I told you guys...closing positions for a loss is for fools.

Wx actually knows better than he lets on,and to his credit,while he appears clueless as to managing risk,he is smart enough to only sell covered puts. At the end of the day,thats how he manages risk. And,if you have traded long enough,that approach will work till it doesnt,but it wont be financial Armageddon..

Wx real problem is he appears unteachable,and trades so conservatively that he will never feel real pain when he's wrong. He just sold a put or 2 into a 35% correction and learned nothing. Thats what happens when you dont take real pain.

Most learn more from their losses than their gains,assuming they dont repeat them and go the way of the dinosaur.

Selling cash secured puts and closing your eyes is a hobby at best..
 
taowave said:
Wx actually knows better than he lets on,and to his credit,while he appears clueless as to managing risk,he is smart enough to only sell covered puts. At the end of the day,thats how he manages risk. And,if you have traded long enough,that approach will work till it doesnt,but it wont be financial Armageddon..

Wx real problem is he appears unteachable,and trades so conservatively that he will never feel real pain when he's wrong. He just sold a put or 2 into a 35% correction and learned nothing. Thats what happens when you dont take real pain.

Most learn more from their losses than their gains,assuming they dont repeat them and go the way of the dinosaur.

Selling cash secured puts and closing your eyes is a hobby at best..
More...

I don't trade options, but if his short puts were 3 or 4 points ITM, why didn't he get assigned, aren't those American style options -- was it just luck or am I missing something?

And if he had been assigned, and if the stock had not rebounded, wouldn't he be long stock, in a 3+ point hole, and have capital tied up for who knows how long?

But on the flip side, if he had bought those puts back while the stock was on the way down, I assume the buy-back cost would have been significantly more than the premium he collected. In the past, I've been stunned at how fast the price of an option can increase once price starts moving against you, even on 0DTE options.

Isn't there a point of no return where you just say to hell with it and accept the possibility of assignment, as it might be better off to own stock that might eventually recover than to take a significant realized loss that you can never get back -- assuming you don't mind your capital being tied up?

Since I don't have a complete grasp of options, none of those questions may have made any sense. lol
 
Stock spiked frpm 15 up to 23.45 and he sold the 3/8 18 puts.
Stock immediately dropped over 35% to a low of 14.78.
He watched,ans seemingly sold a 15 put.
From the lows,the stock reversed and closed at 20.24 on expiry.
His puts closed OTM..

There is no right answer to your question,as long as you are selling cash secured puts..

He can afford to take massive drawdowns (percentage wise),because hes not in it to win it.
Hes smart enough to trade small enough,so he can sit there and do nothing..

If he ever ran a vol book,he would be scar tissue

ondafringe said:
I don't trade options, but if his short puts were 3 or 4 points ITM, why didn't he get assigned, aren't those American style options -- was it just luck or am I missing something?

And if he had been assigned, and if the stock had not rebounded, wouldn't he be long stock, in a 3+ point hole, and have capital tied up for who knows how long?

But on the flip side, if he had bought those puts back while the stock was on the way down, I assume the buy-back cost would have been significantly more than the premium he collected. In the past, I've been stunned at how fast the price of an option can increase once price starts moving against you, even on 0DTE options.

Isn't there a point of no return where you just say to hell with it and accept the possibility of assignment, as it might be better off to own stock that might eventually recover than to take a significant realized loss that you can never get back -- assuming you don't mind your capital being tied up?

Since I don't have a complete grasp of options, none of those questions may have made any sense. lol
More...
 
ondafringe said:
I don't trade options, but if his short puts were 3 or 4 points ITM, why didn't he get assigned, aren't those American style options -- was it just luck or am I missing something?

And if he had been assigned, and if the stock had not rebounded, wouldn't he be long stock, in a 3+ point hole, and have capital tied up for who knows how long?

But on the flip side, if he had bought those puts back while the stock was on the way down, I assume the buy-back cost would have been significantly more than the premium he collected. In the past, I've been stunned at how fast the price of an option can increase once price starts moving against you, even on 0DTE options.

Isn't there a point of no return where you just say to hell with it and accept the possibility of assignment, as it might be better off to own stock that might eventually recover than to take a significant realized loss that you can never get back -- assuming you don't mind your capital being tied up?

Since I don't have a complete grasp of options, none of those questions may have made any sense. lol
More...
 

My experience as a newbie who has been trading cash-secured puts and covered calls, for about two years, and certainly don't have a complete grasp of options. It's a complicated subject, and I'm afraid that I'm too old to learn many new tricks.

