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not saying buying the shares to write the call is a good idea lol, just that was where the debate started iirc.. the whole original point was just to say that selling puts can be long-term profitable because of skewness.. the part about CC's was just to provide an example to contrast.. as to...

@taowave @newwurldmn @Kevin Schmit as @destriero pointed out, i may have misrepresented what i was trying to say above, so to clarify: a 30D put will cost more than a 30D call if there's put skew.. you get paid more to take 30D of put risk than 30D of call risk.. and you'll see a small cost...

so, i understand that you're referring to the forward, not the ETF price, and in that case the numbers may well be different and i'd defer to you cuz i don't know a whoooole lot about forwards.. i'm just speaking on someone who wanted to either buy-write or short put the ETF today at close

ah word.. i could see the confusion.. now that you understand what i'm actually saying, does it make a little more sense?

same strike call and put do not always trade at the same vol? that's the whole idea behind vol skew, that put-call IV isn't always at parity.. IWM, July 16th: $223 strike buy-write vs a $223 short put IWM closed @ $221.40 according to ToS $223 short call marks at $6.58, cost basis @ $214.82...

i'm talking about the actual closing stock price of IWM.. $221.40 (+0.65%).. at least that's what ToS is showing?

i'm going off the close price, not the AH price.. options prices don't move AH, so the prices should be the same as they were at close, no? also, had to edit my reply cuz i misworded a couple things

no, that's not what i'm saying.. first, to skew, i'm not saying it guides your bias.. i'm saying it gives you a metric for how to most efficiently express that bias in your trades.. i.e., which strategy provides the best risk-reward ratio in the current market conditions? if i'm selling puts -...

i'm talking about as it relates to delta exposure.. i.e., you receive a larger credit per delta when selling the 35D put versus the 35D call, even tho your delta exposure is the same.. but also, yes, buy-writes at the same strike as a short put.. also, use IWM july 16 current contracts as an...

thanks for taking the time to break all that down for me.. super appreciated man, everything you said clicks perfectly.. we aren't trading delta neutral, but i can definitely see where that comes into play if you're just trying to capture the skew without a directional component.. funny you...

yah it's a whole world of market theory in and of itself... it can be very exciting at first, to see how you can manipulate skew to create trades with positive expectancy... the devil is in the details though, more specifically, the position management details... less about timing tho, more...

no... i don't know all the mechanics of how PUTW manages their trades and the criteria they look for on entry... what i'm saying is that if you yourself sell 30D puts on SPY for the next 20-30 years then you should, according to the probabilities that govern derivatives markets, outperform the...

i'm soooo glad you asked all this cuz the answers are all pretty straightforward and really easy to comprehend so you should be able to follow no problem lol... selling puts gets you into stock at lower price because, umm, you're selling a put below the current stock price and taking in a...

you are correct, they perform better in down trends and worse in up trends.. but expected values is all about probabilities, and probabilities require numerous occurrences over time, not just in one specific market period.. so when you average out all the down trends and up trends in a 20-year...

it's a bit more convoluted than that.. yes, the velocity of risk is seen to the downside because indexes grind up and crash down.. but look at what indexes actually do in the long run: they go up.. the easiest way to see how this works is to try an ATM put debit spread on SPY then compare it to...

if it confuses you, then read thru it a bit slower?

yes, 100%.. i said "pretty much" - meaning most of the ones i'm aware of, but NOT all - "everything retail investors touch" - meaning the stocks themselves, not the individual investors - has been getting abysmally hammered.. you could've made 100% ROC in the past month shorting SQ.. but guess...

all the retail guys i know, of course.. obviously i don't know everyone who trades the stock market :confused:

you are correct about the expectancy.. the reason i suggest selling puts on indexes works in the long run is because indexes have put skew.. if you believe the probabilities that define derivatives markets hold true over time, then puts on indexes are not fairly priced.. also, yes, there is no...

@taowave it's all in the metrics of options pricing.. iirc studies have been done showing selling puts on indexes outperforms.. reason being if the probability models that drive derivatives markets hold true, and the data seems to suggest that over the long term they do, then selling puts will...