Rolling naked put

[arm0211]

looking for inputs on the strategy of selling weekly puts that become ITM.

When rolling naked puts, do you tend to wait til the Friday if expiration to decide to roll or if the position become ITM early in the week and there is little extrinsic value do you decide to roll early/mid week since you're not necessarily being paid to have the position open anymore and the price of the option is almost all intrinsic.

 

[zdreg]

looking for inputs on the strategy of selling weekly puts that become ITM.

When rolling naked puts, do you tend to wait til the Friday if expiration to decide to roll or if the position become ITM early in the week and there is little extrinsic value do you decide to roll early/mid week since you're not necessarily being paid to have the position open anymore and the price of the option is almost all intrinsic.

you are looking at a future flipping hamburgers if you are lucky.

 

[tommcginnis]

There is an ET poster (with the word "Options" in his name) who contends that time is irrelevant to rolling an ITM option. I kid you not. Totally serious. "Hand to God" and all that.


Sheeesh.

 

[Option_Attack]

The gist of it is there are better strategies than weekly/monthly NP/CC rolling. The monthly BuyWrite index, as an example, doesn't show great results - at least when compared to SP500:

 

[spindr0]

Unless it's a gap down situation which prevents you from acting, the time to consider adjusting the short put is before it goes ITM. If it gets ITM, the time premium on both options shrinks as does the net credit that could be had for the roll. Don't fixate on the amount of TP remaining in the open option. Monitor the spread credit difference b/t the two with a combo order. As long as it is expanding, sit on the fence. If you allow the short to get reasonably ITM, you'll find that the roll credits are crap.

 

[spindr0]

There is an ET poster (with the word "Options" in his name) who contends that time is irrelevant to rolling an ITM option. I kid you not. Totally serious. "Hand to God" and all that.
Sheeesh.

Do you really mean to tell me that someone with the word "Options" in his name isn't spewing the holy option gospel?? Say it isn't so!!!

 

[spindr0]

The monthly BuyWrite index, as an example, doesn't show great results - at least when compared to SP500

What does the graph look like for the previous 10 years, including 2008 to 2009 ?

 

[arm0211]

seems like the responses are more of an opinion piece rather than addressing the question..

 

[Option_Attack]

Good question. Yes BXM will outperform the S&P during bear markets, and under perform during bull mkts. Looks like it just converges over time. Still, I believe "targeted" (back and forward tested) methods based on price action, etc. will significantly outperform simple buywrite strategies. The trick, of course, is finding them!

What does the graph look like for the previous 10 years, including 2008 to 2009 ?

 

[spindr0]

Yes BXM will outperform the S&P during bear markets, and under perform during bull mkts. Looks like it just converges over time.

So basically, what you're telling me is that all I need to do is to find someone who can tell me if we're in a bull or a bear market???