The answer is: if an option is at its fair value E(pnl)=0, you buy it.
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Option selling. Too good to continue?
- Thread starter draft730
- Start date
The answer is: if an option is at its fair value E(pnl)=0, you buy it.
How many puts / underlying notional were you short on a 50k account?
And how much was the market up during the 4 month period you gained 40 percent??
And how much was the market up during the 4 month period you gained 40 percent??
Started with 49 ended with 86.7k. As I said in the first message I sell 10-14 delta puts and roll the position to maintain a minimum overall delta exposure. In the first 4 months alone I was up 40% if that helps
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7-8 contracts. The vol was quite high. Now, I cant short more than 6, even with much higher capitalHow many puts / underlying notional were you short on a 50k account?
And how much was the market up during the 4 month period you gained 40 percent??
Thats the whole point,and its still hard to believe you put up the numbers you claim..40 percent on 10 delta options doesnt make you 40% in 4 months.You would have to sell apx 30% vol and keep rolling it at apx 30 vol.Selling higher deltas obviously helps your cause..
Obviously the market rallied and somehow you still sold really rich vol in a contracting vol market..
No offense,but your numbers are really hard to digest
Obviously the market rallied and somehow you still sold really rich vol in a contracting vol market..
No offense,but your numbers are really hard to digest
Just be sensible with your risk. Aim for 15% annually not 77%!!!!
For criticizing a guy who professionally made markets in options you sure are happy to take OPs bogus 77% number at face value...
Predictably, there are many who doubt the story. I didn't start this thread to brag, just to ask for tips. Here we are. As you can see almost all the trades are short put in ES. There are a few short call trades and some futures, but the overall effect of those is minimal
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You see any way he could have done 40 percent in 4 months selling 10 delta options???
For criticizing a guy who professionally made markets in options you sure are happy to take OPs bogus 77% number at face value...
I said 10-14 delta. Here are all the trades, that's better than the previous oneYou see any way he could have done 40 percent in 4 months selling 10 delta options???
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You see any way he could have done 40 percent in 4 months selling 10 delta options???
Why not? What matters is how many you sell.. Obviously he was taking WAAAY to much risk on his account. In a year like 2019 where SP500 ends up like 30 %, it does not take a genius to make crazy returns. But this is taking huge risk. He could only sell 1 ES option on his 50k account and even that is stretching it. He sold like 8 options… So he was selling options on 1 mio notional with 50k account.. How stupid is that is beyond commenting, but yeah, can be done in only up up up years.. But I dont see how he could survive feb or dec crash of 2018. Only if he sold less back then, because with VIX spiking and SP nosediving having 50k and selling 8 ES contracts surely puts (no pun intended) you out of business..
Most people responding to you have never sold a put and don't have the balls to. Selling 10 delta puts at 60 days to expiration, then managing the trade at 40% maximum profit or closing the trade with 3 weeks remaining in the trade will work extraordinarily well. Try to use no more than 35% of your buying power. So if you have a $100k account, use no more than $35k for this strategy. Size is what kills when you are a put seller. Maintain your size and you will outperform the morons responding to you who simply don't have a clue.
I have sold a put!