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Quote from lindq:

Read that sentence a couple times
Those who have traded options for some time will understand. Those who don't...well, they will learn in time :)
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While you could be right.....in TIME...those who traded options could make enough money that.... oh well...I guess it really didn't matter...:p point being that being right doesn't make you any money in the meantime. Whatever works.
 
Quote from rallymode:

I couldnt help but notice this so i will give you some nice weekend reading. Nothing wrong in leaning towards selling vs buying options just make sure its for the right reasons.
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Rallymode,

I appreciate this post and your previous post. Studying the concepts of your last post and reviewing the link in this post I am responding to will indeed have to be weekend endevour. I am tied up the most of the rest of the week.

By selling for the right reasons, I am assuming one of the wrong reasons would be selling options just becuase of fat premiums without any regard to implied volatility compared to statistical volatility. If implied volatility exceeded statistical volality and you expected it to come down closer to implied volatility, this may be a good time to sell.

Please feel free to critique my reasoning. In fact please do. This kind of feedback is helpful.

John

John
 
Quote from JSHINV:

Rallymode,

If implied volatility exceeded statistical volality and you expected it to come down closer to implied volatility, this may be a good time to sell.


John
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I meant to say and you expected it to come down closer to to STATISTICAL Volaltility.....

John
 
J:

I am coming to the thread a bit late.

I am thinking, for similar RRR, I could buy a condor and sleep better at night.

BTO JUL06 30 PUT
STO JUL06 35 PUT
STO JUL06 40 PUT
BTO JUL06 45 PUT

or, if I want a wider BE, I could consider a double calendar (a bit lower in RRR)

STO JUL06 35 PUT
BTO AUG06 35 PUT
STO JUL06 45 CALL
BTO AUG06 45 CALL

note: Calendar is not a good strategy because the IV is very high. An IV crash can decimate this trade.

Trading options is a lazy man's game. The less fuzz, the least exposure, the better.

p.s. in case you have not read the "Black Swan" event, here it is http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm
 
I am out of that short straddle of 7 calls and 7 puts I sold yesterday. I took the lazy way out. I took the $1500 gain and closed out the position. The credit yesterday was about $7700. Could have made more if I waited - I think. But, it would have been more work while I adjusted. That's why I say the lazy way. The calls and the underlying dropped like a rock, because the CEO is resigning. I probably won't trade again until the begining of next week - no time. Also with my work demands selling now takes away the need to adjust and I would have had definetely had to do that, especially with the stock taking a nose dive. BTW the stock is Nutrisystems. NTRI. I had no underlying position.
 
Quote from JSHINV:

I am out of that short straddle of 7 calls and 7 puts I sold yesterday. I took the lazy way out. I took the $1500 gain and closed out the position. The credit yesterday was about $7700. Could have made more if I waited - I think. But, it would have been more work while I adjusted. That's why I say the lazy way. The calls and the underlying dropped like a rock, because the CEO is resigning. I probably won't trade again until the begining of next week - no time. Also with my work demands selling now takes away the need to adjust and I would have had definetely had to do that, especially with the stock taking a nose dive. BTW the stock is Nutrisystems. NTRI. I had no underlying position.
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I said I sold, today, I meant bought to close of course.
 
Quote from JSHINV:


By selling for the right reasons, I am assuming one of the wrong reasons would be selling options just becuase of fat premiums without any regard to implied volatility compared to statistical volatility. If implied volatility exceeded statistical volality and you expected it to come down closer to implied volatility, this may be a good time to sell.
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No. Selling for the wrong reason is selling to capture premium, without careful regard for your predicted DIRECTION of the underlying, and your desire and ability to own the underlying if the trade runs against you. You don't appear to comprehend this issue of directional bias. It by far exceeds the importance of calculating volatilities.

But when you start selling naked, it will hit you right upside the head and you won't forget it while you are spending the next few months rolling out of a position that ran against you, and you are holding something you never intended to be holding in your account. And all this for a few dollars of premium.

A truly wonderful strategy for masochists.
 
Quote from JSHINV:

BTW the stock is Nutrisystems. NTRI. I had no underlying position.
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Do you use PowerOptions to find your picks? Just wondering because I've seen KCI and NTRI listed there with fat premiums.
 
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