Beginner in selling Bull Put Spread
- Thread starter Megane
- Start date
I guess, bullish was the way to go !
Ironchef, since you are doing only exclusively options since 2013, how's that working out for you? Talk about new, I am only doing Options since May 2017, so I am very, very new compare to you. I asked because this is what I am doing now too and want to know how you are doing. Do you buy deep ITM option or just any option? Thank you in advance.
Thank you for asking.
I started trading options in early 2013 after watching tastytrade and for about 6 months, mechanically selling covered calls and cash secured puts. Net result: After a few thousand trades (real trades, not sim or paper), no gains (somewhat worst than buy and hold the underlying). In other words, I proved that the market in options was quite efficient and there was no free lunch.
Since then I do both long and short, going from ITM to ATM to OTM depending on my opinion of the underlying. Whether I can make money depends on how correct is my opinion compare to my counter party. There is no win/win in trading, only win/lose.
I used to trade DITM but not anymore. DITM is like buying the underlying on margins, you just have to see whether the premium is more/less than the margin interest and options expiration replaces the risk of margin call.
With the exception of the first 6 months, I am happy with the way things turned out. But, I won't confuse the bull market with my trading skill. In this raging bull market a monkey can be a trading genius if he mainly goes long.
Good luck to you.
Yes, good for you.I guess, bullish was the way to go !
Ironchef, I am using tastytrade too 
. I was doing the vertical at first but now I just use options as a mean to leverage to trade stocks like Tesla. I still have a lot to learn especially with emotion, greed has turned 1 of my trade from big success to big disaster. Live and learn right?
Thank you again for your input and good luck to you as well.
. I was doing the vertical at first but now I just use options as a mean to leverage to trade stocks like Tesla. I still have a lot to learn especially with emotion, greed has turned 1 of my trade from big success to big disaster. Live and learn right?Thank you again for your input and good luck to you as well.
Welcome to the club. My TEVA call option went from up >100% to expired worthless, so it is not just you.Ironchef, I am using tastytrade too
Thank you again for your input and good luck to you as well.
However, I just entered for another TEVA call as my opinion has not changed.
Regards,
Ironchef, I am using tastytrade too
Thank you again for your input and good luck to you as well.
I will always have a short that caps my profits for exactly this reason. Market Maker thinks he duped me into selling a .01 contract (which will actually cost me after commission and exchange fee)--in reality, he purchased my greed.Welcome to the club. My TEVA call option went from up >100% to expired worthless, so it is not just you.
However, I just entered for another TEVA call as my opinion has not changed.
Regards,
You are right Mr. beer, excellent points. We options traders always struggle to balance risk/reward. I choose not to limit my potential gain in case my guess turns out to be right.
Regards,