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As Daniel mentioned, the wide B/A spread is a problem. So is time decay and a reduced delta. The only way it makes sense is if you're spotting big moves and you leverage up the option size. It wouldn't work for me since I scalp small net moves in volume.

Early assignment is the best thing that could happen because that would mean that you'd be booking the entire credit. But you're not likely to be assigned early if there's any time premium remaining in the short option and that's not going to happen because the size of the move would have to be...

No option strategy is good unless implemented in the right circumstances.

You can't sell volatility just because it's high. In the example, the underlying dropped 9 pts overnight so win on IV, lose on price unless your short options were 2 strikes or more OTM.

That's the best answer I've seen here for a noob wannabe retired yesterday, expecting/hoping to live the good life from trading :)

If you're buying/shorting equal amounts of stock in your pairs trading, then you'd do the same if the respective deltas were similar. But chances are you're not going to find 2 option positions with similar deltas and that may complicate things. FWIW, I've pairs traded but I've never been...

If you're buying or selling options outright, for the most part, you have to get the direction right... or at least not get the wrong direction right. Same hold true for neutral strategies. You have to get non direction right :) If you're going to trade volatility then you're going to have...

If your ownership of stocks at specific lower prices is acceptable then selling puts is a good idea. With one week until expiration, for ATM, you can get approximately 1/2 the premium as compared to one month (all other factors remaining the same). This applies less the more you go OTM...

I think that averaging down is better suited for the long term investor, albeit an individual or a mutual fund buying value. IMO, for trading, taking a small manageable loss is far better than marrying a position and becoming that investor.

As a trader, I'd sooner scale in as the underlying ramps up, running a tight stop. Adding more to a falling position is a recipe for disaster.

SELL? SELL? Sell to who? You're the only one that's buying !!!

I don't thing that think is what you thought I thed.

That's what they call amassing a portfolio by adverse selection :)

Risk and reward go hand in hand. To get more reward, you need to take on more risk and vice versa.

When I was a noobish investor before the war (g) I opened 5-10 DRIPS in quality companies. Some offered discounts on reinvestment of dividends. Some even offerred discounts on new cash. There's nothing like getting a dollar worth of stock for 95 cents. If a company really rose, I'd find...

Why in the world would you set a maximum loss AFTER a 50 point move against you? If your money timing and management is so bad that you let a short $100 position move to $150, you should be thinking about a new hobby rather than predicting a reversal. Either set up positions with inherent...

The real problem is that the Senate is broken. The filibuster was invoked twice as much last year versus any previous year ever. Over 200 bills passed in the House are in limbo. Obama couldn't take a leak if it was up to the Senate. Special interests rule. We have the best government that...