Quote from Uncle_Ho:
I think its funny that people try to equate selling puts as the same as being long a stock. It is if you sell the put short term, but most people play the experation game, selling puts untill they go to zero. Yes selling a put will give u a delta usually a percentage of being long a certain amount of shares, but that delta changes, especially close to expiration. Puts that are cheap, like the OTM ones, will USUALLY go to zero, but you have to sell many of them if you're wanting to make real money. Even if you sell put spreads to lessen your risk, you always are looking at a senario which risks way more than you're willing to make. Owning a put means that you get more and more long as the price starts to go down. Many people I know make a lot of money using stratagies of selling calls and puts, and sitting on them. Yes many of these plays are (RISK 10 units, REWARD 1 unit), and the key to making money playing this game, is making 10 times so that you can afford to get burned 1 time. Many people I know still haven't been burned and continue to make money, but sometimes that one time can make up for all of the money you've ever made. From my limited experience, I suggest that you never stay naked short calls or puts, unless you're willing to take the risk of the 1/1,000,000 chance happening.
