Calls are much much more likely to expire worthless, than I am to generate profits directionally. They are out of the money when sold and when I sell I have evaluated the chart to determine that we have already had an upswing that may be tiring. Also, when I use the ratio call spread, I have a long call that will net money if the market continues upward for a bit. Net credit spreads or outright naked calls is clearly a very profitable strategy when done correctly.
ES Journal Archive (2006 - 2008)
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Calls are much much more likely to expire worthless, than I am to generate profits directionally. They are out of the money when sold and when I sell I have evaluated the chart to determine that we have already had an upswing that may be tiring. Also, when I use the ratio call spread, I have a long call that will net money if the market continues upward for a bit. Net credit spreads or outright naked calls is clearly a very profitable strategy when done correctly.
I will be watching this intraday reveral closely and will be entering long when I feel it's played out whether it's today , tomorrow, Monday etc. In the meantime of course, I will be watching the daily chart to see if more extended reversal is imminent. Right now, my bias is long and I have missed 20 points roughly while messing around with the day trading. Until further notice, I will be looking for a nice long entry for an extended gain.
very interesting. so you're saying one can either short outright or sell calls, but since options have time working against them, it is more advantageous to sell calls.
but selling calls limits potential gain. so my guess is that win% improves but payoff declines. what has your experience shown? i have not traded options before.
but selling calls limits potential gain. so my guess is that win% improves but payoff declines. what has your experience shown? i have not traded options before.
I probably make half my money in the options game. Using good directional analysis (ie not selling the calls when the market looks to be beginning an upside move) is nearly infallible. Even so, you have plenty of opportunities to get out. Also, remember that you have most likely been long for a while when you start selling the calls, so you have a deep cushion etc. Selling calls is one of the keys to the kingdom.
I got long a little on this pullback . I am long at 1300.25 with 5 units. My stop is 1256.50. I will look at lower levels to perhaps add positions. In any event, this is a longer term trade here. I will have to see the market give clear reversal signals on the daily chart or perhaps and hourly combined with signals from the daily before I short.
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