5f3 wrote
Defective bot.
[deleted] t1_ja8lfwj wrote
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polarbearbreeze t1_ja93e57 wrote
anyone else too stupid to understand what this theta gang thing is about, and is too scared to ask about it
cromwest t1_ja947rg wrote
During the gold rush people who sold shovels made bank.
Oxofrmbl99 t1_ja9aa9f wrote
Then then
TetraMental t1_ja9ab0m wrote
theta gang are people who look around at the people gambling on options here and realize that for every sucker buying a contract, somebody with some shares is on the other side selling them the contract.
one_excited_guy t1_ja9b0aa wrote
if that pic is not what theta gang is about, then what is it about?
marlwenplotsky t1_ja9dkd4 wrote
magic bean salesmen, except sometimes the magic beans actually work and you can go bankrupt because of it.
Drivesabrowntruck t1_ja9figz wrote
I like to think of myself as providing a service, much like a title loan office would.
technoexplorer t1_ja9fyb1 wrote
Wait, no, if a stock is exposed to a pump & dump, doesn't that give a predictible outcome that the thetagang could exploit? They know it's going to go up on a certain timescale based on pump.
suasposnte187 t1_ja9ikfj wrote
> except sometimes the magic beans actually work and you can go bankrupt because of it
suasposnte187 t1_ja9j78i wrote
If options immediately devalued, then I would sell then buy back immediately 50,000 contracts a day from my yacht.
Fact is, yes...theta devalues short options, but the buyer has gamma in their favor , that can blow you out of the water real quick with short dated options.
Platypus_Legion t1_ja9kmzn wrote
It also works for puts, and you just need cash for that.
RollTheDiceFollowYou t1_ja9ky8k wrote
I am waiting for the day someone screws me by executing an early exercise of the covered calls I sell.
suasposnte187 t1_ja9lhz9 wrote
They are not screwing you, they are giving you the full value of the option before the option has expired.
[deleted] t1_ja9ljhd wrote
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Drivesabrowntruck t1_ja9m584 wrote
You must of missed when $F announced the DIV. Lotta guys got exercised early for ex-div
Youngerdiogenes t1_ja9m6n6 wrote
Thetagang is overrated and most people lose money on it because they lack discipline.
If you’re interested, you can check out /r/thetagang or just research “covered calls” and “selling cash secured puts” on youtube. Plenty of good material out there to learn the basics.
Let me know if you need help, I’ve been around buying and selling options for years and might be able to answer your questions. Or at the very least point you in the right direction.
Drivesabrowntruck t1_ja9m7ot wrote
I’d love if someone would exercise early, free money.
[deleted] t1_ja9m8e3 wrote
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Drivesabrowntruck t1_ja9mv04 wrote
I think that has a lot to do with what options you’re selling. I do low IV, low Delta options, high volume on stuff I don’t mind owning. I think where many Theta gang guys go wrong is chasing theta, without looking at the underlying.
Sunnyhappygal t1_ja9ojd4 wrote
It's really simple. If you think the market is going to go up, buy some shares. If it goes up a bit, sell some calls off those shares. If it goes WAY up, buy some puts.
If you think the market is going to go down a bit, sell some puts. If it keeps going down, sell some calls off the shares you were assigned. If it goes WAY down, buy some calls.
Surefire recipe to sometimes make money and sometimes lose money.
arpatel530 t1_ja9ol2z wrote
First rule about theta gang is we don't talk about theta gang
BoofingFluoride t1_ja9op76 wrote
And then with enough time they realize that they're still the suckers crossing the bid-ask spread.
suasposnte187 t1_ja9p4mu wrote
Youngerdiogenes t1_ja9poqx wrote
Thats’s 80% true in my opinion. The other 20% is the lack of discipline. Even when selling safe covered calls on reliable stocks, the newer guys will sell a call on a stock, not realize it’s earnings week. And when the stock blasts past their strike, they suddenly rather keep the stock and buy their contract back for a loss.