1. I trade about 15 major companies' stocks that have a long history of success. 97% of them pay dividends of 2% to 9%.

2. When I haven't closed a position that is 3-4 points ITM I take an assignment if it is a stock I don't mind holding for a while. Then try to sell covered calls. I seldom get assigned before expiration. If I don't want the stock, then I will roll the option out for a week and try to get a lower strike. This is normally done for about what is paid for buying back the option. These are mostly one to two-week expirations for small premiums but do produce significant income. I suppose this is akin to the Wheel Strategy. So far it is working.

There certainly have been stocks that were assigned that I would rather not hold, but that's part of it. My account is spread between several stocks and is such that I can hold the stocks as long as necessary. Also, they do pay dividends.
 
taowave said:
Wx actually knows better than he lets on,and to his credit,while he appears clueless as to managing risk,he is smart enough to only sell covered puts. At the end of the day,thats how he manages risk. And,if you have traded long enough,that approach will work till it doesnt,but it wont be financial Armageddon..

Wx real problem is he appears unteachable,and trades so conservatively that he will never feel real pain when he's wrong. He just sold a put or 2 into a 35% correction and learned nothing. Thats what happens when you dont take real pain.

Most learn more from their losses than their gains,assuming they dont repeat them and go the way of the dinosaur.

Selling cash secured puts and closing your eyes is a hobby at best..
More...
ondafringe said:
I don't trade options, but if his short puts were 3 or 4 points ITM, why didn't he get assigned, aren't those American style options -- was it just luck or am I missing something?

And if he had been assigned, and if the stock had not rebounded, wouldn't he be long stock, in a 3+ point hole, and have capital tied up for who knows how long?

But on the flip side, if he had bought those puts back while the stock was on the way down, I assume the buy-back cost would have been significantly more than the premium he collected. In the past, I've been stunned at how fast the price of an option can increase once price starts moving against you, even on 0DTE options.
Isn't there a point of no return where you just say to hell with it and accept the possibility of assignment, as it might be better off to own stock that might eventually recover than to take a significant realized loss that you can never get back -- assuming you don't mind your capital being tied up?

Since I don't have a complete grasp of options, none of those questions may have made any sense. lol
More...
taowave said:
Stock spiked frpm 15 up to 23.45 and he sold the 3/8 18 puts.
Stock immediately dropped over 35% to a low of 14.78.
He watched,ans seemingly sold a 15 put.
From the lows,the stock reversed and closed at 20.24 on expiry.
His puts closed OTM..

There is no right answer to your question,as long as you are selling cash secured puts..

He can afford to take massive drawdowns (percentage wise),because hes not in it to win it.
Hes smart enough to trade small enough,so he can sit there and do nothing..

If he ever ran a vol book,he would be scar tissue
More...


Well I don't know if I would call myself risk averse...I was down 150k on TWTR for about a year before paying off a second mortgage when it recovered from a buyout rumor. :)
That wasn't so much a technical trade as it was I figured it would be bought out at some point...turns out a rumour was good enough. Live by the sword and die by the sword though if you were around for the salesforce/google fiasco. That pre-market was a slaughter. Anyway, I am trying a different approach. I am not only trading 3 lots, I am trading 3 lots x multiple positions. Eventually I will increase to 5-10 lots.

Oh I also have dabbled in 100 contracts 0-3 dte.
 
Last edited:
Haywood said:
My experience as a newbie who has been trading cash-secured puts and covered calls, for about two years, and certainly don't have a complete grasp of options. It's a complicated subject, and I'm afraid that I'm too old to learn many new tricks.

1. I trade about 15 major companies' stocks that have a long history of success. 97% of them pay dividends of 2% to 9%.

2. When I haven't closed a position that is 3-4 points ITM I take an assignment if it is a stock I don't mind holding for a while. Then try to sell covered calls. I seldom get assigned before expiration. If I don't want the stock, then I will roll the option out for a week and try to get a lower strike. This is normally done for about what is paid for buying back the option. These are mostly one to two-week expirations for small premiums but do produce significant income. I suppose this is akin to the Wheel Strategy. So far it is working.

There certainly have been stocks that were assigned that I would rather not hold, but that's part of it. My account is spread between several stocks and is such that I can hold the stocks as long as necessary. Also, they do pay dividends.
More...

That was interesting. Thanks.
 
You dabble with 100 contracts??
As in short??
On what??

wxytrader said:
Well I don't know if I would call myself risk averse...I was down 150k on TWTR for about a year before paying off a second mortgage when it recovered from a buyout rumor. :)
That wasn't so much a technical trade as it was I figured it would be bought out at some point...turns out a rumour was good enough. Live by the sword and die by the sword though if you were around for the salesforce/google fiasco. That pre-market was a slaughter. Anyway, I am trying a different approach. I am not only trading 3 lots, I am trading 3 lots x multiple positions. Eventually I will increase to 5-10 lots.

Oh I also have dabbled in 100 contracts 0-3 dte.
More...
 
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