Coverd calls

[met1989]

hello
I’m looking to sell a covered put OTM the problem is that even though I’m confident that the market won’t hit the strike price the problem is the time decay in between is there anyway to mange that risk ? To look for something in the Greek numbers ? Would love for some input THansk

 

[JSOP]

Didn't you just create this thread https://www.elitetrader.com/et/threads/premium-strategy.327331/ two days ago about the same question and somebody already told you what you need to do?

Read this thread:

https://www.elitetrader.com/et/threads/writing-options-for-a-living.53037/

It is free, no need to buy a book. And if I were you, I pay attention to Maverick74's posts.

You already received your inputs. The greek numbers are all discussed in that other elite trader thread mentioned in the quote above which I will state here again: https://www.elitetrader.com/et/threads/writing-options-for-a-living.53037/. Did you go through it?

 

[met1989]

Didn't you just create this thread https://www.elitetrader.com/et/threads/premium-strategy.327331/ two days ago about the same question and somebody already told you what you need to do?



You already received your inputs. The greek numbers are all discussed in that other elite trader thread mentioned in the quote which I will state here again: https://www.elitetrader.com/et/threads/writing-options-for-a-living.53037/. Did you go through it?

I have opened in the past days a few threads regarding other strategies thanks I’ll check it out

 

[JSOP]

I have opened in the past days a few threads regarding other strategies thanks I’ll check it out

Please do. I am sure you will find your answers there.

 

[met1989]

Please do. I am sure you will find your answers there.

so after working and wasting a few hours this is what i was looking for i think the covers gives me a nice return if it expires out of the money and the risk is built for my heart rate what do you think?

 

[JSOP]

so after working and wasting a few hours this is what i was looking for i think the covers gives me a nice return if it expires out of the money and the risk is built for my heart rate what do you think?View attachment 195147

I thought you are looking for Greek numbers to explain how you cover risk before theta kicks in. This thread https://www.elitetrader.com/et/threads/premium-strategy.327331/ will explain it for you. Did you go through it? If you think studying about options is wasting hours, then maybe you shouldn't be trading options.

hello
I’m looking to sell a covered put OTM the problem is that even though I’m confident that the market won’t hit the strike price the problem is the time decay in between is there anyway to mange that risk ? To look for something in the Greek numbers ? Would love for some input THansk

.

 

[met1989]

I thought you are looking for Greek numbers to explain how you cover risk before theta kicks in. This thread https://www.elitetrader.com/et/threads/premium-strategy.327331/ will explain it for you. Did you go through it? If you think studying about options is wasting hours, then maybe you shouldn't be trading options.



.

this is what i was looking for cause in the long run i believe the market is going up but i cant wait 30 days and have a -4000$ in my account even though i know that it won't reach it and also if it was reaching it i still can sell it so that's it do you have any better ideas how to slow down the daily decay?

 

[JSOP]

this is what i was looking for cause in the long run i believe the market is going up but i cant wait 30 days and have a -4000$ in my account even though i know that it won't reach it and also if it was reaching it i still can sell it so that's it do you have any better ideas how to slow down the daily decay?

You need to study the option greeks then you would know the answer to that question.

 

[met1989]

You need to study the option greeks then you would know the answer to that question.

im getting to it i have much more knowledge today and every day im learning more, but what do you thing of that set up? above

so after working and wasting a few hours this is what i was looking for i think the covers gives me a nice return if it expires out of the money and the risk is built for my heart rate what do you think?View attachment 195147

 

[TheBigShort]

Well let's break down if this set up makes sense to trade.
"Im confident the market won't hit the strike price" <- ??
"Nice return if it expires OTM" <- ???
"Managing time decay in between" <-????????????

So far I am confused on all 3 points.
1) Why are you confident? Confidence does not make money.
2)Nice return? If 400 is a nice return, you are probably trading a 10k - 40k account. What the heck are you doing risking 10k without having any knowledge of hedging?
3)This statement did not make any sense.

All in all, before you put on that trade, you should change your sources of options education. Start by reading the classics. Natenburg/Sinclair/Baird. Then start diving into stats. As someone on this forum once told me "Knowing stats/programming does not give you an edge. Not knowing them gives you a negative edge". Not trying to be rude, I am trying to save you money . Good luck