Zero game plan and no discipline makes for a bad options salesmen.
Drivesabrowntruck t1_ja9pzte wrote
So so true, $DIS was a prime example of this. Had 105 Feb monthlies, thing goes to $123 AH earnings day, nothing but a stone afterwards. It actually finished ITM on OE, stock didn’t get called away. One of the few times I’ve had them finish ITM and not get exercised.
ShankThatSnitch t1_ja9slvq wrote
Theta gang are the ones getting rich off all the loss porn you see posted. Every yolo that has gone to zero, is money in theta gangs pockets
CheeseSteak17 t1_ja9vjoh wrote
The stock also dropped by the dividend value that day, so it was net neutral. The special dividend was accounted for in option strikes. As a seller of both puts and calls that week, it was pretty meh.
Big-Industry4237 t1_ja9xlk5 wrote
Buying calls and puts - are lotto tickets.
Selling calls and puts, is theta gang, thus, at the casino, you are selling lotto tickets.
Kenobi3371 t1_ja9xlus wrote
If you're not on Robinhood you can do covered puts too
Bxdwfl t1_jaa0eat wrote
exactly. posts like this are why i think most of this sub has no clue how options work. it's not like selling them is some cheat code for free money.
Necessary-Onion-7494 t1_jaa0knz wrote
Yeah, if you sell naked options on a stock that goes parabolic then you are screwed. However, only idiots sell naked options.
Drivesabrowntruck t1_jaa1zcs wrote
The special dividend wasn’t accounted for, before those options were written, so Theta was already priced in. Short sellers have to pay the DIV on shares shorted, so they took a hit on the strike price they borrowed at, if not hedged
CheeseSteak17 t1_jaa42i5 wrote
All options had the strike lowered by 0.65, which accounts for the special dividend.
DeadStringScrolls t1_jaa78e5 wrote
problem? :)
on_duh_pooper t1_jaa8a7c wrote
Did anyone else hear Butters selling NFTs while reading this?
Thraximundaur t1_jaa8by5 wrote
tell me more
whats the maximum investment
marlwenplotsky t1_jaa8kki wrote
allow me to reintroduce myself, my name is...
sluttyseinfeld t1_jaa9prr wrote
Not free but selling options really is a great way to make money if you know what you’re doing since time is working for you. Selling naked is just regarded but nobody with multiple brain cells does that.
throwitawayCrypto t1_jaa9sa6 wrote
“But what about the premiums” 🤡
[deleted] t1_jaaci3u wrote
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MapleBabadook t1_jaae8r4 wrote
This is completely accurate, except I don't agree that buying puts is a part of it.
[deleted] t1_jaaeos1 wrote
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Painty_The_Pirate t1_jaafqe5 wrote
I'm in the "blow any theta I capture on theta" gang
selipso t1_jaah3ul wrote
How does a covered put work? Do you sell the shares first and then buy them back later?
Kenobi3371 t1_jaah9z1 wrote
No, same as selling a regular put but you have shares instead of cash as collateral
ValarOrome t1_jaanrp7 wrote
except, when it doesn't and it wipes out 6 months of earnings in 1 week.
coinpile t1_jaapxcg wrote
You don’t even need cash, I sell puts on margin.
[deleted] t1_jaaqcp3 wrote
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Good_Human_Bot_v2 t1_jaaqdvt wrote
Good human.
Thguru t1_jaargux wrote
Woho Woho I didn’t come to wsb to find logic being spit out
Positive_Wheel_7065 t1_jaasb8i wrote
Good Good Human Bot.
Imaginary_Ship5466 t1_jaau6n9 wrote
You misspelled loanshark* 😂
Imaginary_Ship5466 t1_jaaundc wrote
🫡
suasposnte187 t1_jab1xfr wrote
Im not disagreeing with you that selling naked options is asking for trouble, but I will say that the entire Tastytrade strategy is largely based on selling naked.
