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But I don't think I'm in general far off on the timing of my triggers. Where I'm having problems is in performance using ATM or OTM calls. Earlier people indicated that just shifting to DITM calls would probably solve a lot of my issues, and indeed, it is looking that way (I average a new...

Well, my reported results going long the underlying are honest-to-God real life results. So, I think I'm doing OK. I'm sure others are killing it, but I'm happy with those results, and moreover, I understand the system. I'd always like to learn more, though, and thus I'd like to understand...

I don't enter trades early. I enter them when they trigger -- it's basically a relative strength trade. That said, if I'm happy with how I do going long the underlying and then exiting when I get my exit trigger, I should probably be aiming for the same delta in options. That means almost...

You're suggesting the ATM call, whereas others indicated DITM calls would be a better proxy for the underlying. Can you elaborate on the differences?

Sorry, I didn't get a chance to place that trade yesterday.

Thanks. That is an eye-opening point of view.

The day it occurred to me that a long call was essentially long stock with an "invisible" stop was a day my trading got a lot better. Indulge me, though -- do you try to account for sub-unity delta as well as slippage when comparing a long DITM call to long the underlying? It seems that in the...

This may not be the answer you are looking for, but I sometimes place an exit on an option play based on the price of the underlying.

I took a small flyer on the AAPL AugWk4 495/500/505 put butterfly in the last hour of trading last Friday. Sold it for $355.17, bought it back near the close for $388.53. Lost some $33 on the trade. The stock did make the predicted move, just not quite far enough to turn a profit. I think...

Didn't mean to imply that 155/171 was ATM -- 164/165 would be. Looks like the Sep13 164/165 risk:reward is ~ 1.38 (and it's a pretty binary trade). Stretch to Nov13 164/165 and it's ~ 1.22, but I'm not really predicting direction that far out. My average trade is 7 days or so. Probably...

Thanks for clarifying, cdcaveman. I'm definitely not all the way there yet. I understand the synthetics -- I always start with "stock equals call minus put" and go from there -- but I have never put together the "long stock is short vol" relationship. From that, I see that being LONG vol...

I've been re-reading a couple of my options books, and I see some of the points made on this thread more clearly. Thank you. I have a specific question about one suggestion from several days ago (a vertical spread): are the arguments against that strategy the same as those against a covered...

Agreed on the index argument. TSLA isn't the kind of stock I'd play this way. JNJ, now that's different.

Isn't his idea to buy cheap options out on the tails and keep everything else in treasuries?

Please understand every argument I have made supporting these kinds of strategies are exclusively in the context of B&H as the benchmark. What does Taleb say about that?

THAT is an argument I can get behind -- effort and tax exposure don't justify the return, at least for some people. I don't have anywhere near 70 trades going at any one time, and for those of mine that are B&H (AZO, MCD, PFE, WMT, etc.), I am happy to sell OTM calls. I haven't had any...

Hey, I'm taking this too far. Apologies. I'm definitely not looking for a fight. I'll dig into the archives and catch up.

My math skills aren't off. Statistically, the number of times a stock doubles and you get stuck with 2% are almost nil. It is more than offset by the REDUCED VOLATILITY you get by generating income. I don't care that you THINK this doesn't make sense -- the data support the conclusion...

Sorry, I had 2% on my brain -- that depends on expiry. Most of the calls I've sold and had expire worthless are maybe 2% OTM but priced at a sub-1% value of the stock for, say, 1 month.

Look, I realize I've contributed to the thread hijack, but assuming the original poster got his money's worth: Read the study. Look at the returns along with Sharpe & Sortino ratios. What's missing? (This doesn't even BEGIN to get into the red herring that a covered call has "100%...