any option sellers

Quote from Eddiefl:

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.
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I'm not exactly doing calendar spreads per se, because when I initiate a trade for a farther out month it is usually as a straddle based on where I think the market will be in a month or 3 and based on what my overall pnl delta looks like. Then as the market moves I make adjustments by buying and selling weeklies. At any one time I have a lot of positions on but only (generally) at the one contract level...so basically trading very small. I take profits on the winners then wait or roll the losers...sometimes close them by buying (or selling) the cash as needed.

Everyone manages their positions differently, I look at them weekly..printing out the pnl and positions statement , then see where I might be vulnerable or where there is a profit and make a plan of execution based on that. There are countless ways of managing a trade the limitation is your imagination! Managing your overall portfolio is also very personal, subject to your needs and objectives. I "think" experience and trial and error are probably the only real teachers out there. gl with your trading.
:)

also given very good advise here on ET...cash out periodically.
 
Quote from RichardRimes:

I'm not exactly doing calendar spreads per se, because when I initiate a trade for a farther out month it is usually as a straddle based on where I think the market will be in a month or 3 and based on what my overall pnl delta looks like. Then as the market moves I make adjustments by buying and selling weeklies. At any one time I have a lot of positions on but only (generally) at the one contract level...so basically trading very small. I take profits on the winners then wait or roll the losers...sometimes close them by buying (or selling) the cash as needed.

Everyone manages their positions differently, I look at them weekly..printing out the pnl and positions statement , then see where I might be vulnerable or where there is a profit and make a plan of execution based on that. There are countless ways of managing a trade the limitation is your imagination! Managing your overall portfolio is also very personal, subject to your needs and objectives. I "think" experience and trial and error are probably the only real teachers out there. gl with your trading.
:)

also given very good advise here on ET...cash out periodically.
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Thanks for sharing Richard. I am picking most of what you are sharing. I am many levels below you as far as option trading. Will watch and learn like you say, its the best way to learn.

EF
 
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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a small risk of devastating loss, and a high probability of making money. I imagine in 2008 online brokers got burned by put sellers and had to front the losses out of pocket in some extreme instances, and therefore have increased the margin requirements substantially. From what I read some sites require 250k to sell naked options. I'm not sure if someone with only 5 figures can sell options.
 
Quote from stock_trad3r:

a small risk of devastating loss, and a high probability of making money. I imagine in 2008 online brokers got burned by put sellers and had to front the losses out of pocket in some extreme instances, and therefore have increased the margin requirements substantially. From what I read some sites require 250k to sell naked options. I'm not sure if someone with only 5 figures can sell options.
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Depends on how large the position is. If you sell 1 10 strike put contract for $.50 and the stock goes to 0 you lose 10*100-0.50. If you buy 100 shares of stock at 10 and it goes to 0 you lose 10*100.

Owning stock is worse from a risk perspective.

To sell puts you only need to put up margin for the max loss = 10*100. Naked calls are a different matter and require more margin.
 
I'm pretty sure these guys basically just sell options.

http://www.ljmpartners.com/performance-history

They had an extremely rough May for some reason, not sure of the disconnect. Usually they do well in uptrends and lose their money during market corrections. May of 2013 was their worst month ever for the conservative portfolio. However both moderate and aggressive took pretty substantial hits as well. In their strategy tab it says they use index S&P options to hedge and sell volatility through, so why such a dramatic drop in May for the conservative portfolio?
 
Quote from stock_trad3r:

a small risk of devastating loss, and a high probability of making money. I imagine in 2008 online brokers got burned by put sellers and had to front the losses out of pocket in some extreme instances, and therefore have increased the margin requirements substantially. From what I read some sites require 250k to sell naked options. I'm not sure if someone with only 5 figures can sell options.
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You can sell options with IB with 5 figures. I am not sure margins have changed in 3-4 years.
 
Quote from Took2Summit:

I'm pretty sure these guys basically just sell options.

http://www.ljmpartners.com/performance-history

They had an extremely rough May for some reason, not sure of the disconnect. Usually they do well in uptrends and lose their money during market corrections. May of 2013 was their worst month ever for the conservative portfolio. However both moderate and aggressive took pretty substantial hits as well. In their strategy tab it says they use index S&P options to hedge and sell volatility through, so why such a dramatic drop in May for the conservative portfolio?
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I have no insight into their strategy but it's plausible short calls in equity indexes would have been hard to handle in May. A 6% rally, low vix (low premium).
 
Quote from kroponer:

I have no insight into their strategy but it's plausible short calls in equity indexes would have been hard to handle in May. A 6% rally, low vix (low premium).
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I'm an option seller and May was my 2nd worst month in 3+ years.

Not sure what strategies they use but the SPY straddle got hammered to the upside in May.
 
I am focused on the ES and yes May was rough but I pretty agressively sold puts to help offset the calls and was long ES (mostly as day trades)cash much of the time as well as long call spreads (on the weeklys). Thats how I survived May with little damage.
 
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