​
They call in "undefined risk"...which sounds a lot safer than "naked short option"
jonnyohman1 t1_jab1zbd wrote
called a cash-secured put. Selling a put means you'll have an obligation to buy those shares at the strike price if it expires and you get assigned. If you want to get fancy you can then take those shares you were assigned and sell covered calls on them. That's called the wheel.
thealiensguy t1_jab32ss wrote
Trumps grandpa made most of his fortune this way, setting up brothels outside gold mines. Why mine when you can just get the miners drunk and get hoes to rob them?
Odd_Entrepreneur_818 t1_jab3480 wrote
Then the banks got robbed
darkspd96 t1_jab3eyr wrote
Then the market tanks and Theta is wiped out like everybody else, perfectly balanced like all things...
The_Paniom t1_jab46in wrote
You can do cash-secured puts on Robinhood.
Beautiful_Spite_3394 t1_jab4duu wrote
He started a whole proud family history of "why work when I can steal from someone else to do it for me"
What a visionary.
thealiensguy t1_jab4i0i wrote
Apple doesnt fall far
AnonymousLoner1 t1_jab5a9x wrote
He's talking about a short sale-covered put.
Just like long shares cover a short call, short shares cover a short put.
That's why you can't do it on Robinhood, since they don't allow short selling.
professor_jeffjeff t1_jab8rsh wrote
Looks like someone's been breaking the first two rules of theta gang
professor_jeffjeff t1_jab96d4 wrote
Even if they do, assignment is still random. There technically isn't another specific individual who bought your specific contract; they all go into a pool and there's some system that determines who actually gets assigned.
Substantial_Bath3369 t1_jabgv88 wrote
spy options :) it true
no_simpsons t1_jabjmx1 wrote
"with some shares"... I roll naked, dawg
SokarDaGreat t1_jabkvlj wrote
My greatest flaw in life is not being allowed to sell naked. Truly embarrassing.
SokarDaGreat t1_jabl3re wrote
Something to do with rights and obligations
SokarDaGreat t1_jablf0d wrote
Yeah but even Tom doesnt do it like a dumbass you can look at the majority of his trades he makes a day and its always 1-2 contracts. He is never selling dozens of contracts per ticker at any given point. You can watch his trades and see him get assigned and then the next day he either sells the stock or sells covered calls if he is down. If you actually are 100% disciplined and follow Toms advice, watch him and that one guys vids explaining strategies, markets, and everything else that goes into being a successful trader then odds are you will come out on top in the long run.
SokarDaGreat t1_jablqh2 wrote
You didnt lmao, it only works out in your favor if the shares you have as collateral against the covered call are above your cost basis. If you are down pretty good and just selling CC’s to recoup some losses and then get early exercised you sold for a loss. Then as usual the stock will run up after the assignment and youll be sitting there with your dick in your hand and the shitty premium.
OTD303 t1_jabmqmh wrote
The fact they don’t allow That means they know the kind of power that is the retail trader Lmfaoo
CarbonHardened t1_jabt74p wrote
It's how thetagang rolls.
pan_berbelek t1_jabthep wrote
So could you explain what those Greek letters mean in relation to options? (I haven't yet traded any options, only shares)
needspantsu t1_jabtx7r wrote
I assume, given shorts have limitless* loss potential, and hood is aimed towards teens and low income peeps, it's a bad mix.
Youngerdiogenes t1_jabuqyk wrote
I wont spoon feed you info. Google it and if you need help afterwards I would be glad to help
SuboptimalStability t1_jabwcz3 wrote
Sell puts buy calls that's how you win on both sides 🤦♂️
HeraldofMammon t1_jabwoi8 wrote
PlanesFlySideways t1_jabwpwc wrote
Camel_Sensitive t1_jac0nqk wrote
Nobody that knows what they're doing sells options because "time is working for them."
Good traders sell options because they're overvalued. That's it. If the time component of an option isn't overvalued, you won't make money over time even if you ONLY sell options.
