Option selling. Too good to continue?

[gaussian]

Me. I learned a long time ago telling people making easy money to stop making easy money just ain't easy. You come here asking a question, and the most experienced people are giving you an identical answer, and you don't want to listen. The fact they are 10 delta options, in a low vol environment that you are selling, just makes this all the more tragic.

So I'll say it once. Stop making easy money. This won't end well.

Yeah OP is quite literally picking up pennies in front of a freight train. Low vol and 10 delta is a nightmare combo. Not even getting enough cash back for a beer after a long day of jumping on and off the train tracks.

 

[destriero]

oic, we forgots that he can roll out of danger. Duh.

 

[El OchoCinco]

oic, we forgots that he can roll out of danger. Duh.

Dest..you know what cat meme is coming...

 

[El OchoCinco]

 

[ZBZB]

 

[Overnight]

Who says it hits 25. Might just wake up with it at 35.

If dems win in November, I would think VIX will spike above 25. 35? *shrugs* But it is surely going to go up as we near the election date.

 

[destriero]

If dems win in November, I would think VIX will spike above 25. 35? *shrugs* But it is surely going to go up as we near the election date.

lol dude we're going to hit that before November.

 

[drcruz]

Sorry, I dont know what BP is. The account is getting close to be eligible for PM (I don't know if that will help in the case of put selling though). I use all the available margin. Currently, I am short 6 puts and I roll the position to maintain a minimum delta exposure

As one premium seller to another. Cut your risk in half to allow for margin expansion. Also, you'd be better off with fewer contracts closer to the money. Your losses grow exponentially with more contracts. You can still do roll and adjust strategy even when closer to the market.

Do yourself a favor and get a subscription to Optionnet Explorer to test your strategy. After testing 2013, I swore off naked calls. No amount of adjusting saved the positions in a raging bull market

 

[drcruz]

Forgot about James Cordier

 

[Springs Trader]

Serious question from someone who has never traded real money but has been studying for a while.
Every so often, this subject about selling naked puts is discussed. The answer is always some version of " it won't end well" or "you will end up broke or bankrupt".
If everyone who sells naked puts goes bust, does that mean someone who buys otm puts and holds on will eventually make a fortune? Thanks for your insight.