Are Option Sellers "Cheated"?

Thanks for the clarifications. If the terminology is referring to the same thing as in my mind, my understanding is telling me that the European cash-or-nothing ATM call should be for less than 50/100 (no carry). So I am either very wrong, or those market makers are cheating. :)
 
I am trading option profitably for 10 years and I quickly read the thread and believe me, it was like I am reading Chinese texts of 15000 years ago. Did not get even a bit of it. Are you guys talking about options? The only parts that I understood was the parts that the thread was hijacked to football (alias name of soccer). Now my prediction:
I think Germany will win Uruguay 3-2 and Spain will crush Holland 3-1.
 
Quote from tradingjournals:

Congrats! You sell premium?
More...

80% of the time I sell only on the stocks that I know and are not poised for a big volatilty like BP at this moment. If it goes against me, I shoot it to the next month getting more premiums. When the market crashes, I do risk reversal (Sell PUT and buy CALL). My performance YTD is 110%. In my 401K, I am down 10% as I cannot do almost anything.
 
Quote from tradingjournals:

Congrats! You sell premium?
More...

As I don't want to show myself my genious without any proof, I should say that I have sold straddle on TXN 25 for July (selling both PUT and Call for 25) collecting 1.43 premium. This Friday is the day.
 
Quote from hajimow:

80% of the time I sell only on the stocks that I know and are not poised for a big volatilty like BP at this moment. If it goes against me, I shoot it to the next month getting more premiums. When the market crashes, I do risk reversal (Sell PUT and buy CALL). My performance YTD is 110%. In my 401K, I am down 10% as I cannot do almost anything.
More...

Thanks for sharing. Your risk reversal is interesting and intriguing. Do you play them after the crash is "known", or during it/ towards the end of it? I like the short side of risk reversals (sell call, but put at split strikes) at start of crash, because puts benefit from both direction and volty. In recovery the opposite takes palce, the calls of a risk reversal gain from direction but fight volty. Could you say a few words on your risk reversal techniques? For instance, at what delta you buy your calls, and sell your puts, and when in the crash cycle you get in?
 
Quote from hajimow:

As I don't want to show myself my genious without any proof
More...
I am one of those who believe what people say, unless I have a proof to think otherwise. I believe that most people are good and honest at least most of the time. So feel free to share without proof, as you have at least one listener.
 
Quote from hajimow:

As I don't want to show myself my genious without any proof
More...
I am one of those who believe what people say, unless I have a proof to think otherwise. I believe that most people are good and honest at least most of the time. So feel free to share without proof. You have at least one listener.:)
 
Quote from tradingjournals:

Thanks for sharing. Your risk reversal is interesting and intriguing. Do you play them after the crash is "known", or during it/ towards the end of it? I like the short side of risk reversals (sell call, but put at split strikes) at start of crash, because puts benefit from both direction and volty. In recovery the opposite takes palce, the calls of a risk reversal gain from direction but fight volty. Could you say a few words on your risk reversal techniques? For instance, at what delta you buy your calls, and sell your puts, and when in the crash cycle you get in?
More...

As I said, I trade only on like 50 known stocks. I don't scan the market to find new stocks as I believe it does not make sense unless you have tons of money and you are out of ideas. You know that no one knows the end of crash but I do risk reversal when I say, "wow I cannot believe XXX has hit $X price. Say after a sustained days of decline, TXN goes to $23, and I know TXN has been trading between 24 to 26 and I am sure that they will come up with good results. Then I sell naked PUT 23 or 24 and buy Call 24 or 25. I establish 50% of my position there and if it goes against me, I add more to my position. Sometimes even if goes in my favor, I add to my position. The strike price that I sell, depends on my other positions. If I am too bullish on my other positions, I sell naked PUT 23 and if I have almost no position and can take more loss, I sell naked PUT 24. I don't sell any options at 0.05 or 0.1 (I used to do that but it was a big mistake).
Basically after being in the market for a while and trading on handful of stocks, I know their pulse and if they go against me I hang in there. I also take some money out of my account every month even if I don't need the money.
 
Quote from tradingjournals:

I am one of those who believe what people say, unless I have a proof to think otherwise. I believe that most people are good and honest at least most of the time. So feel free to share without proof. You have at least one listener.:)
More...

I also believe blogging or having a public journal or your trades makes you lose. Beling quiet is the best strategy.
 
You must log in or register to reply here.
Back
Top