Put spreads for income?

[zghorner]

No doing a spread is like putting brakes on steamrollers or putting spike strips on the road. It's still a steamroller and will still roll you over but it will be stopped by the long options somewhat so the loss will be reduced.

idk man. pennies in front of steam rollers indicates massive risk for minimal return. Running credit spreads you have the odds heavily in your favor...you don't even have to be that good at direction. Its pennies still but if the underlying goes against you in a bad way the risk is still less than just single leg long options.

Let me ask you this then: What options strategies do you consider far and above superior as far as best risk:return ratio? Again, I am genuinely trying to learn, not being a disagreeable butthead.

 

[JSOP]

idk man. pennies in front of steam rollers indicates massive risk for minimal return. Running credit spreads you have the odds heavily in your favor...you don't even have to be that good at direction. Its pennies still but if the underlying goes against you in a bad way the risk is still less than just single leg long options.

Let me ask you this then: What options strategies do you consider far and above superior as far as best risk:return ratio? Again, I am genuinely trying to learn, not being a disagreeable butthead.

Ok you just agreed 100% to what I said. I said "doing a spread is like putting brakes on steamrollers or putting spike strips on the road. It's still a steamroller and will still roll you over but it will be stopped by the long options somewhat so the loss will be reduced."

 

[zghorner]

Not an expert, but in my mind there are few ways to reduce risk: hedging or position sizing+diversification. The problem with hedging is that it is expensive so you end up making even less on spreads, which in turn leads you to increase position size. But since crazy sh*t happens in the market all the time, I prefer small sizes with undefined risk than large size with “defined” risk. Either way, it’s picking up pennies in front of heavy objects.

I see your point. Returns on credit spreads are such garbage you tend to want to push your bet sizing beyond what is safe. Makes sense.

Still, with patience and control, credit spreads don't seem like a terrible strategy. Odds highly in your favor, just not going to be hitting any home runs.

 

[zghorner]

Ok you just agreed 100% to what I said. I said "doing a spread is like putting brakes on steamrollers or putting spike strips on the road. It's still a steamroller and will still roll you over but it will be stopped by the long options somewhat so the loss will be reduced."

Ok I see now and glad that we agree. The way you worded the last half made me think you were implying they still carry considerable risk but I interpreted it wrong.

 

[JSOP]

I see your point. Returns on credit spreads are such garbage you tend to want to push your bet sizing beyond what is safe. Makes sense.

Still, with patience and control, credit spreads don't seem like a terrible strategy. Odds highly in your favor, just not going to be hitting any home runs.

Every time when you think how garbage the return on the credit spread is, think of this:

$150 million loss!!

Then the return on those credit spreads would seem like gold to you.

 

[zghorner]

Every time when you think how garbage the return on the credit spread is, think of this:

$150 million loss!!

Then the return on those credit spreads would seem like gold to you.

it kills me every time that he didn't even remove the Rolex before filming haha.

"I am so sorry for not managing our ship and keeping her afloat"

Yea you are right, and this is a clear example of why naked selling is always a terrible idea. I have done it a some in the past it it bit me too...not like this lol but still my first big loss came from naked options. At this point I am willing to give up the dream of 10 baggers (playing single leg long options) for some consistency and favorable probability. To me, credit spreads seem like a decent place to start.

 

[JSOP]

it kills me every time that he didn't even remove the Rolex before filming haha.

Everybody hated him wearing that Rolex watch so much. LOL This is such bad publicity for Rolex. Rolex is going to lose so much business considering all of this douche's clients are all loaded including the owner of the Florida Tampa Bay Lightning.

 

[SPX Options Trader]

Everybody hated him wearing that Rolex watch so much. LOL This is such bad publicity for Rolex

I consider myself a watch person, maybe a watch psychologist, I've been following them for some time.
All Rolex guys, both in movies and in real life, are basically a-holes. Patek Philippe guys are ego elitists, soft impotents. Audemars Piguet guys are blowhards.
I personally like Vacheron Constantin, Breguet and Jaeger LeCoultre. These brands, albeit slightly lesser known, are much more humble, decent, honest, legit, no desire to be boastful or prideful or arrogant.

 

[JSOP]

I consider myself a watch person, maybe a watch psychologist, I've been following them for some time.
All Rolex guys, both in movies and in real life, are basically a-holes. Patek Philippe guys are ego elitists, soft impotents. Audemars Piguet guys are blowhards.
I personally like Vacheron Constantin, Breguet and Jaeger LeCoultre. These brands, albeit slightly lesser known, are much more humble, decent, honest, legit, no desire to be boastful or prideful or arrogant.

Me I don't wear any watch at all. I don't give a s*** about time in general. I feel time is the biggest violator of human rights, the basic rights to life and the biggest infringement of freedom. A watch just reminds me how big of a dictatorship time is. When I really really want to know time, I just look at my cellphone. So analyze that. LOL

 

[Overnight]

...When I really really want to know time, I just look at my cellphone. So analyze that. LOL

So you are still a slave to technology. When I want to know the time, I look at the angle of the sun in the sky, recall when the sunset time is, and calculate the number of degrees left before the sun hits the horizon. I get it pretty close.

At nighttime? I don't give a damn. It means I am up past my bedtime.