I sold 10 SPY put contracts SZC OW

N

noob_trad3r

2.84 for a net of 2840 dollars. (March expiration) (commission is 9.99 + 75 cents a contract)

I have 75,000 dollars in my account for this trade in the event the stock is put on my trading account.

If the stock does end up in my account.

I will write covered calls on the SPY holdings.

I think I should do okay on this trade.

Worst case scenario I become owner of 1000 shares of SPY.
 
STEP 1

Sell high vol puts

STEP 2

Pray

STEP 3

Profit?

I remember when I sold some Nov SPY puts on Oct 10th. Mostly they decayed but on expiration day they were mildly in the money, massively ITM by 3PM and expired worthless at 4PM.

Good luck and enjoy the ride!
 
the market is WAY too oversold to be going short today imho.

Also, instead of tying up $75,000 of capital, you could have bought puts or just shorted ES futures and freed up $65,000 or so for other investments.
 
Quote from reno4nook:

the market is WAY too oversold to be going short today imho.

Also, instead of tying up $75,000 of capital, you could have bought puts or just shorted ES futures and freed up $65,000 or so for other investments.
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he's short a put ... its a 'long' play
 
Quote from reno4nook:

the market is WAY too oversold to be going short today imho.

Also, instead of tying up $75,000 of capital, you could have bought puts or just shorted ES futures and freed up $65,000 or so for other investments.
More...

He SOLD 10 Puts which is not the same as buying puts or shorting ES contracts.
 
Ok, I screwed up.

But my point was, if he's wants to go long there are a lot more efficient ways than tying up $75,000.


Buying a call or ES future would take much less bankroll
 
Quote from reno4nook:

if he's wants to go long there are a lot more efficient ways than tying up $75,000.


Buying a call or ES future would take much less bankroll
More...

Trading - especially options - involves more than using minimum cash. Obviously he wants to sell option premium, and not buy it.

Mark
 
Puts don't have the early assignment risk that calls have. Also out of the money options wouldn't be assigned early no matter what (probably :) ). I don't think you have to worry about it. I know you wouldn't have to keep that 75,000 on the side doing nothing for a whole month.

Just keep watching them and buy them back if the risk becomes more then you're comfortable with. I wouldn't sell naked puts as close to the underlying as you did but that's just me.
 
Your stike is a bit too close for my liking. I also would have waited to see what monday and possible tuesday bring before you sold them.
 
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