Closing naked put positions

<<< It has started with nitpicking over what "out of the money" means. LOL. It's really not worth wasting my time on. >>>


We are in agreement, regarding his "nit picking" over the meaning of what OTM means.
Not all OTM questions deserve the same standard answer.
My reply was relative to the "context" of the question asked.

If there were 10 weeks remaining on a contract vs 10 days, I would have given the same answer as dagnyt.
But the question was about 10 days.

I'm puzzled as to why % OTM is irrelevant to dagnyt, and why he's offended that I might give a different response to a deal 10-15% OTM vs 30%.
Hence the reason I sought clarification of how the questioner defined way OTM, given that it was just slightly OTM when he initiated it.

I also sought clarification as to what type stocks he traded, relative to industry, volatility, ect....
These are not irrelevant questions.
Giving the same "buy it back" reply for all stocks, regardless of % OTM, history of volatility, type of industry, amount of cash at risk, ect.... is not very useful.
I simply think treating all deals the same, with just 10 days remaining, regardless of any other criteria, other than locking in 85% of the premium, is questionable.

Put_Master
 
selling naked options on a continuous basis puts you in the insurance business. warren buffett is in the insurance business.
the option market makers are in the insurance business.

your competitors and the market will eventually wipe out your capital.
 
Quote from KINGOFSHORTS:

I close out my positions once I am satisfied with my profit, usually buy to close for like 10-20 cents
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"satisfied with your profit"
this a losing philosophy towards the market. that is not a reason to close your position.
 
Quote from Put_Master:

You mentioned your stocks are "quality" companies.
My definition of a quality company is one without excessive debt, good cash flow, somewhat predictable earnings, less than 12% of shares being shorted, they have a history of paying their bills in a reasonably timely manner, inventories and receivables are trending in the right direction, ect.....
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Are the companies you say are financially healthy in the same kind of financial health that the home builders were in 2007 when you sold naked puts on them and took a beating, or are the companies you say today that are financially healthy in the same kind of financial health as when you said about the banks and the mortgage companies before you shorted naked puts and shorted put spreads in those companies in early 2008?

It’s a pretty straight forward question, how will you chose to duck it?
 
Quote from Bruce_Follick:

Are the companies you say are financially healthy in the same kind of financial health that the home builders were in 2007 when you sold naked puts on them and took a beating, or are the companies you say today that are financially healthy in the same kind of financial health as when you said about the banks and the mortgage companies before you shorted naked puts and shorted put spreads in those companies in early 2008?

It’s a pretty straight forward question, how will you chose to duck it?
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it is not a straightforward question unless u prove the home builders were healthy companies in2007.
 
Quote from spindr0:

Write June puts
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Exactly...I have one stock that I sell calls on and often when it has gotten FOM 2+ weeks to expiration I re-evaluate and depending on my opinion of the underlying I will often buy back the calls and re-sell lower same month or 1 month out. Again it depends on your take of the underlying and what it will do. Remember TIME is money!

edit..oh god is Put Master RFT:confused:
 
Quote from RichardRimes:

[edit..oh god is Put Master RFT ?
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No, Putzi is an internet troll who lives on the Yahoo. He throws a hissy fit and goes all cry baby when other people correct his misinformation. You see his deals are a joke anyway since when all his 2007 and 2008 naked puts blew up he just kept changing names and forgot all about those real time deals which were only real time in Disney Land. You're in for a real treat if he moves here!

RFT was the other troll there with multiple handles with no life.
 
Bruce, anyone who thinks home builders, banks and other financial stocks, are examples of financially healthy companies, should NOT be selling naked puts.
I would recommend put spreads for those type industries if that's the direction you want to go.

Put_Master
 
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