Never shorted options before

Quote from galvinlee888:

Oh ya, I will take your advice :p

Still trade using your paper account and make 6 figures every month ? :D
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Options allow for very high leverage with limited risk and high transaction cost, if you're good enough at trading the leverage is the advantage and transaction cost is not really a factor.
Try not being mediocre, it will change your outlook on options trading.
 
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The only way retail trader can make money is if you are good in direction: up, down or side way (theta trade). However, if you are good in direction, future/stock (like SPY) is the best instrument.
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so true, my biggest gain is from swing trading SPY/QQQ.

Opitons trade mostly are a wash, they satisfy my inner need for overtrading. Occasionally score big.

BTW, the other bad thing about option trade is that you can't find a *well-managed* all-in trade. Which is even worse for shorting options.
 
Quote from mikeenday:

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The only way retail trader can make money is if you are good in direction: up, down or side way (theta trade). However, if you are good in direction, future/stock (like SPY) is the best instrument.
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so true, my biggest gain is from swing trading SPY/QQQ.

Opitons trade mostly are a wash, they satisfy my inner need for overtrading. Occasionally score big.

BTW, the other bad thing about option trade is that you can't find a *well-managed* all-in trade. Which is even worse for shorting options.
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IMO, "all-in" and well-managed are diametric conditions. I have known traders that went all-in on American exotics and have a perfect record when utilizing all of their available capital, but there is no corollary when discussing delta1 trades. You cannot go "all-in" on futures and an 50% haircut equity trade would also pale by comparison.

Also, you're hung-up on "shorting" options. You can be short volatility and net-long premium. You can also structure long vol and short gamma (any long calendar). A long fly can be short vol when neutral delta and flip to long vol when trading outside the wing-strikes. Your view of the relative merits of short vol are ill-informed.
 
Quote from spindr0:

But that's exactly what you did. You presented a single scenario to support a larger premise.

Yes, there's potentially a lot of pain in shorting a $1 stock but realistically, how many are there in the DOW, S&P 500, RUT, etc? And how many people who routinely short stocks short $1 crap? It's a weak argument.
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What the hell? I only presented a theoretical example to counter yours. I simply stated the fact is true.

I obviously agree that it's a weak argument, I've already posted several times, I'm short R2K @ 710 since Sunday.

Third of all, in our hypotheticals, no one with a brain would short something worth $1, for exactly the fact we talked about. There is little to gain, and the risk ammount is infinite (without a buy stop), THEORETICALLY! no one is saying that it's all that PRACTICAL, EXCEPT you!
 
Quote from adamm2:

What the hell? I only presented a theoretical example to counter yours. I simply stated the fact is true.

I obviously agree that it's a weak argument, I've already posted several times, I'm short R2K @ 710 since Sunday.

Third of all, in our hypotheticals, no one with a brain would short something worth $1, for exactly the fact we talked about. There is little to gain, and the risk ammount is infinite (without a buy stop), THEORETICALLY! no one is saying that it's all that PRACTICAL, EXCEPT you!
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There's something very wrong with your reading comprehension if you think that I said that shorting $1 stocks is PRACTICAL.
 
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