Option selling. Too good to continue?

ironchef · Jan 13, 2020

Stamamarti said:
But then again, if you know how to selectively pick up your spots and strikes (based on some suggested fundamentals) then you might as well go out-right for the spot .. better edge there than capping the potential gains..

No, not spot, in that case you go long call/put, like long/short the spot on margin.

draft730 · Dec 30, 2020

After another great year (+50%), I am really starting to feel that I might not be just lucky... And I feel the urge to brag about it. I navigated successfully the most dangerous year for put sellers since 2008 and I made exceptional returns. I had a relatively big drawdown (-30%) but the plan paid off. And it would have been better if I had resisted the temptation of selling calls early in the year, pro COVID. I seriously considered many views expressed in this thread and I cut down my exposure by half and this probably saved me during the crash. I am really thankful for that

taowave · Dec 30, 2020

Keep in mind IV was very high most of the year..I don't think we will see those levels,making the put selling business much tougher..

Dont be a one trick pony and congrats on a great year

draft730 · Dec 30, 2020

Thanks. I realize that about the IV. I am not expecting to have these returns every year.

taowave · Dec 30, 2020

Im in the same boat..Fang upside vol has gotten destroyed,and that was most of my P...

draft730 said:
Thanks. I realize that about the IV. I am not expecting to have these returns every year.

traider · Dec 30, 2020

taowave said:
Im in the same boat..Fang upside vol has gotten destroyed,and that was most of my P...

Fang vol was really good. TSLA was really great for some people too. Are you looking at doing other strategies now that vol has dropped significantly

newwurldmn · Dec 30, 2020

taowave said:
Im in the same boat..Fang upside vol has gotten destroyed,and that was most of my P...

best environment in a decade. Government dumped a trillion dollars into the stock market. Our only job was to figure out how to divide it.

in 2021 it will go back to being a cage match again.

taowave · Dec 30, 2020

Im afraid you are 100% right...
Im going to attempt to be more directional in 21..First time for everything

taowave · Dec 30, 2020

Have no choice but to look elsewhere or hope for some sort of a dislocation...

AAPL and TSLA were 90 percent of my P and L..

At this vol I am looking at split strike flys (as opposed to ratios),diaganols,calendars...

Probably have a bit more delta than I did in 2020...

traider said:
Fang vol was really good. TSLA was really great for some people too. Are you looking at doing other strategies now that vol has dropped significantly