Putoption — Trading Ideas on TradingView

Options Indicator Explained - so you can SEE what you trade Ever since we created this indicator back around 2020 on the TradingView platform it is so far the best platform for our analysis, research, coding, and development of different trading tools. This was 4 years ago, but we have been with TradingView almost for a decade ! The whole concept of this indicator came when a long time ago we read the big big book of options, and could not understand how come the stock price moved up but our calls are losing money ! Yes, we have been there too. And then came this indicator to life. We don't make a trade without it ever since. If you saw the video, you clearly know why. Let's delve into some key concepts that can elevate your trading game: ### 1. Visualizing Profit and Loss One of the most powerful tools in an options trader's arsenal is the ability to plot profit and loss lines on a chart. This visualization helps you understand the time decay of the options you buy or sell. By seeing how your potential profits or losses change over time, you can make more informed decisions about when to enter or exit trades. ### 2. Moving Beyond the Greeks The Greeks—Delta, Gamma, Theta, and Vega—are often emphasized in options trading, but their standalone value can be limited. What truly matters is how these metrics impact your profit and loss curvature. Think of it like driving a car: while an acceleration meter provides some information, what you really need is the speedometer and a clear view of the road. Focusing on the profit and loss curves allows you to grasp the real impact of these factors on your trades. ### 3. Identifying Pivot Points By observing profit and loss lines, you gain insights into optimal entry and exit points. Placing trades at pivot points can enhance your reward-to-risk ratios. Certain options offer generous room for stop-loss placement and quick profits if you choose pivot points where price rejections are likely. Seeing these lines helps confirm that your trading idea has a high probability of success. ### 4. Conducting Volatility Simulations Professional volatility testing with your indicator is crucial. It allows you to anticipate how changes in volatility will affect your options' profit and loss. Each case is unique and dependent on the underlying stock, so it's vital to have contingency plans and avoid trading blindly. You must always take into account that the volatility can drop or rise against you, and you need to see that even if it happens, you will still be okay, and not be a dreamer. Reality is everything, trade realistically. ### 5. Timing Your Trades Boost your performance by understanding how much profit you can lose (when buying options) or gain (when selling options) over the duration of your trade. This knowledge helps you make better timing decisions and manage your trades more effectively while you are inside the trade. In some trades you can clearly see that you just don't have the time to survive a correction and then wait for the next pulse wave to come and save you, you can see clearly that it is better to take profit today, since you just do not have enough time for a correction and a bounce back to the current profitable price. In options, what it is profitable today is NOT profitable tomorrow. I show you this in the video. ### 6. Simplifying with Profit Lines You don't need to rely heavily on the Greeks anymore. Profit lines already account for these metrics, freeing your mind to focus on price action. This approach eliminates the confusion often associated with the non-linear behavior of options, rooted in complex models like Black-Scholes. ### 7. The Black-Scholes Model and Implied Volatility Understanding the Black-Scholes model and implied volatility is fundamental. These concepts help you grasp how options are priced and how market conditions can impact their value. Using the indicator, you don't need even to know who or what is the Black-Scholes Model, since it does all the work and heavy lifting for you, by plotting you exactly what you truly need... Where you make a profit, where you will make a loss, and how much (profit lines). ### 8. In the Money vs. Out of the Money Knowing the difference between "in the money" and "out of the money" options is crucial. In-the-money options have intrinsic value, while out-of-the-money options are more speculative and rely on price movements to become profitable. ### 9. Short-Term vs. Long-Term Options Short-term call options offer quick potential gains but come with higher risks due to time decay. Long-term call options, on the other hand, provide more time for your trade to work out, reducing the impact of time decay but often requiring a larger capital investment. I show a clear example in the video. ### 10. Maintaining Reward-to-Risk Ratios You should make sure you always maintain the reward-to-risk ratios in your favor BEFORE you enter the trade, this is what keeps you in the game and makes you thrive and not just survive. Do you think they let a pilot to land an airplane, just with his "gut feeling" or do they give them an indicator to SEE the runway? If you don't see your profit and loss lines, you don't see the runway when you land your plane. We've all seen those wallstreetbets BLIND crash landings in options and know how they end before they started. This can and should be avoided, always know your risk, and your potential reward. ### 11. Proof of Accuracy Finally, reliable indicators provide proof of accuracy, showing you the same profit or loss you'd experience given stock movements and implied volatility changes. This consistency gives you confidence in your trades, eliminating confusion and preventing unexpected losses. In the end of the video, there is proof of the accuracy, that the indicator in did shows you the same profit or loss you will have in the position, given the stock movement and implied volatility changes, so you can rest assured that your landing indicator will not surprise you no matter the weather, you will have full control on your options trade. No more the feeling of confusion and then your fast profit crushes to zero or even a loss and you don't know why. Master these concepts, and you'll have a robust framework for navigating the complexities of options trading with precision and confidence.

