Naked Options Yields Calculator

M

MegaDeth

Hi,

I have developed a software application that computes the yield for OTM options contract along with the associated risk (change in underlying price). It can run on any list of stock symbols. This way you can identify the best investment choices for selling out of the money naked options while managing your risk. The software gets real time contract prices from TWS running locally.

I currently have it run on all the NASDAQ, NYSE, DOW and AMEX optionable equities. If there is interest, I can share my results. If you would like to get a copy of my application, PM me.

Let me know.
Megadeth
 
The yield of an option contract doesn't make it the best choice for selling naked. What the underlying does is what's important.
 
Quote from MegaDeth:

Hi,

I have developed a software application that computes the yield for OTM options contract along with the associated risk (change in underlying price).

Let me know.
Megadeth
More...

Agreeing with gody, this application is dangerous.

People who have no clue will assume best ROI means best investment.

You are setting yourself up for lawsuits. I suggest to keep this software for private use - and avoid using it.

Mark
 
Quote from dagnyt:

Agreeing with gody, this application is dangerous.

People who have no clue will assume best ROI means best investment.

You are setting yourself up for lawsuits. I suggest to keep this software for private use - and avoid using it.

Mark
More...

I agree with your point although not your conclusions. This tool may be dangerous for the naive. For example, a slightly OTM put option would have very high yield, albeit at a high risk of closing ITM.

But if you are careful using it, my tool is valuable. It can help identify OTM option contracts with the highest yield within your risk range. If INTC and GOOG contracts offer yields of 45% and 60% resp. for the underlying change in price of 20%, which one would you rather invest in.

Investing in naked options is risky but if your doing it, why not maximize the yield? How much risk you would like to take depends on your individual risk appetite.

And yes, my PM is now enabled.
 
Quote from MegaDeth:

If INTC and GOOG contracts offer yields of 45% and 60% resp. for the underlying change in price of 20%, which one would you rather invest in.
More...

The one that is mispriced.
 
Quote from MegaDeth:

why not maximize the yield?
More...

Because maximum yield should not be your objective.

An intelligent way to invest is to consider both risk and reward at the same time. If you have an opinion of the market, consider that also.

You admit that your tool may be dangerous to the naive - but no one else would want to use it?

Mark
 
Quote from dagnyt:

Because maximum yield should not be your objective.

An intelligent way to invest is to consider both risk and reward at the same time. If you have an opinion of the market, consider that also.

You admit that your tool may be dangerous to the naive - but no one else would want to use it?

Mark
More...
You are taking my comment out of context to rationalize your conclusion that "maximizing the yield should not be the objective". :confused:
Maximizing the yield within your risk range, which is what I said, seems appropriate to me.

Good luck with your "intelligent" way of investing.
 
Quote from MegaDeth:


Maximizing the yield within your risk range, which is what I said, seems appropriate to me.
More...

Why do you believe that to be true?

How about minimizing both risk and yield - withing your risk range? Isn't that appropriate for conservative investors? I know you recognize that higher reward goes along with higher risk.

So I ask - why do think it's a good idea to maximize both?

Just because a position falls within your risk range does not suggest (at least to me) that there's ay good reason for taking the maximum risk to target the maximum reward.

Mark
 
Quote from dagnyt:

Why do you believe that to be true?

How about minimizing both risk and yield - withing your risk range? Isn't that appropriate for conservative investors? I know you recognize that higher reward goes along with higher risk.

So I ask - why do think it's a good idea to maximize both?

Just because a position falls within your risk range does not suggest (at least to me) that there's ay good reason for taking the maximum risk to target the maximum reward.

Mark
More...
True, conservative investors may intend to minimize their risk and consequently the yield.

This tool does not promote risky trades if that was implied. The tool only calculates the yields and the corresponding risk for a list of stocks. An investor, conservative or aggressive, may use the information to help identify trades that fit their risk appetite.

Let me know if you have any suggestions. Thanks.
 
You must log in or register to reply here.
Back
Top