A cash covered put is a lousy bet if the current ATM put 5-6 months out isn't paying at least 13%.
The next time the VIX sustains 60 (it will happen...again), you'll get 20% prem for selling the 5-6 mos out ATMs on the SPY. THAT'S a great trade as price nears a major support. You can stagger entries down on the SPY just 5 times in that environment and get a great long term cost average the actual real-time market price never touched.
I'm not looking at any options chains now, but those puts are probably selling AT THE MONEY 6 MONTHS OUT probably for some pathetic 5% premium, a HORRIBLE BET near all-time highs.
It's the Millennials' turn to get wiped out during the next bear. This OP story is played out over and over on Stocktwits. You have to take losses. I don't care if someone wins 90% of the time. It's the 10% loss that takes it all away. You have a much better chance at long-term survival taking 50/50 chances where the reward to risk ratios are averaged out to 1.5x-2.0x to 1. That kind of trading is boring easy because the only question that needs to be answer correctly half the time is: "Am I currently entering during an ongoing trend?" (Yes, it IS just that easy and there's no "secret". I already mentioned how in the past few months.)
Great trading requires a creative state of mind. Mark Douglas put it best when he said that creativity is absent in the presence of a strong belief system. Most of the guys I see on ET who are experienced enough yet still looking for help as they've failed for years to become net profitable (or treading water) have one thing in common: strong belief systems! I could describe how to trade successfully to one of these types, something I took a long time to prove out to myself and I'll get a lecture from 30 seconds of thought on their part. It's like clockwork...no thanks.
The next time the VIX sustains 60 (it will happen...again), you'll get 20% prem for selling the 5-6 mos out ATMs on the SPY. THAT'S a great trade as price nears a major support. You can stagger entries down on the SPY just 5 times in that environment and get a great long term cost average the actual real-time market price never touched.
I'm not looking at any options chains now, but those puts are probably selling AT THE MONEY 6 MONTHS OUT probably for some pathetic 5% premium, a HORRIBLE BET near all-time highs.
It's the Millennials' turn to get wiped out during the next bear. This OP story is played out over and over on Stocktwits. You have to take losses. I don't care if someone wins 90% of the time. It's the 10% loss that takes it all away. You have a much better chance at long-term survival taking 50/50 chances where the reward to risk ratios are averaged out to 1.5x-2.0x to 1. That kind of trading is boring easy because the only question that needs to be answer correctly half the time is: "Am I currently entering during an ongoing trend?" (Yes, it IS just that easy and there's no "secret". I already mentioned how in the past few months.)
Great trading requires a creative state of mind. Mark Douglas put it best when he said that creativity is absent in the presence of a strong belief system. Most of the guys I see on ET who are experienced enough yet still looking for help as they've failed for years to become net profitable (or treading water) have one thing in common: strong belief systems! I could describe how to trade successfully to one of these types, something I took a long time to prove out to myself and I'll get a lecture from 30 seconds of thought on their part. It's like clockwork...no thanks.
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