My OPTION TRADES..... part 2

Dude, where did i say something went wrong? You play these childish games putting words out i never said.. All your defenses of put selling is fine...i say its an inferior trade, you say its not..have fun.

You want to learn? Go open trader p/l ..and learn
 
Quote from sellindexvol66:

Dude, where did i say something went wrong? You play these childish games putting words out i never said.. All your defenses of put selling is fine...i say its an inferior trade, you say its not..have fun.

You want to learn? Go open trader p/l ..and learn
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You forgot to name drop, otherwise your post is meaningless. Perhaps the edit below will help.

Quote from sellindexvol66: (Atticus name dropping edit)

"Dude, where did me and Atticus say something went wrong? You play these childish games putting words out me and Atticus never said.. All your defenses of put selling is fine...Me and Atticus say its an inferior trade, you say its not..have fun. Me and Atticus are buddies.

You want to learn? Go open trader p/l ..and learn. Me and Atticus are buddies."
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Quote from sellindexvol66:
Dude, where did i say something went wrong? You play these childish games putting words out i never said.. All your defenses of put selling is fine...i say its an inferior trade,....
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My only point was, it's not the strategy that is inferior. It's the trader implimenting the naked put selling strategy who is the problem.
The naked put seller has to think about protecting his trade BEFORE he even initiates the trade. Once there is a problem, it may be too late to think about risk management. Hence the issues I listed below:

<<< Poor stock picking, poor strike selection, excessive leverage, % return goals that were too high, too volatile a stock and/or sector to be in, over concentration of cash in too few stocks, a refusal to take managed losses..... >>>

As the above are some of the reasons naked put sellers often take a bath.
Since their potential losses are not controlled, put sellers need to think about controlling their portfolio risk BEFORE those trades are even initiated. And you do that by thinking about the issues that I mentioned.
The ones that seemed to really upset you.
 
Quote from Put_Master:
Since their potential losses are not controlled, put sellers need to think about controlling their portfolio risk BEFORE those trades are even initiated.
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Every sane person would look at risk control before initiating the trades, not when the shit hits the fan (see my Nth rant about "adjustments"). Problem is that no matter how good your market intelligence is you can't protect yourself from fraud or a natural disaster. If you where short a put on TEPCO in April 2010, which was a nice low-beta utility, you got fucked big time, even though you probably used your best judgement in selecting that stock.
 
Quote from sle:
If you where short a put on TEPCO in April 2010, which was a nice low-beta utility, you got fucked big time, even though you probably used your best judgement in selecting that stock.
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Wow ........ One obscure stock in 2 1/2 years. That's a good argument FOR naked puts.

:)



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diaoptions has spoken
 
Quote from diaoptions:

Wow ........ One stock in 2 years. That's a good argument FOR naked puts.

:)
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if you would be short puts on any Japanese stocks in the spring of 2010, you'd be toast. Of course, you would later claim here that the stocks actually where on your "watch list". You are a special kind of idiot, we are truly privileged to interact with you :)
 
Quote from sle:

<<< Every sane person would look at risk control before initiating the trades, not when the shit hits the fan (see my Nth rant about "adjustments"). >>>

I respectfully disagree.
I think many traders who impliment some hedged type trades, "assume" they are more protected than they actually are.
And as a result, they are often drawn into volatile stocks and sectors that pay better than less volatile stocks and sectors.
They may also use excessive leverage, because they feel protected.
They may not be as quick to close a deteriorating trade, because they feel protected.
They may over concentrate in that volatile sector, because that's where the money is, and they feel protected.
They may not be overly concerned about a companies fundamentals, because they feel protected. And so are less picky about what stocks/sectors they get into, and which to avoid.

I think for a lot of investors who feel protected, (in the form of only being exposed to "limited losses"), other forms of risk management take a back seat to the potential gains offered by the trade.



<<< Problem is that no matter how good your market intelligence is you can't protect yourself from fraud or a natural disaster. >>>

I agree.
All we can do is try to manage our risk inteliigently, in what ever form we are most comfortable with.
That being, diversification, not over concentrating cash, not excessive leverage, various hedging strategies, being picky about what stocks or indexes we use, setting reasonable % return goals relative to the VIX enviroment we are in, , ect....

It isn't a stock that drops 25 - 35% suddenly that kills investors.
It's being on excessive leverage when it occurs, and/or over concentrating, and/or being in an over debted piece of crap that isn't recoverable, and so on...
It's just been my observation over the years, that the more protected an investor feels because he is hedged, the less attention they sometimes pay to the other forms of "sane" protection.
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I want to make it clear that i am NOT trying to encourage investors to sell naked puts over hedged ones.
If you don't have the skill, the experience, or have the time, or are not willing to put in the time, to analyze a stock, and be able to weed out the ones considered too risky, then you should NEVER sell puts naked.
Throwing darts like that will get you killed faster than any strategy I know.
Every strategy has it's advantages, but they all have their disadvantages as well.
I'm aware of the risks I put myself in.
I'm just not convinced enough hedged traders are aware of the actual risks they are exposed to.
 
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