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Ring the bell we have a winner. I960 is a buyer of the options I'm selling. But remember if you sell a straddle and then put on a hedge that is converting your initial trade to back to back credit call and put spreads. I too adjust my trades. If I just sold you a put and if I need to adjust my...

Buyers are not stupid. the question to ask yourself is why are they buying those otm strikes that seem impossible to reach and never go into the money? I did read. Good stuff.

In your example you used mini SP500 futures contracts and options on those contracts. I don't trade futures for index exposure, but I will trade index ETFs and options for ETFs such as IWM and SPY. I'm really not sure what your point is. First you said do not sell puts against the index...

I don't think anyone is advocating or mentioned selling puts against emini sp500 futures. 60562"]Good to see you back. I think I remember you from a pair trading thread years ago. I had a question on the mechanics of option selling because I think it might be suited to enhancing one of my...

Lol. You still have to be able to execute. :)

It doesn't work for everyone and certainly not in every market condition.

In regards to "why not just go long?" Because someone is willing to pay me to go long at lower prices. Less risk. If the stock continues to go higher and my short put expires worthless, I'll probably just sell another put the following week and follow the trend. If there is a sudden spike...

This thread is getting silly. I post a strategy that has been successful ytd for me and over many mrkt cycles and what do I get... A bunch of nay sayers talking smack about gamma delta market efficiency steam rollers etc. Nothing works 100% of the time, but if you find something that works...

If you are trading the index than yes selling volatility when it is historically low doesn't make sense. But there are a ton of stocks with high enough IV to make selling puts worthwhile. From my perspective selling ATM straddles is even more risky because you initiate a position that can go...

Part of the pricing model with options includes IV or implied volatility with a certain period of time. It doesn't predict direction of price, but gives you a theoretical value of where a stock price will be. When you overlay a normal distribution curve you can apply probabilities to where the...

It is easy, but guys like you want to make it difficult. Forget about deltas and gammas. All i care about is the probability of a certain strike price option expiring out of the money. Like i said there are no guarantees in trading but if you stick to the high probability trades and add some...

In my example I was using 100% utilization. So approximately 50k principle gives me 100k buying power. I've never traded the minis but the spy did close down 5% the week of august 17. So assuming I sold 3% out of the money puts than I would have been put spy and been underwater about 2%. The...

Well again, I am not trading one concentrated position. With 10 positions, if one goes bad that is only 10% of my capital tied up until I can return the position back to cash. Also remember I have drawn a line in the sand sort of speak by using the 52 week moving average. I'll keep holding a...

All good points. If options are priced correctly, they will reflect the implied volatility. One thing I did not mention is that I do not like to trade around events with unknowns such as earnings announcements. I'll typically take a pass on those stocks as one really never knows what will...

Good question. So if I had 100k of buying power and I sold puts on stock where if assigned equalled 100k, but because of the gap down my portfolio was now worth 95K, I could either sell CC to make up the 5k or sell stock and realize a 5% loss or actually closer to 10% on my principle and start...

Yes as long as I manage my margin correctly. Also keep in mind selling calls against stock can reduce margin calls. If you ever found yourself getting a margin call of say $5000 dollars you have a choice. Sell stock or fund the account. Selling a call is essentially the same as selling stock...

Remember Im selling two standard deviations away to begin with so if the stock moves that much on all positions, I'm theoretically flat or have assumed stock at the strike I originally sold.

Remember my positions expire within 4-5 days. Plenty of time to react to events and changing market conditions. 2008 wasn't a problem. Look at a weekly SPY chart and remember I'm not selling puts on stock that trade below the 52 week moving average. So back in December of 2007, SPY traded...

Am I really concerned about the rate of change in the "price of the option"(Gamma) or how much an option will move (Delta) when the only thing I really care about is the price of the underlying stock?