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Call option premiums
- Thread starter spreadem
- Start date
That's kind of an odd statement. Have you ever been the "specialist" to know this? Let me guess, you bought calls and lost money, hence somebody must have made money, most likely the specialist. Do what he does and you'll make money. Wouldn't that same logic seem to apply to doing buy/writes as well. It is a widely adopted strategy by many people. Why wouldn't you want to take the other side of those idiotic retail customers who just come in to sell calls blindly.Quote from indahook:
Put your stops in and sell the calls. Think about this for a moment, 90% of all option buyers are wrong. Why is that? Because who is usually on the other side of the trade, THE SPECIALIST. You can bet your bottom dollar he is not putting himself in the position of losing money. Don't ever bet against the house. Buying options is like flushing your money down the toilet.
Quote from Trajan:
That's kind of an odd statement. Have you ever been the "specialist" to know this? Let me guess, you bought calls and lost money, hence somebody must have made money, most likely the specialist. Do what he does and you'll make money. Wouldn't that same logic seem to apply to doing buy/writes as well. It is a widely adopted strategy by many people. Why wouldn't you want to take the other side of those idiotic retail customers who just come in to sell calls blindly.
I have lost money in every possible equity strategy. I would be lying if I said otherwise. But thats not why I made that statement. Most retail clients do not sell calls or puts. Simply put they are just not that savvy. They prefer to buy out of the money calls and hope for a move to make a huge % ROI. I have never been a specialist but I do know how to play the game. Do what the majority does not is my mantra. I will admit this, I have made boatloads of cash selling calls against my longs and selling puts against my shorts. The amount made on straight option purchases is dwarfed by comparison.
Okay finally got a fill back ... I sold an sp1010 call at 9.5. I couldn't get ten.
I chose the 1010 strike price because its just above today's highs; which may be the highs for some time. Let's see.
I wish I had sold a call during the morning run-up. Those same call blew up to 13.
I'll see how the position plays out over the next two weeks.
I chose the 1010 strike price because its just above today's highs; which may be the highs for some time. Let's see.
I wish I had sold a call during the morning run-up. Those same call blew up to 13.
I'll see how the position plays out over the next two weeks.
Quote from spreadem:
Okay finally got a fill back ... I sold an sp1010 call at 9.5. I couldn't get ten.
I chose the 1010 strike price because its just above today's highs; which may be the highs for some time. Let's see.
I wish I had sold a call during the morning run-up. Those same call blew up to 13.
I'll see how the position plays out over the next two weeks.
Good luck.
Quote from spreadem:
Okay finally got a fill back ... I sold an sp1010 call at 9.5. I couldn't get ten.
I chose the 1010 strike price because its just above today's highs; which may be the highs for some time. Let's see.
I wish I had sold a call during the morning run-up. Those same call blew up to 13.
I'll see how the position plays out over the next two weeks.
How does one hedge themselves when they write stock index options?
I agree, which is why I constantly tell people not to buy otm calls. People would be better off if they bought 1 or 2 itm calls rather than 10 otms. The point isn't whether selling or buying options is the best way to make money long term. 80% of the time it is better to be short premium. I would say that right now is one of those times when you want to be long. The prices are as cheap as they've been and we are as volatile as ever. The game is risk vs. return. Buying otm calls has a lousy ratio in this regard. Right now, long premium has the better one compared to short.Quote from indahook:
I have lost money in every possible equity strategy. I would be lying if I said otherwise. But thats not why I made that statement. Most retail clients do not sell calls or puts. Simply put they are just not that savvy. They prefer to buy out of the money calls and hope for a move to make a huge % ROI. I have never been a specialist but I do know how to play the game. Do what the majority does not is my mantra. I will admit this, I have made boatloads of cash selling calls against my longs and selling puts against my shorts. The amount made on straight option purchases is dwarfed by comparison.
I forgot to add that MMs will buy lots of premium, which was the whole point of my original post. It is a mistake to think that because a strategy of retail customers is a loser that the opposite is always a winner. Most of time this is true with otm calls, which I love to be short a lot of typically. However, it is possible to make money when long these as a mm. I could never do it consistently but some can.Quote from Trajan:
I agree, which is why I constantly tell people not to buy otm calls. People would be better off if they bought 1 or 2 itm calls rather than 10 otms. The point isn't whether selling or buying options is the best way to make money long term. 80% of the time it is better to be short premium. I would say that right now is one of those times when you want to be long. The prices are as cheap as they've been and we are as volatile as ever. The game is risk vs. return. Buying otm calls has a lousy ratio in this regard. Right now, long premium has the better one compared to short.