Covered call investor

I always infer cash secured when you have the money to back up being put the security.. "naked" obviously infers you you can't cover.... you can't get as easily caught with your pants down if your covered..
So when I say naked I mean it ..
I know what a replicated put is... but my opinion still stands
In the long run I'd rather have a diversified portfolio of short cash secured puts and long equities. Then a large book of covered writes
 
Quote from atticus:

This thread is an IQ test. Selling a 1 lot in SPY 140 puts is the same as the 140 CC (using mid).
More...
No one is arguing that... :)

No matter what they are different expressions on distribution...
 
Quote from cdcaveman:

I always infer cash secured when you have the money to back up being put the security.. "naked" obviously infers you you can't cover.... you can't get as easily caught with your pants down if your covered..
So when I say naked I mean it ..
I know what a replicated put is... but my opinion still stands
In the long run I'd rather have a diversified portfolio of short cash secured puts and long equities. Then a large book of covered writes
More...

Everyone else uses naked to mean that they aren't hedging their option position. A naked short put means you aren't short stock with it. No one uses the terminology to reflect ones ability to absorb an assigmnent.

And one can blow up with a covered. You can buy 2x in a reg-t account and the stock can fall 60%.
 
OK... page 385 & 386 section 18.3 Equity options Volatility smile sometimes referred to as volatility skew.
"The volatility decreases as the strike price increases. The volatility used to price a low strike price option (i.e. , a deep out of the money put or deep in the money call) is significantly higher then that used to price a high strike price option (i.e., a deep in the money put or deep out of the money call)
The volatility smile for equity options corresponds to the implied distribution

i have no problem being wrong about anything.. and i obviously wouldn't enter an IQ contest with this being the subject matter to win any money haha.. but if the smirk/smile implies a heavier left tail distribution selling otm puts will return higher amounts of money related to otm calls that is if your view on the future distribution is correct and the heavy tail isn't realized..

and i know you could argue that selling deep itm calls against stock would yield the same result as selling otm puts.. but who does that.. you can express it the same way with one sale of a put...
 
and i didn't know people used Naked to referred to unhedged.. i see what your saying about the leverage comments from earlier now..
 
Quote from newwurldmn:

Everyone else uses naked to mean that they aren't hedging their option position. A naked short put means you aren't short stock with it. No one uses the terminology to reflect ones ability to absorb an assigmnent.

And one can blow up with a covered. You can buy 2x in a reg-t account and the stock can fall 60%.
More...

Thank you. These discussions always lead to confusion because the word "naked" is not properly defined. Hell, I wouldn't even care if the poster improperly defined it, as long as they said what they meant by "naked." It's the same problem with the word "spread" . A spread can be any difference. So unless what you mean by "spread" is clear from the context you had best define the particular difference you are talking about from the outset. A lot of confusion could be avoided that way.

So thank you very much!
 
Quote from cdcaveman:

OK... page 385 & 386 section 18.3 Equity options Volatility smile sometimes referred to as volatility skew.
"The volatility decreases as the strike price increases. The volatility used to price a low strike price option (i.e. , a deep out of the money put or deep in the money call) is significantly higher then that used to price a high strike price option (i.e., a deep in the money put or deep out of the money call)
The volatility smile for equity options corresponds to the implied distribution

i have no problem being wrong about anything.. and i obviously wouldn't enter an IQ contest with this being the subject matter to win any money haha.. but if the smirk/smile implies a heavier left tail distribution selling otm puts will return higher amounts of money related to otm calls that is if your view on the future distribution is correct and the heavy tail isn't realized..

and i know you could argue that selling deep itm calls against stock would yield the same result as selling otm puts.. but who does that.. you can express it the same way with one sale of a put...
More...

still waiting to hear if i'm wrong?
 
You must log in or register to reply here.
Back
Top