any option sellers

Quote from luisHK:

Thanks, I'm trying to understand your position. What is the point to be short ditm calls with little to none extrinsic value ? Do you feel it's a better way than a long put to profit of a sell off ?
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The curve on the (call) upper end (long side) is cheaper. I also take a few DITM calls, cover them and break them into closer to the money calls each week. For instance, I may take a 60pt call, cover it and sell (5) 12 pt calls that have little intrinsic value. That way, with a small drop near expiry I can effectively wipe out that 60 pt call. Of course, as we grind higher that's not really happening much, so I'm feeling some pain.

This works much better with weeklies as opposed to monthlies.
 
the other thing worth mentioning is at least with calls you can buy OTM calls pretty cheap to keep margin clear. In a bear market its a bitch buying otm puts to try and cover your shorts..vol just doesn't work in your favor.
 
Thanks both for your replies.

Ktm, I had a look at splitting the weekly calls in 4 or 5 and it eats much margin, if one get hit a couple of weeks in a row it should come with a margin call, or at least one wouldn't be able to keep on splitting.


Friday has been another ugly day btw, but I'm relieved this monthly cycle is gone. Opened some more monthly ES strangles (for little premium...) and kept itm RUT calls expiring between next friday and June 20th.
 
I was wondering how everyone is doing with weeklies. OR if more people got involved with them.

I am sticking to indexes and some slow etfs. so far so good. simple spreads and keeping it small.

Ef
 
Eddie..I'm doing pretty good. At the low points (the past few weeks) I took a deep breath and sold some puts and move up my calls and right now I'm very balanced, delta wise. still selling the later month calls and buying either the es cash or buying the weekly calls. If we go higher this op ex week I'll begin to buy a few otm puts. The increase in vol has made it more profitable to sell.
 
Quote from RichardRimes:

Eddie..I'm doing pretty good. At the low points (the past few weeks) I took a deep breath and sold some puts and move up my calls and right now I'm very balanced, delta wise. still selling the later month calls and buying either the es cash or buying the weekly calls. If we go higher this op ex week I'll begin to buy a few otm puts. The increase in vol has made it more profitable to sell.
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Good thanks Richard for the update.

I am sticking to the 60min and keeping it simple. I doubled my actual trades and it lets me sleep better at night. i am going for the same amount dollar wise weekly, but now i do it in 9 positions instead of 4. I find my pnl line is smoother... Do you got any experience/feedback in that.??

Your doing calendar spreads, i am looking to move into that, that will be my next strategy to do.
 
Quote from stock_trad3r:

you got to be a baller to sell naked options
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Unless you want to own the stock, but i am not there yet. No naked options for me. ,,, Although there is a guy here on et that has a whole thread about it.
 
Quote from stock_trad3r:

you got to be a baller to sell naked options
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Nah. At least for naked puts it's no more a baller than one who buys stock. In fact it's less risk.
 
Quote from stevegee58:

Nah. At least for naked puts it's no more a baller than one who buys stock. In fact it's less risk.
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Completely agree. for some its their main strategy.

EF
 
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