Is there a way to set a stop loss when writing naked options

Quote from TraderZones:

the farther out you go, the less that time decay will help you. Regarding time decay, option buyers want farther out. Option writers want closer to expiration. Time decay is more rapid as you get closer to expiration.
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Yeah but it works both ways...Personally I think the closer I am the more risk I have. I know that the options really begin to lose value under a month but that is just too risky for me. If something even mildly crazy happens I'll get slammed.

I like writing the naked option way out of the money but I do want some protection in case of a wild event.

Maybe put an order in to purchase an option outside of the money like for example in gold I sold a 1500 call in June for $240. Maybe follow up with putting in an order to make a purchase on an option at something like 1200. Say if the bid/offer is 500 by 700 put an order in for something like 900. I'd have to figure it out.

I've been trading for a while but option writing is new to me
 
Quote from lasner:

Yeah but it works both ways...Personally I think the closer I am the more risk I have. I know that the options really begin to lose value under a month but that is just too risky for me. If something even mildly crazy happens I'll get slammed.
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these are not necessarily related. You want less volatility, then you reduce your position size.

There is really no inherent longterm advantage in options writing. And when you write a longer term option, you lose even the advantage of time decay.
 
Quote from lasner:

I want to write naked options in commodity markets and was wondering if there is a way to set a stop loss.....my broker tells me there isn't
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what kind of margin are you having to put up for this?...better to trade naked NDX options?
 
Quote from lasner:

I want to write naked options in commodity markets and was wondering if there is a way to set a stop loss.....my broker tells me there isn't
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Writing naked options is one of the most dangerous trading ideas:
Very limited profit, with unlimited risk.

Anyhow, you may:
Buy a single share of the underlying stock (or ETF, commodity, etc).
Place a stop loss on the share.
Place a one-triggers-other sell to buy the option you sold.

This way the stop loss is based on the underlying and NOT on the price of the option (which may vary greatly during periods of low liquidity, such as after-hours).
 
Quote from crgarcia:

Writing naked options is one of the most dangerous trading ideas:
Very limited profit, with unlimited risk.

Anyhow, you may:
Buy a single share of the underlying stock (or ETF, commodity, etc).
Place a stop loss on the share.
Place a one-triggers-other sell to buy the option you sold.

This way the stop loss is based on the underlying and NOT on the price of the option (which may vary greatly during periods of low liquidity, such as after-hours).
More...

Not sure I follow you...buy a share or an option. I'm writing naked option in gold (futures). So for example I sold a 1500 call in June for $250.

Do you want me to buy a futures or an option. I'm not following you at all
 
Quote from crgarcia:

Writing naked options is one of the most dangerous trading ideas:
Very limited profit, with unlimited risk.
More...
yea. better to write covered calls. much safer. lol
 
YOU CAN USE STOPS IN ALMOST ANY MARKET.. WHO THE HELL IS YOUR BROKER .. AND IF U NEEDED TO ASK THIS QUESTION THEN YOU HAVE NO BUSINESS..COLLECTING PREMIUM YOU TWIT!
 
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