Rolling naked put

Option_Attack said:
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:


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BXM beats SP500 on a risk adjusted basis.
 
Option_Attack said:
Nah, what I'm really saying is that I tried doing the regular monthly NP/CC thing years ago (and monthly index Condors and Cov Calls on dividend stocks and LEAPS, etc, etc). And just like the BXM, you do better than the indices in a bear market, while doing worse in a bull market.
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Options trading involves weighing the potential reward against the potential risk along with associated probabilities. All I attempted to do with my IBM example was to explain to the OP what he gets for rolling his short put when it's nearing ATM versus the inferior result if he waits until it's ITM. It's his decision whether this strategy is a :thumbsup: or a :thumbsdown:

I'm not a big fan of CC-s and NP-s either. The imbalanced R/R is a poor starting point. There may be exceptions such as selling a short put to acquire the stock at a price but I'm no longer an acquirer :)
 
OptionsOptionsOptions said:
What sort of exit strategy do you have?

I would use a mechanical one.
  • Exit all trades at expiry - do not micromanage.
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spindr0 said:
Options trading involves weighing the potential reward against the potential risk along with associated probabilities. All I attempted to do with my IBM example was to explain to the OP what he gets for rolling his short put when it's nearing ATM versus the inferior result if he waits until it's ITM. It's his decision whether this strategy is a :thumbsup: or a :thumbsdown:
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RE: April06 IBM 152.50 puts.

  • IBM currently at 153.68
  • Stopped out early on Monday - one day after trade opened.
  • Position has swung back to OTM.
  • Of course anything can happen during the next two days.
 
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