North Cascades, I have sold options using IB's TWS with an option account. It didn't seem that hard, took only about half a second, and it cost the same as buying an option. Thank you for sharing your strategy, I really like the idea of taking a partially hedged bet on the QQQ using all that fancy vega and delta stuff. I'd like to learn more about it, and your posts certainly got my eyes wide open. [/B][/QUOTE]
--
You have several big disadvantages as a "retail" options seller:
1. Your transaction fees as a percentage of maximum profit are normally relatively high.
2. You have to have sufficient account equity to open a "naked" position (an options market maker is exempt, under the assumption he/she is appropriately hedged).
3. Unless you are dynamically hedging (or overhedging) your position with a delta neutral strategy you expose yourself to losses much larger than your maximum profit.
4. Your competitors in this strategy are standing on a trading floor with extensive training and experience with options pricing models, game theory and probability, and they are backed up with sophisticated risk management technology.
--
You have several big disadvantages as a "retail" options seller:
1. Your transaction fees as a percentage of maximum profit are normally relatively high.
2. You have to have sufficient account equity to open a "naked" position (an options market maker is exempt, under the assumption he/she is appropriately hedged).
3. Unless you are dynamically hedging (or overhedging) your position with a delta neutral strategy you expose yourself to losses much larger than your maximum profit.
4. Your competitors in this strategy are standing on a trading floor with extensive training and experience with options pricing models, game theory and probability, and they are backed up with sophisticated risk management technology.
