Are there advantages to selling calls at several strike prices?

[destriero]

Don’t listen to scat. He’s an idiot.

CC are equivalent to short naked puts. If you want max sensitivity to vol (Vega) then the only answer is ATM for the lot. Why guarantee an assignment for small change? Look at the April series w/o considering your current position… would you short the n-put outright if you didn’t own XOM?

Owning 100 XOM and shorting the 120C is the same as shorting the 120P alone. Look at the opposing put for every call you’re looking to short as it will give you the extrinsic premium you’re booking at current marks.

 

[destriero]

No matter how you slice it... there isn't much you can to do significantly enhance your returns beyond "capturing the premium from the covered call write". Might as well just KISS, baby!

Word salad. Logorrhea.

What CC write? A strip of strikes as the OP suggests is a CC. You don't suggest anything. You have no expertise. You're just here.

 

[MathTeacher]

Don’t listen to scat. He’s an idiot.

CC are equivalent to short naked puts. If you want max sensitivity to vol (Vega) then the only answer is ATM for the lot. Why guarantee an assignment for small change? Look at the April series w/o considering your current position… would you short the n-put outright if you didn’t own XOM?

Owning 100 XOM and shorting the 120C is the same as shorting the 120P alone. Look at the opposing put for every call you’re looking to short as it will give you the extrinsic premium you’re booking at current marks.

Sorry, I lost you at some points. I will look at the calls and opposing puts.
Basically, you are saying ATM is the way to go.
That sounds good considering I can't decide on a direction for XOM.
I do know that after XOM hits an all time high it tends to retreat a lot in a small period of time.
I just want to do something other than watch XOM go down...

 

[MathTeacher]

Maybe I should just buy some protective puts.
Next week is a plethora of data/inputs
XOM earnings
OPEC meeting
Fed meeting
Employment data
Tanks in Ukraine

 

[MathTeacher]

If XOM blows out earnings and goes to 120-123 I'll sell OTM calls for 2/17
Keep a tighter time frame

 

[destriero]

Maybe I should just buy some protective puts.
Next week is a plethora of data/inputs
XOM earnings
OPEC meeting
Fed meeting
Employment data
Tanks in Ukraine

Shares + married puts = synthetic long call at strike.

Shares + 110 puts - 120 calls = synthetic long 110/120 call spread.

If you don't mind incurring some upside risk you can sell two calls at say the Apr 125 strike. Long 100 XOM and short 2 calls = short the synthetic 125 straddle. The trade is looking for a touch of 125 on the forward (neutrality/pin). As a rule, I would only do so if you're generally neutral to bullish on the shares.

 

[destriero]

If XOM blows out earnings and goes to 120-123 I'll sell OTM calls for 2/17
Keep a tighter time frame

You shouldn't time the short vol here. You don't understand the nuances. I have XOM vols dropping 2 points (30 to 28) after earnings. XOM drops? Vol will hold up but you're down on shares. Then you're going to short a contract with less than 3 weeks to exp. You went from April (vol-sensitivity) to shorting Feb (gamma risk) after the IV drops.

 

[smallfil]

Maybe I should just buy some protective puts.
Next week is a plethora of data/inputs
XOM earnings
OPEC meeting
Fed meeting
Employment data
Tanks in Ukraine

Buying a protective put makes sense when you have huge gains to protect. By way of example, you buy a stock $60 and now it has run up to $100. The near term $100 put option is selling for $500. You have a paper gain of $4,000 and insuring getting out in the next month at $100, you pay the $500 put premium. If you stock say suddenly, drops to $80, you are still able to sell your shares at $100, come hell or high water. On the other hand, if they stock rallies even stronger to say $150, you have even larger gains to protect. You can now buy the $150 put, assume it costs $650 for the next month and sell whatever residual value is left of the $100 put option. The put option is your insurance but, it costs monies and part of your profits. However, you can always sleep like a baby even if you are long your positions knowing a put option will protect your position.

 

[MathTeacher]

Not only do I not understand the nuances... I don't understand a lot of what you are talking about. I also do not think I'm approved for option trading straddles. Sorry, I'm a beginner, a lot of the vocabulary and abbreviations you are using is over my current knowledge. All I have done in my options trading experience is sell covered calls (mostly), bought a few calls and sold a few puts. I have been reading a lot about options trading. I just joined Elite Trader today.

 

[MathTeacher]

Buying a protective put makes sense when you have huge gains to protect. By way of example, you buy a stock $60 and now it has run up to $100. The near term $100 put option is selling for $500. You have a paper gain of $4,000 and insuring getting out in the next month at $100, you pay the $500 put premium. If you stock say suddenly, drops to $80, you are still able to sell your shares at $100, come hell or high water. On the other hand, if they stock rallies even stronger to say $150, you have even larger gains to protect. You can now buy the $150 put, assume it costs $650 for the next month and sell whatever residual value is left of the $100 put option. The put option is your insurance but, it costs monies and part of your profits. However, you can always sleep like a baby even if you are long your positions knowing a put option will protect your position.

That is my understanding of the buying of a put option for my position. I have 500 shares of XOM that I bought at about 60.