Naked Puts on CROX

J

JournalWriter

For option sellers, check the volatility on CROX. It's up pretty high for the June 65 and 70 strikes. I think CROX will drop a little more before finding support making the puts worth consideration. The downside isn't too bad with the fundamentals catching up and the chart pointing to around 67 - 67.50 for support.
I have a limit in to sell at 2.10 right now on one June 65 put and will watch it to see if it finds support sooner I might go in closer to the current ask.

http://mytradersjournal.com/stock-options/
 
There is nothing wrong with writing a journal about your trading in an attempt to become a better trader. On the other hand, it is rather presumptuous for a new trader, who does not know that much about options (based on my reading of your site), to suggest trades to others. There are a lot of new traders that browse these threads and, no offense, but you are not qualified to suggest options trades at this point in your career.
 
Thanks for the feedback. I'll be more careful with my wording next time. Would it have been better as a question? I didn't mean it as a suggested trade for others as much as one to watch for newer traders and one to give feedback on for more experienced traders. Speaking of which, as an experienced trader what do you think of CROX?

I expect everyone to do their own research. I've been trading options for seven years and I agree I have a lot to learn (which is why I'm here), but the way I trade does work for me considering that I only do it part-time. I don't trade any complicated strategies, so maybe I'm not such a trader as an investor who starts and ends positions with options. I think a lot of the newer traders can learn from a discussion that starts with an idea like this.

Again, thanks for your feedback and let me know your thoughts on CROX or even selling a naked put to enter a position.
 
Well, investing in stocks via options, as you seem to be doing, is far different than trading options for a living. Since selling covered calls or selling naked puts are the same thing and many people do those strategies, I would say that there is nothing inherently wrong with them, or almost any option strategy, provided it is done for the right reason with the proper risk and money management.

I don't trade CROX so I can't comment directly, but I would point out that you are not trading options, you are picking stocks you want to be (or don't mind ending up) long and selling puts to accomplish it. I am not a stock picker so if you can beat the market by picking correctly, then more power to you. Considering how much the market has moved up, your large downside risk and very limited upside gain may not have been the best strategy to use over and over again. Selling premium is usually best for choppy, sideways markets not trending ones.

Everyone has different goals. If you just want to manage your investments then that's fine, but you should read every recommended option book and website, have a good theoretical pricing and risk calculator, and follow the implied and historical vol for awhile before using options so you can intelligently find the best strategy to fit your goals.
 
Quote from opt789:

Well, investing in stocks via options, as you seem to be doing, is far different than trading options for a living...
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I'm far from doing this for a living. I didn't mean to imply differently. I need more than 5 times what I have invested now before I could consider it and more than that really to weather the down times you are correct about enduring with this strategy.


Everyone has different goals. If you just want to manage your investments then that's fine... find the best strategy to fit your goals.
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Exactly. This strategy isn't good for most. That's one of the reasons I'm here and on my blog - to find more like minded investors.
 
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