Recent content by trader13682

In regards to #4, writing the calls in 3 month increments versus a single 12 month increment seems to have the following 2 disadvantages: (1) it would involve 'paying' the bid/ask spread 4 times instead of 1 and (2) it would require the call strike price to be a much lower # (EG: 10% above...

In a strategy involving writing cash-secured naked puts (deep OTM), there is typically a large amount of capital being held in reserve (over and above the maintenance capital required to maintain the option position), so that if assignment occurs, there is sufficient capital to purchase the...

I was wondering what is the risk level of writing deep OTM calls on an index such as SPY. For example, the current price for a $150 JAN 18 2013 call on SPY (european-style option - so exercise is on expiry day only) is around $1.90. So, that is around around a 380 day holding period and...