Anyone selling premium only

Quote from zdreg:

you are in luck nowadays. when capitalism reigned in the US it was shirt sleeves to shirt sleeves in 3 generations.

it is fun until you get a margin call which you obviously cannot meet. if you think this business is for fun you will soon be flipping hamburgers as a job , if you can get one.
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grandma grew up in the depression, lived like it her entire life, was still convinced she had no money in her 90's left us millions.

we maintain no debt on the commercial real estate, no debt on residential rentals, and no debt on personal residences. pay cash for regular cars honda/toyota.

if you live like my grandma you have no stress because money was a means to security not happiness. joy was knowing you didn't have to work as a slave to build someone else's wealth.

i don't drive a $80,000 car and i dress like i work in the fast food industry. expensive stuff attracts the wrong kind of people into your life.

if you don't have a passion for finance why engage in it? if its only for the money do something else.
 
Quote from metameta:

grandma grew up in the depression, lived like it her entire life, was still convinced she had no money in her 90's left us millions.

we maintain no debt on the commercial real estate, no debt on residential rentals, and no debt on personal residences. pay cash for regular cars honda/toyota.

if you live like my grandma you have no stress because money was a means to security not happiness. joy was knowing you didn't have to work as a slave to build someone else's wealth.

i don't drive a $80,000 car and i dress like i work in the fast food industry. expensive stuff attracts the wrong kind of people into your life.

if you don't have a passion for finance why engage in it? if its only for the money do something else.
More...
+1 on that.....
 
Quote from cdcaveman:

this thread is like so many before it... i've learned alot over the past year reading similar ones and researching from there..

i think there is sort of progression of trading that happens for the person coming into trading options...

you buy premium.. find out about what "theta is" lose money
you sell premium... either via naked puts or credit spreads..
you win alot.. then lose all your winnings back

you go back to the drawing board.. start reading about relative pricing, term structure, and just volatility arb in general.. .

being as it that you can't extract the implieds exactly from the realized when trading volatility you end up speculating in other risks..

i can not hide from risk... i can not get stuck just selling or just buying options because i limit my opportunity..

in essense you are always trading relative pricing... the implied volatility that you are buying or selling against what is realized.. being as it that you can not extract that purely like in a variance swap you are subject to hedging error. "Error" is just another source of risk and is speculated upon...

Hence the expression "gamma scalping"
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so you make all your money "gamma scalping" ?
 
Quote from metameta:

grandma grew up in the depression, lived like it her entire life, was still convinced she had no money in her 90's left us millions.

we maintain no debt on the commercial real estate, no debt on residential rentals, and no debt on personal residences. pay cash for regular cars honda/toyota.

if you live like my grandma you have no stress because money was a means to security not happiness. joy was knowing you didn't have to work as a slave to build someone else's wealth.

i don't drive a $80,000 car and i dress like i work in the fast food industry. expensive stuff attracts the wrong kind of people into your life.

if you don't have a passion for finance why engage in it? if its only for the money do something else.
More...

great to hear this story, thnaks
 
[Quote from cdcaveman:
there is an inherent advantage to selling index puts relative to single name puts.... there are alot of dead single names, and the index is price relatively higher then its constituents put together]

Is SUM of constituent IV not always > to Index IV ??
 
Quote from froluis:

[Quote from cdcaveman:
there is an inherent advantage to selling index puts relative to single name puts.... there are alot of dead single names, and the index is price relatively higher then its constituents put together]

Is SUM of constituent IV not always > to Index IV ??
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That's what i was trying to say on some of the individual names i sold puts on.

Then a few posts later someone said the exact opposite I don't know what to say to that.

If the data feed i have on IB is correct is was showing high teens/low twenty IV on large caps on very low teens IV on index like spy.

It's obvious there is an inherent advantage to selling puts on index in that you get instant diversification, liquidity, more flexibility in strikes, dates, etc..but I didn't see higher IV as one of them.

I was thinking the only advantage i get selling puts on individual names is pound for pound i'm being paid a little more for single name risk.
 
selling index volatility is more profitable than selling single name volatility because you are taking on an extra risk. you can call it tail risk, correlation risk, macro risk or whatever.

selling index vol (otm puts or calls or ats) is profitable. and not just in the "make a lot then blow up sense". this is something of an overblown meme (the whole black swan bulls**t or the BSBS). you will have drawdowns. but there is no law of nature that says you will eventually blow up. you might. but you can also lose all your money being long and the actual evidence (you know, real studies with actual numbers and stuff) points to the edge being with the shorts.

single names or the other hand are more mixed. there is some evidence of a volatility premium but it isn't as clear. and when selling cash secured puts or covered calls it is this premium that will make you profitable in the long run.
 
Quote from filthy:

selling index volatility is more profitable than selling single name volatility because you are taking on an extra risk. you can call it tail risk, correlation risk, macro risk or whatever.

selling index vol (otm puts or calls or ats) is profitable. and not just in the "make a lot then blow up sense". this is something of an overblown meme (the whole black swan bulls**t or the BSBS). you will have drawdowns. but there is no law of nature that says you will eventually blow up. you might. but you can also lose all your money being long and the actual evidence (you know, real studies with actual numbers and stuff) points to the edge being with the shorts.

single names or the other hand are more mixed. there is some evidence of a volatility premium but it isn't as clear. and when selling cash secured puts or covered calls it is this premium that will make you profitable in the long run.
More...

Hi

Edge being with the shorts could you explain?
 
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