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I think at this point this thread is about to descend into the usual semantics and pedantics often espoused by those who do not want to venture into the true complexities of quantitative finance. By the way, thank you for elevating my appreciation for risk and expected value in this thread.

Oh I see, you're referring to a spread. I was referring to a naked position without a long strike. Even so, if you profit 8 out of 10 times with an average profit of $1 and lose 2 out of 10 times with an average loss of $4, you break even. So let's say you have a slight edge in forecasting the...

ATM gamma is far greater than OTM gamma, so would mind clarifying what you mean by the zero gamma comment? Thanks in advance, my friend.

Without setting a maximum loss criteria, you could incur insurmountable losses during large selloffs.

Pardon my interruption gentlemen and thank you for this insightful discussion, especially Maverick74. Trading options appears to be an exercise in probabilities and statistical analysis in order to expect consistent and sustainable profits in the long-term. Selling ATM clearly lowers the...

Selling covered calls can reduce cost basis of the ETF positions, however, the probabilities of shares being called away are real. Trading options, regardless of covered or not, is an exercise in applied probabilities and volatility trading, whether you're aware or not. Don't let my post...

How levered was your portfolio? Were you using almost all of your available margin to hold your positions?