VIX at 5 years low, would be stupid not to cash in my chips and go home. Wait for the next run.
I closed out all my short put positions.
- Thread starter noob_trad3r
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Never a bad idea to lock in a profit.
But without knowing what the stocks were, what your optionj strategy was, what the strikes were, what kind of an otm safety cushion you still had on them, how much money you left on the table, or when the date(s) of their expiration were,.... I'm not sure what your point is in sharing your statement.
As there is really nothing to discuss.
But without knowing what the stocks were, what your optionj strategy was, what the strikes were, what kind of an otm safety cushion you still had on them, how much money you left on the table, or when the date(s) of their expiration were,.... I'm not sure what your point is in sharing your statement.
As there is really nothing to discuss.
"I closed out all my short put positions."
I'm confused by the double negative. Did you buy puts to short the stock? Or did you sell (short) the puts with a bullish/neutral outlook on the stock?
I'm confused by the double negative. Did you buy puts to short the stock? Or did you sell (short) the puts with a bullish/neutral outlook on the stock?
A agree with the VIX being so low, that it may be a sensible trade.
But I also think it depends on what the stocks are, what sector they are in, what the strike is, how deep is your otm safety cushion, how strong is the tech support, ect....
The only reason i would go to cash, is because I can't find any trades that meet my criteria.
I have to wonder if he got scared out of the market because of some talking head on tv, or some article he read.
For me, the lower the market goes, the better the price value of stocks, the more bullish I become.
well.. my thoughts are... that if your gonna be long and stay long through this period.. your better off doing it by buying premium rather then selling it.. its cheap... its just a matter of principle.... and of course we are about to get into a discussion of generalities again.. but generally premium should be bought cheap and sold when it is overpriced... Putty man do you consider the implied verse historical vol of the stocks you sell puts on? is this a consideration.. because i know you sell premium mainly and have the fundimentals of the companies, mean reversion, and the long term investor ideology to fall back on when you end up with the stock... but do you ever consider looking more in detail into the actual options your selling ... cause i know you look deeply into the fundimentals of the companys you sell puts on..
To answer you question:
I'm not buying premium just because it's cheap. Nor am i selling premium just because it's expensive.
Depends on the trade I'm considering. There are plenty of deals I evaluate on a daily basis that have very good premiums, but upon examining the stocks, I end up deciding I'm not going anywhere near those stocks.
The only thing cheap premium says to me is,.... if I were long stocks, it's cheap to buy insurance for them.
But I'm not getting in or out of the market just because premium is cheap or expensive.
As for whether i consider implied vs historical IV..... NO.
Unless you go back and review what the market was doing when the historical was high or low, or what the specific news surrounding the stock and/or sector was 1 - 2 years ago, and so on, then what's the point?
If you are just comparing numbers, but not CONTEXT,.... then you are not a thoughtful investor. You are a lazy simplistic investor.
I deal with the option market, based on the reality that it currently is. Not the fantasy I wish it to be.
If a stock I'm considering meets my fundamental and technical criteria, as well as the minimum annualized % return I would normally accept, for the strike and % otm safety cushion I desire,.... then I'm going to invest in it, regardless of what the VIX is and regardless of what the IV is compared to its historic.
I would LOVE if the VIX were back in the 20's, 30's or 40's before investing.
But again, I deal with the market as it is, not the fantasy I desire.
If the VIX and IV are too low to offer the strikes, credits and otm cushions I desire, then I simply don't do that specific deal until it does. But I'm not getting out of the market if there are still trades that do meet my criteria.
I'm not buying premium just because it's cheap. Nor am i selling premium just because it's expensive.
Depends on the trade I'm considering. There are plenty of deals I evaluate on a daily basis that have very good premiums, but upon examining the stocks, I end up deciding I'm not going anywhere near those stocks.
The only thing cheap premium says to me is,.... if I were long stocks, it's cheap to buy insurance for them.
But I'm not getting in or out of the market just because premium is cheap or expensive.
As for whether i consider implied vs historical IV..... NO.
Unless you go back and review what the market was doing when the historical was high or low, or what the specific news surrounding the stock and/or sector was 1 - 2 years ago, and so on, then what's the point?
If you are just comparing numbers, but not CONTEXT,.... then you are not a thoughtful investor. You are a lazy simplistic investor.
I deal with the option market, based on the reality that it currently is. Not the fantasy I wish it to be.
If a stock I'm considering meets my fundamental and technical criteria, as well as the minimum annualized % return I would normally accept, for the strike and % otm safety cushion I desire,.... then I'm going to invest in it, regardless of what the VIX is and regardless of what the IV is compared to its historic.
I would LOVE if the VIX were back in the 20's, 30's or 40's before investing.
But again, I deal with the market as it is, not the fantasy I desire.
If the VIX and IV are too low to offer the strikes, credits and otm cushions I desire, then I simply don't do that specific deal until it does. But I'm not getting out of the market if there are still trades that do meet my criteria.
WE ARE PANICKING PLUNING!!!