Camel_Sensitive t1_jac0tdx wrote
This has nothing to do with the fact that you received free premium and can buy the stock again. Peak WSB's.
lostsomuchmoney t1_jac1djl wrote
I need help with delta and gamma that shit is way too confusing. I got vega theta and rho down but those were the easier ones
SokarDaGreat t1_jac1tlr wrote
Then you make a wash sale if its below your cost basis. Peak wsb. Stfu
NOBODYOP t1_jacf2j8 wrote
Lmao, not this shit again.
[deleted] t1_jacgkac wrote
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sluttyseinfeld t1_jacgw5e wrote
viperex t1_jachc1h wrote
If we could set up brothels just as easily today, it'd still be a good way to make money. You can't lose if you own a brothel or casino
viperex t1_jachuqa wrote
> they suddenly rather keep the stock and buy their contract back for a loss
What?
viperex t1_jaci7dr wrote
What delta and what DTE for calls and puts?
AdhesivenessCivil581 t1_jacibwl wrote
Unless your Trump. He managed to bankrupt casinos, even while making extra cash by letting Russian oligarchs launder money in them.
cazbot t1_jacjfwi wrote
I tried to trade 1 options contract once just to see if it operated the way I thought it would. I basically spent $200 to confirm that I am just as stupid as I thought I was, maybe stupider.
SuperUnic0rn t1_jaclpoq wrote
That is a very reasonable way to learn and mitigate risk. I recommend not starting with a week expiration, maybe 1 month, so you have some time to watch the value change.
cazbot t1_jacmf3a wrote
That was actually my primary error, was not understanding the expiration date properly.
Glittering_Leading93 t1_jacmm9s wrote
To compare the entire company Apple to the Trump family. Wow
thealiensguy t1_jacp0hp wrote
I didnt mean the actual company lol i meant an actual apple
Youngerdiogenes t1_jacpnd6 wrote
That sentence makes perfect sense to people who know the mechanics of thetagang.
Youngerdiogenes t1_jacq8l3 wrote
The DTE really depends on you and how much time you have to manage your position.
The delta depends on the stock and your strategy.
.30+ delta is for people who snort cocaine amd share needles.
.20 delta is for people who appear normal but wear womens underwear to big meetings because it makes them feel powerful.
Anything less than .20 is for people who idolize Warren buffet and think pepper is too spicy.
Glittering_Leading93 t1_jacr7ep wrote
Oh shit my bad. Gotcha lol. I’m stupid
the-tweetsift-report t1_jad1dno wrote
you'd think that until your calls end up worthless as always
Barthas85 t1_jad4v5x wrote
Theta Gang (almost) always wins.
BullyBumble t1_jad62lo wrote
Dude. Let me promise you - 90% of references to theta, including this post, don’t use the term correctly.
It’s the diff between saying “stock XYZ might go to 100 from 80 by tomorrow” and “…to 100 from 80 within a year”.
You’ll notice if you open the options chain, the farther the strike the lower the price, and the farther out in time the higher the price.
Theta properly refers to the diff between same strike options over x time. So every time “theta gang got me” but price moved through a strike they missed the point of theta.
BullyBumble t1_jad699f wrote
I’m guessing it wasn’t “easy” back then either
Ohmaygahh t1_jaddsl5 wrote
BLACK FUCKING MAGIC!
CodeMonkey1 t1_jae5ooy wrote
Delta is how much the option price will change relative to the stock price changes, and gamma is how much the delta will change as the stock price changes.
Imagine a stock is $100 per share. You buy a call option for $1.00 with a delta of 0.10. If the stock goes to $101, your option is worth $1.10.
At the same time, as the underlying price changes, the delta itself will change. So imagining the above option has a gamma of 0.01. After the underlying moves to $101, the option delta is now 0.11. So if the price moves up again to $102, the option is now worth $1.21 and the new delta would be 0.12.
VisualMod t1_ja8c66b wrote