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Are naked puts really this safe????
- Thread starter RedDuke
- Start date
Quote from JSHINV:
I haven't been on ET in a couple of weeks. But, in light of today's events, I thought I'd stop by this thread. I was wondering are those who were proponents of naked put sales, are you still proponents? Or even covered calls or cash secured puts? Don't get me wrong I love options. Use them all the time to hedge the underlying. Which for a trader like me they are best used for. Oh, I know what popular literature says, that covered calls are hedges. Not in my book.
Please see your question above (I have underlined it for you)
So yes I am still a proponent to cash secured puts. I guess my first answer didn't exactly spell it out for you verbatim.
You didn't underline "in light of todays events." which refered to 9/15/08. But, in fairness to you, if you are a proponent of cash secured puts after today's events 9/22/08, then yes, that does account for a good answer to my question because 9/22 reflects 9/15 very well. The other stuff in you post I had already responded in the thread, so I reacted in somewhat of an irritated manner - my fault.
You still then feel good about cash secured puts after today? And you responded you do. I don't know how you could. But, that is your business and if it works for you, great.
I don't like cash secured puts, covered calls or short uncovered puts even in an up market. This is the last market I'd want to do it in.
As far as I'm concerned you answered my question. No harm no foul.
You still then feel good about cash secured puts after today? And you responded you do. I don't know how you could. But, that is your business and if it works for you, great.
I don't like cash secured puts, covered calls or short uncovered puts even in an up market. This is the last market I'd want to do it in.
As far as I'm concerned you answered my question. No harm no foul.
Quote from jagmot:
Please see your question above (I have underlined it for you)
So yes I am still a proponent to cash secured puts. I guess my first answer didn't exactly spell it out for you verbatim.
Quote from JSHINV:
I don't like cash secured puts, covered calls or short uncovered puts even in an up market. This is the last market I'd want to do it in.
That's the beautiful part about using options. There are many strategies and anyone who suggests that a single strategy is best for everyone just doesn't get it.
If covered calls, or their equivalents, do not suit your comfort zone, there's no reason why it's not suitable for others.
If someone is a long-term stock investor and wants to accumulate stocks for a portfolio, then why not gingerly sell a few puts in this market?
As far as I'm concerned - and this is based on 32 years of trading options - over the long term there's only one thing that matters, and that's risk management. You can easily find one or two strategies that suit you, but it's not the strategy that makes the difference. It's your ability to not allow losses to overwhelm profits.
Mark
Quote from JSHINV:
You didn't underline "in light of todays events." which refered to 9/15/08. But, in fairness to you, if you are a proponent of cash secured puts after today's events 9/22/08, then yes, that does account for a good answer to my question because 9/22 reflects 9/15 very well. The other stuff in you post I had already responded in the thread, so I reacted in somewhat of an irritated manner - my fault.
You still then feel good about cash secured puts after today? And you responded you do. I don't know how you could. But, that is your business and if it works for you, great.
I don't like cash secured puts, covered calls or short uncovered puts even in an up market. This is the last market I'd want to do it in.
As far as I'm concerned you answered my question. No harm no foul.
Cool. Glad we figured it out... no harm no foul
I had missed your question as the markets were volatile and it didn't seem that anyone responded to your question.
Part of a good strategy is knowing when to make a trade and not to. People who think that making the trade month in month out no matter the circumstances of the market are going to get hurt. Also, this should not be your only strategy (and should not be the only market you play in). Sure the S&P 500 is diversified but you can also play this game in some of the commodities just be careful of correlation events (like in the past few weeks).
ps. Today was an ok day for option writing. I say this as vix was moving lower (until the end of the day)
Quote from jagmot:
Cool. Glad we figured it out... no harm no foul
I had missed your question as the markets were volatile and it didn't seem that anyone responded to your question.
Part of a good strategy is knowing when to make a trade and not to. People who think that making the trade month in month out no matter the circumstances of the market are going to get hurt. Also, this should not be your only strategy (and should not be the only market you play in). Sure the S&P 500 is diversified but you can also play this game in some of the commodities just be careful of correlation events (like in the past few weeks).
ps. Today was an ok day for option writing. I say this as vix was moving lower (until the end of the day)
Good point. For most of the day, puts were down EVEN AS THE MARKET MOVED LOWER AND LOWER. This was a good time to buy puts.
SPX 1150 to 1000 puts were lower even when SPX was down by over 15 points!
However, the markets broke down as the afternoon wore on and put and call premiums increased.
I have some additional information on the fund.
First of all, my decision was not to invest.
The fund took in a lot of additional capital, and unfortunately lost 20% within 1 week, more like in 2 days during last market turmoil.
According to someone whom I know personally and who is invested the the fund, investors who were in from the beginning of the year saw their 100% up for the year turn into 20% up for the year.
Thanks to all who contributed and still continue to contribute to this thread.
First of all, my decision was not to invest.
The fund took in a lot of additional capital, and unfortunately lost 20% within 1 week, more like in 2 days during last market turmoil.
According to someone whom I know personally and who is invested the the fund, investors who were in from the beginning of the year saw their 100% up for the year turn into 20% up for the year.
Thanks to all who contributed and still continue to contribute to this thread.