Challenge

[cesfx]

Yes, the obvious one is about better commissions on the short naked put. As you don't own the stock you didn't have to pay commissions to buy it yet.

Another obvious one is the dividend paid on the stock on a covered call, in case it happens. As you own the stock, dividends may apply.

The not so obvious one could be about the margin required per day for the short naked put, you might exhaust your funds it not planned properly, hence the extra considered risk. This one would depend on the broker.

I would use a short naked put over a covered call in case I wanted to buy the stock at the strike price, and in case I wasn't forced to exercise it by the option buyer, I could farm some premium.

Thanks.
Not so sure about dividends, are they not priced in?
Margin, is it not the same?

I don't trade those anyway, just teasing. I read a thread from 2002 where they joked about it.
I prefer verticals and their relatives.

 

[wxytrader]

Nobody said that covered calls are safe on this thread. Just you mocking it.

Still waiting for an answer to a simple question, how are you managing your risk?

By managing risk, do you mean realizing losses? Then no, I don't do that. In my opinion, any strategy that involves closing positions for a loss will guarantee you lose money in the long term. At the very least, it won't perform any differently than if you just let everything run what you lose on the downside you will gain on the upside. That's the efficiency of a market.

 

[wxytrader]

I have a simple question to test basic knowledge.

Is there any PnL/payoff difference between a covered call and a short naked put?

Don't fall for these trick questions that D always comes up with... selling puts or selling calls have a higher chance of profit than buying puts or buying calls. That's the answer.

 

[wxytrader]

What if the stock tanks, way beyond any premium you might have received?
There's ALWAYS risk.

I told you I've run the numbers. Doesn't matter!

 

[vanzandt]

I told you I've run the numbers. Doesn't matter!

Can we get an example? I'm not following what you're saying. Ran what numbers?

 

[wxytrader]

Can we get an example? I'm not following what you're saying. Ran what numbers?

 

[vanzandt]

I ask a serious question, you provide a silly video. And one that was not even funny at that. If you're gonna make claims here, you need to back them up.

Now I have another question.... i just noticed this as I went back and read things.
The post you quoted (from me) earlier today that initiated my query above... that post:

What if the stock tanks, way beyond any premium you might have received?
There's ALWAYS risk.

Was to @Drawdown Addict. But you answered with:

I told you I've run the numbers. Doesn't matter!

You do realize having two id's here is a violation of @Baron's TOS.
Just thought I'd point that out. Not real smart on your part.

Now if you don't mind, answer my question, or you'll look doubly stupid.

 

[Overnight]

That's some OLD slang; Rat Pack vintage or so, if I'm not mistaken.

I heart you.

 

[Drawdown Addict]

Can we get an example? I'm not following what you're saying. Ran what numbers?

That guy is drunk, obviously. Weekend's posts...