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

[newwurldmn]

Spreads are very different if you have a directional view. Versus naked put selling? C'mon man.

Even in an up market with a VIX below 20 and everything is super calm, who's to say you don't wake up and Putin nuked somebody? I wouldn't say the same about naked calls as the good news can only be so good in any one day. The bad news can change the world forever. You can say there's theoretically no limit to the upside and only 3500 points to the downside. I can't think of any news that could make us open limit up tomorrow and then for multiple days thereafter - but the same can't be said for the downside.

Two differences between trading spreads and trading outright options:

1. You trade more spreads to make the same time value as outrights - then you are not as protected because you have leverage.
2. You trade the same amount of spreads as you would naked (you are unlevered). Overtime how much do you piss away on that downside put?

In the end, both trades are picking up pennies in front of a steam roller.

 

[earth_imperator]

@newwurldmn, I think your logic lacks.
And: when trading one then one should forget about the other and just concentrate on the one only.

 

[SoyUnGanador]

I should have sold some puts, would have made out like a bandit.

 

[Overnight]

I should have sold some puts, would have made out like a bandit.

You mean today? If you sold puts at market open, wouldn't you be in a world of hurt right now?

 

[SoyUnGanador]

You mean today? If you sold puts at market open, wouldn't you be in a world of hurt right now?

Nooooo lol. Selling puts means I have to buy at the set price. Whatever that set price is, if the stock goes up, I get to buy at that set price still and I have the stock that has now gone up in value. You are thinking of selling calls.

 

[Overnight]

Nooooo lol. Selling puts means I have to buy at the set price. Whatever that set price is, if the stock goes up, I get to buy at that set price still and I have the stock that has now gone up in value. You are thinking of selling calls.

Right right, if you sold the put at MO and market goes up, the option will eventually expire worthless, nobody would exercise it. I fing hate options. It's like a Sunday NYT crossword puzzle I'll never solve, but pick at occasionally, haha.

 

[SoyUnGanador]

You got it, and agreed.