How to trade volatility?

[silver182]

selling puts in a bull market is not being a contrarian, selling calls in a bull market now that would be a contrarian. i know a guy who has been selling calls on the sp for over 20 years and just managing the risk by rolling and hedging with long futures.

the volume of calls sold reflected a percentage of the huge long stock(s) positions he had. i know this method works because i was there the day he bought a 16 million dollar jet. if you have the capital to back your play this is the way to make money pretty risk free.

Selling Covered Calls in a bull market with huge portfolio(s) is not very risky..."just smart"..hey increases all dividends at a minimum...and if called use some freed up capital for buying a time machine. I suppose you are correct selling Puts in a bull market may not be contrarian...but "don't tell anyone" I've got to have buyers) I owned a time machine for many years although mine wouldn't fly at Jet speeds. Flying is in my blood as is trading.

 

[destriero]

Selling Covered Calls in a bull market with huge portfolio(s) is not very risky..."just smart"..hey increases all dividends at a minimum...and if called use some freed up capital for buying a time machine. I suppose you are correct selling Puts in a bull market may not be contrarian...but "don't tell anyone" I've got to have buyers) I owned a time machine for many years although mine wouldn't fly at Jet speeds. Flying is in my blood as is trading.

Covered calls = writing puts. The difference between calls and puts is shares. Let's not have every thread degenerate to options 101. Don't listen to MarkBrown; he's delusional, broke, and a f*cking moron.

 

[silver182]

Covered calls = writing puts. The difference between calls and puts is shares. Let's not have every thread degenerate to options 101. Don't listen to MarkBrown; he's delusional, broke, and a f*cking moron.

Covered calls = writing puts.
Looks to me like you missed something in your classroom studies...try that on the street and you will discover a difference...a big difference...In the short time I've taken time to comment on this blog...I have discovered there are very few helpful, experienced, knowledgeable, people here...sad

 

[destriero]

Covered calls = writing puts.
Looks to me like you missed something in your classroom studies...try that on the street and you will discover a difference...a big difference...In the short time I've taken time to comment on this blog...I have discovered there are very few helpful, experienced, knowledgeable, people here...sad

lol, please don't delete this. What pray-tell is the difference?

A short put is a synthetic buy-write. It's a component of the synthetic long in the reversal (reverse-conversion) arbitrage.

Long stock & short call = synthetic short put at strike x.

Short stock & short put = synthetic short call at strike x.

Short put/long call/short stock = reverse conversion.

Short call/long put/long stock = conversion.

Synthetic trading under shares -> reversal gains.

Synthetic trading over shares -> conversion gains.

Assumes carry at risk-free rate. No HTB condition.

x-strike is same for call and put.

Arbitrage 101.

 

[timbo]

Covered calls = writing puts.
Looks to me like you missed something in your classroom studies...try that on the street and you will discover a difference...a big difference...In the short time I've taken time to comment on this blog...I have discovered there are very few helpful, experienced, knowledgeable, people here...sad

Wow. @destriero is really trying to help you here.

 

[destriero]

Wow. @destriero is really trying to help you here.

lol he's beyond help.

 

[FibonacciNinja]

Covered calls = writing puts.
Looks to me like you missed something in your classroom studies...try that on the street and you will discover a difference...a big difference...In the short time I've taken time to comment on this blog...I have discovered there are very few helpful, experienced, knowledgeable, people here...sad

Irony... too... strong. Can't... process...

 

[destriero]

He also implied some dividend arb as if the div isn't priced into the combo. I cannot believe that people trade these products without any basic understanding of synthetics.

 

[destriero]

lol the dude will disappear. We need an RUOK welfare check for Hi Ho Silver.

 

[srinir]

lol the dude will disappear. We need an RUOK welfare check for Hi Ho Silver.

I thought he had $162 million portfolio at TDMA.