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How to PROTECT your profits while letting them run In the trading business you need to let your profits run while also managing your risks that means to cut your losses short. Losses of unrealized profits are real profits that are lost. What if you could save them? Well, there is a way... It is not always available but it is one you want to know since if you can save 3 points of wiggle room and pay 1 point or less, over the long run it adds up to HUGE chunk of profit to your bottom line. The reason I applied this method is because TSLA was doing 3 days in a row a push and gap up, so it seems likely people will want to take profits... but this is TSLA... it can shoot up above 500 and reach who knows where... (she did it before...). So I want to TAKE MY HUGE profit, while giving it the option to continue to the moon, if it will want to do so... You can never take the very top anyway, so if you "give back" 1 point of profit it is considered reasonable, but if in case the price falls down sharply or gapped down I can give back maybe 3 points with this strength of volatility, which is undesireable. So what I did? I sold the PUT option at strike 470 at a price of $15 (my point was $17) so for me it is even less than a point so it is very attractive deal to me... Then... if the price had crushed down it meant for me that I sold my stocks at a price of 470 while paying the hedge cost of the PUT option of 15 so it is equivalent to me that I sold my stock at a price of 455, which is ALMOST the top. Making sure ~90% of the profit stays in my pocket. So I WIN. If the price would continue to shoot up, then I making SUPER HUGE MONEY, while sleeping like a baby, that I already realized my HUGE profit. So I WIN. So either way, I WIN ! Since the price did not crushed the next day and hold, and my stop loss advanced, so there was no longer need to my PUT option hedge since if price will fall I will get out with the stop loss with the same profit. So I sold the PUT hedge for a small loss, so the hedge cost me 0.25 a point overall. SUPER WORTH IT ! FYI, this comes from years of experience, but I give you some of my experience, you could do it too. The moral of the story... when you have HUGE profit, and you feel itchy to take profit, don't ! and try to hedge yourself with options ! this way, if you were wrong and you have GME, AMC on your hand, you don't let them go, and you WIN either way ! Sleeping like a baby.

How do crypto options contracts affect the market?Hi Friends Today we will explain the option contracts affect on crypto and other markets. First lets see whats an option contract? Options are derivative contracts that entitle the purchaser to buy or sell the connected asset at a predetermined price before the contract expires. There are two types of options , call and put. The right to buy is known as a ‘call’ option, whereas the right to sell the underlying asset is called a ‘put’ option. Every options contract comes with a specified expiry date which is the last date for settling the contract. The price at which the options contract is settled is called the strike price . This is the price at which the options contract owner is allowed to buy/sell the underlying cryptocurrency. The price at which an options contract is bought is called the premium . Now, when would you buy a cryptocurrency? Obviously when it is trading at a price that is lower than it should be,right? This means that you find it to be undervalued and you expect its price to rise in the future so you can sell higher and make money. But what if the crypto price fell instead? Wouldn’t it be nice if somebody would still buy the cryptocurrency from you at a higher price? For that you would require selling rights of the cryptocurrency and you will buy a put option. Now on the flip side when would you sell a cryptocurrency? Of course, when you think that it is trading at a price higher than it should be. This means that you find it to be overvalued and expect it to fall from here. But what if the price of the cryptocurrency rose instead? You would then want to add more crypto at a lower price and sit on assets that are valued higher than your purchase price. For this you would need buying rights or a call option. Since options allow traders the right to buy/sell assets at a predetermined price they shield them from the volatility of the crypto markets. Moreover the volume of the call or put options in the market signals the direction in which investors expect the markets to move. More put options indicate that investors expect the markets to fall whereas more call options indicate that investors expect the market to rally. Now when the option contracts are near their expiration date, large players try to drive the underlying crypto price into a favourable range depending on the option contracts they have purchased. This is done so that the deal can become profitable. In summary: Buying a Call (Long) = Bullish -----> you think the crypto will be worth more later so you want to lock in todays price to buy later at a profit. Selling a Call (Short) = Bearish -----> you think the crypto will be worth less later so you want to lock in todays price to sell later at a profit. Buying a Put (Short) = Bearish ------> you think the crypto will be worth less later so you want to lock in todays price to sell later at a profit. Selling a Put (Long) = Bullish --------> you think the crypto will be worth more later so you want to lock in todays price to buy later at a profit. I hope you enjoy this education please share me your opinions in comments. thank you all specially @TradingView team

