Quote from osho67:
Thanks for your input.
I only know to trade options - spreads, iron condors , covered calls. I donot know what to trade for comparatively low risk. In order I can survive I keep my cushion level at 70% in my portfolio margin a/c.
Please tell us what can we do? I seriously want to find alternatives,
You didn't mention selling naked puts. I assume it's because you feel it's too risky, or you have not received approval from your broker.
As a "potentially safer" alternative to selling naked puts, may i suggest you consider adding a "buy/write" strategy to those you've listed above.
A buy/write has the same advantages and benefits as selling naked puts, in that you get to select the strike, the otm safety cushion, the credit (debit), the annualized % return, the risk/reward, the probability of success, your break even price, and so on..... all before you initiate the trade.
Just like selling a naked put.
The reason I say it's a "potentially safer" alternative to selling a naked put, is because you can sell far more contracts via naked puts, than you actually have cash for, and you are not charged any margin interest.
Thus, there is a HUGE "temptation" to over leverage when selling naked puts.
With a buy/write strategy, you will be charged margin interest daily, on any borrowed cash you use for additional contracts.
That tends to keep investors from over leveraging their accounts, as readily as they might selling naked puts.
Thus, if you are not planning to go on margin, or if you do not have level 3 approval of your account to sell naked puts,.... then doing a buy/write has all the same benefits and advantages of selling naked puts, without the risky temptation to over leverage your account.
If you are not familar with how to set it up, have your broker walk you through it the first few times, as there is a slight learning curve involved. And of course, ask you questions here as well.
