Am I to understand correctly you are hedging your make believe 50 naked puts on SPX with 3 short ES Contracts? Or have you already been blown off your trading plan and are now tick phucking ES intraday which has nothing to do with your plan to sell naked options? This is a comon mistake, abandoning plans at the first sign of volatility. I hope you do not assume you can catch a falling piano with a napkin (-3 ES versus -50 short puts, or as it seems -25 short puts and -25 put spreads).
Are naked puts really this safe????
- Thread starter RedDuke
- Start date
Am I to understand correctly you are hedging your make believe 50 naked puts on SPX with 3 short ES Contracts? Or have you already been blown off your trading plan and are now tick phucking ES intraday which has nothing to do with your plan to sell naked options? This is a comon mistake, abandoning plans at the first sign of volatility. I hope you do not assume you can catch a falling piano with a napkin (-3 ES versus -50 short puts, or as it seems -25 short puts and -25 put spreads).
he sold 50 lots front month 1150p @1.25 and now is trading @4.45.
the pseudo hedging taking place with 3 lots fut is just a way to magnify the risk while reducing overall expectancy, imho. obviously that resorting to this type of technique immediately after the initial short gamma position went dramatically against him indicates he lost his cool or was trading too much size. on the other hand, if his capabilities were so good picking direction on the underlying, why did he engage in short gamma positions in the first place?
lets see if the guy pulls out of this unscratched. i doubt it.
The 25 1125 puts have doubled and some but what about the 1150s you sold. And if I remember correctly you were short 50 1150s and bought 25 1125s. So if your 25 long 1125 have doubled and some the 50 1150s must be biting you in the ass or do they not count anymore.
Also, no posts state you closed any positions yet so you have not made any money on these options positions. So I assume the $30k is fantasy money. Lying does not make your losses smell less.
talking about ass, your head must be up in yours
if you folowed my log from the beginning I stated that I will be shorting SPU8 - see all the SPUB trades and chart I posted.
Many can talk but few can trade especially those who see doom and gloom in the markets every day, or wish it were so
Do you see the post of my overnight SPU8 trades?
and my post of short SPU8 this morning?
Do you see my post of short SPU8 trades yesterday? and the day before?
Ahh so now you are making money on ES trades not on short options. So as someone else said, why not stop all this BS about selling naked options to make money and just trade ES? Looks like you abandoned your trading plan real fast there....
Guys, you have a problem with me making a few $$? I am first and foremost an S&P and e-mini trade. I also trade options from time to time. I feel quite comfortable trading SPU8 short against a short SPX put position or SPU8 long against a short SPX call position. Here ARE my original posts:
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Jahajee
08-20-08 07:22 PM
Let's say you are writing naked SPY or SPX OTM puts.
For each put written, put in a stop order - ES or SP futures, that will kick in if the market tanks, especially during overnight session.
e.g. sell SPX 1220 puts
Put in a sell stop order at 1225 or 1230 etc; this value will be estimated based on the PUT strike. You can adjust the stop as time goes by.
Quote from MarkBrown:
and what will you do when your order is not filled on the hot knife thru butter? jump out the window?
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Sell Stop FUTURES, surely we can get a fill on SPU8 at 1225 or nearby, if markets tanks to this level, near to the PUT strike.
e.g sell SPX 1220 put; S&P futures is now at 1275; put in sell stop SPU8 at 1230
Quote from blackjack007:
ok smartass, why don't you implement this strategy and let us know how it turns out. start a journal please. you'll have a bite of humble pie within 3 months.
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Sell 50 SPTUJ @1.25 (September SPX 1150 puts)
Sell Stop SPU8 @1200
Will consider any of the the following, depending on market conditions:
- adjust sell stop SPU8 higher depending on possible rate of decline of SPX.
- sell more SPX naked puts if market goes above 1300
- sell SPX 1125 or 1075 puts if SPX approaches 1225
- buy back SPX 1150 puts & sell SPX 1225 puts if SPX moves up, a big range up day, to say 1350
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Now, go back and see my SPU8 charts and trades during the past few days. With 3-lot SPU8 positions I made almost 30k profit. True, not every week would be like this but my SPU8 day trading system just loved the action. Today, my option positions WERE up by almost $3,300. I made over $8,000 in SPU8 trades today. Did you catch my overnight trade? Go back to my posts yesterday and today and see for yourselves. Look at my chart attached.