Wednesday June 4th 2025

Todays ADP Payroll data hasn’t moved things very much in premarket. Probably the biggest response was for Trump to take another shot at Jerome Powell to drop interest rates just seconds after the data was posted. It seems like lowering interest rates is inevitable, since most of the G7 countries around the world have already done it at least once, and some several times.

Today the things I will focus on is how the expiring options are working out for AMZN and NVDA. I have about 6 expiring options on AMZN, and I made a little tool thingy in excel to analyze and share what happens to the option and share price on the journey from Monday to Friday in the last week of the expiry of the options.

As the week progresses, I will update this, and eventually use it to share how the price progresses, and ultimately why it’s a good or bad thing, and how to deal with the consequences of entering that trade.

Rolling Expiring Options

Tomorrow is Thursday, and although normally we see a new option series 7 weeks out, this week we won’t see a new series because the July 18th Monthly series is already out. My options then if I am thinking of rolling some options forward are to keep them tight, as in next week, or next couple weeks. Another choice I might make is to look at the August 15th options which are going to be 71DTE (days to expiry) at the time. That’s 10 weeks which is a little bit outside the 7 week slinky formula, however I may still consider it because it would allow some outer limits strike prices to be strangled in a way that allows the slinky to flow into it nicely in the next 3 weeks.

MGap

Yesterday the MGap closed the day at 44.7%. For those reading, I will spend a post another day to more explain the reasons for, and details of the MGap concept. For now, I will just say that it’s a calculation I have invented for myself to make sure I stay within the limits of what my Margin Account limits will allow for me. I take the overall account balance, subtract the Maintenance Requirement to get the MGap, then convert that to a percentage of the overall account value. The broker will let you go beyond the types of numbers I try to maintain, but I feel like that’s just finding new ways to hang yourself. In the past, because of severe dips in the market, I have had my Margin allowances get in trouble, and the only answers are either to liquidate positions at a loss, or add more money from somewhere outside your account.

By maintaining a “GAP” between the margin and maintenance limits I try to keep a safe distance from any trouble. In some markets, I would feel comfortable with a 15% gap, or even as low as 10% if I was super bullish on the entire market situation. Normally however, I think for me an MGap of 20% or more is comfortable, and right now, with the figure sitting at 44.7% I can rest easy knowing I shouldn’t be pinched in the near future for using account margin.