Is the answer right now to be.... selling puts???

S

SoyUnGanador

Markets are WAY down. Pain and panic is everywhere. Are selling puts right now the right move? Sure, some of you are predicting a crash worse than the great depression, but that seems a little wacky to me. Given that we are already down like over 30% (on the Naz at least), is selling puts now a good choice? The premiums should be nice and fat. And the money you get from selling them can help shore up your balance sheet, probably heavily in the red as mine.

Thoughts?
 
SoyUnGanador said:
Markets are WAY down. Pain and panic is everywhere. Are selling puts right now the right move? Sure, some of you are predicting a crash worse than the great depression, but that seems a little wacky to me. Given that we are already down like over 30% (on the Naz at least), is selling puts now a good choice? The premiums should be nice and fat. And the money you get from selling them can help shore up your balance sheet, probably heavily in the red as mine.

Thoughts?
More...

Too risky IMV. You can "sort of safely" sell puts only up to the amount of cash you hold to cover being exercised... and that doesn't include the "big surprise drop" from whatever and wherever.
 
Selling puts is never a good idea. Those premiums are fat for a reason.

A friend of mine had the same thought you did in 2008. He sold an ATM put with 2 days to expiry for 68. A day later he had to buy it back for 250.

We still laugh about that.
 
SoyUnGanador said:
Markets are WAY down. Pain and panic is everywhere. Are selling puts right now the right move? Sure, some of you are predicting a crash worse than the great depression, but that seems a little wacky to me. Given that we are already down like over 30% (on the Naz at least), is selling puts now a good choice? The premiums should be nice and fat. And the money you get from selling them can help shore up your balance sheet, probably heavily in the red as mine.

Thoughts?
More...

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2020 very similar technical. But gbp stable enough?

Maybe December contract strangle? Have to have big brave for 1.05 - 1.15. What think? I don't know but was thinking same question. Thank you for interesting question please.
 
I bought some leaps puts deep out of the money.
And if the markets rally, I might sell some calls dotm on stocks I own and buy more puts.
 
It is really no different than underwriting an insurance policy on your friend's new car.

It only makes sense for a company to underwrite many uncorrelated insurance policies so they are collecting more in premiums than what they are going to payout in car repairs based on the statistical frequency of accidents.

That is quite a different strategy than collecting expensive premiums from a friend and hoping they don't total the car.
 
always do hindsight analysis / look at the chart or whatever.

You have already missed the boat.
Don't attempt to swim after the boat.
So wait for the next boat which might come a few weeks/months later (or never).
 
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ktm said:
Selling puts is never a good idea. Those premiums are fat for a reason.

A friend of mine had the same thought you did in 2008. He sold an ATM put with 2 days to expiry for 68. A day later he had to buy it back for 250.

We still laugh about that.
More...

Nothing wrong at all with writing Put premium when Premiums/ IVs are fat on stock you’d like to own outright…. Great way to buy stock wholesale For your portfolio… Actually there is no better way to buy stock wholesale!
 
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