Short Selling Put Options I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Short Selling Put Options When short selling put options, a question people ask me is, “Okay, Markus, how do you decide what strike price do you want to sell and whether there’s enough premium in there?” I made a put options calculator called “The Wheel Calculator” that I gave away as part of my recent class on selling put options (Theta Kings) that helps me determine just that. This calculator is now also integrated within The PowerX Optimizer Software as well. Using my put options calculator, I can enter a few different figures and it quickly lets me know if this stock makes sense to sell put options on. I started a small account with $25,380, and have continued to grow it substantially. This was all done by selling put premium using my handy put options calculator! So let’s take a look at a few examples using the airlines. Here’s how you can quickly compare if an option makes sense to sell. So United Airlines UAL , at the time of this is trading at $31.08/share. So I’m going to take a look at the April 24th expiration and the $20 strike price. I’m thinking maybe it would be a good idea to sell the $20 United Airlines UAL put option. So now that I have the strike selected that I would like to sell put options on, let’s take a look at the premium these options have. This will let us know if this trade actually makes sense. Right now, the Bid/Ask is $0.74 over $0.87. So I probably can get $0.80 for selling this option. This is all I need to enter in my spreadsheet, along with the expiration. With the needed inputs entered into my handy dandy put options calculator it tells me, “United Airlines can drop 36% and you’ll still be okay.” It has to drop 36% before we get in trouble. I think that’s pretty good odds in my opinion. The cool thing is that it also says that based on my account size, I should buy 17 options, and I would collect $1,320 in premium. So this means that per day I would get $110 in premium. That’s not bad at all if I can make $100 on just one position. And I like to have 4 to 5 positions in my account at any given time. So based on the number of positions I like to have, this means that you can make $400 to $500 per day collecting premium. I like this a lot because it means annualized I would make 87%! 87% is nothing to sneeze at, right? Short Selling Put Options — American Airlines So now let’s do this same thing with another airline, American Airlines AAL , and see how the numbers look. So like we did with UAL , I’m looking at what strike price in relation to where AAL is trading would it make sense to sell. For American Airlines AAL it looks like probably the $8 strike price would make sense right here. You always want to do it below the previously established low. So let’s take a look at American Airlines AAL . The price right now is $12.26. the options strike price, we said we’d probably have to look at is $8. Here we’re able to collect $0.35 per contract at the $8 strike price. And you see, I could actually, since American Airlines is so cheap, buy 41 options based on my account size. So 41 options and I would collect $1,444 in premium. This means I would get $120. That’s not bad at all. And you see, American Airlines AAL also can drop 35% and we would still be OK. We only get in trouble if American Airlines over the next 15 days drops more than 35%. Possible? Yes. This is why you should always be willing to own the stock. And this is why you want to make sure that you’re not getting in trouble. You need to adjust your position size based on your account. Here obviously, I don’t want to trade two airlines because if airlines are crashing, they probably all do. With that said, let’s take a look at Boeing AAL . Boeing Example I like trading Boeing. I'm looking at a Boeing AAL chart to see where might be a good level here to sell Boeing. Based on where AAL is trading at right now, it looks like $100 would be a good level to take a look at. Let’s first try a strike price of $100, shall we? For $100 we get probably a $1.55 right here, with Boeing AAL trading right now at $150. So if we were to sell the $100 put option on AAL , we are looking to make $1.55/contract. And you see, this means that Boeing AAL could drop 33%, so we’re good here. However, we can only buy three options. Why? Because Boeing AAL is really expensive. So if we would have to buy Boeing at $100, this is when it gets expensive, right? So you see, the strike prices here are much, much, much lower. This is where you see I would only trade three not to overextend myself. And that’s very important when you’re selling puts. You want to make sure that you’re not overextending yourself because otherwise, you’ll get margin calls. Margin calls are ugly. A margin call means that your broker tells you, “I want more money.” You want to avoid that at all costs! Because if you don’t have the money, you would have to sell the stock at a price that you don’t want. Usually, this is how you can wipe out an account. Anyhow, you see this is how we would only make $43 a day. Let me ask you, what would you rather make? $110 to $120 per day? Or $43 per day? I don’t know about you, but for me, these are better. So it’s very easy to quickly compare which options you should be trading when you’re selling puts. One of my favorite trading strategies right now is selling puts. This is what you have seen in the past few examples. My goal is to make $400 to $500 per day by doing so. The best days to sell puts is on a down day. On a down day, the VIX is usually shooting up and options premiums are higher. This is exactly what you’re looking for as a premium seller. For experienced options traders, selling put option premium in an environment like this can be a great way to consistently generate income, even if the stock doesn’t do exactly what you want. I hope this helps!