Selling naked calls.....

S

S2007S

True or false


I have never sold naked calls but I do have access to do so, recently researching about selling naked calls I came across a someone saying that they sell naked calls a day before the ex dividend date and buy them back on dividend day, does anyone here do this type of setup?
 
???????

You can check the historical call option price before the ex-dividend and on the dividend date for various stocks.
And see whether it is workable or not.


Anyway, I sold naked options before.
I sold it and received a few dollars in credit.
Then closed my position and lost a few thousand dollars.
And had many many many sleepless nights.

Good Luck!
 
Last edited:
Yes, you can backtest selling calls with dividend dates on ORATS.
Robert Morse said:
I’m sure Orats can and has back tested this and I expect the results are the same as doing the same without the dividend.
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S2007S said:
True or false


I have never sold naked calls but I do have access to do so, recently researching about selling naked calls I came across a someone saying that they sell naked calls a day before the ex dividend date and buy them back on dividend day, does anyone here do this type of setup?
More...


The div is reflected in the forward. 70IQ thread.
 
How much he is making on each call? Maybe he is just making time decay and also possible drop in stock because people tend to keep the stocks for dividend and maybe sell it in ex devidend date?
 
hajimow said:
How much he is making on each call? Maybe he is just making time decay and also possible drop in stock because people tend to keep the stocks for dividend and maybe sell it in ex devidend date?
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I don't know, they didn't say but they say it was like free money so I'm confused if the dividends are priced in...
 
maxinger said:
???????

You can check the historical call option price before the ex-dividend and on the dividend date for various stocks.
And see whether it is workable or not.


Anyway, I sold naked options before.
I sold it and received a few dollars in credit.
Then closed my position and lost a few thousand dollars.
And had many many many sleepless nights.

Good Luck!
More...



I never did a naked option before but when you sell a naked call and take the credit. Say you do a 500 spy for $200 in credit and the spy closes at 505, you buy the stock at 505 and immediately have to sell it back losing $300?

$500 loss minus $200 credit = $300
 
I do sell lots of naked calls and puts. Either I let them to expire at zero or buy them back at almost nothing (like 5 cents or lower) to free up margin and do it for the next expiry. You don't need to buy underlying at all. If you want to lock your profit, just cover your short. In the above case you sold naked call and pocketed $200 and after exiry your account will show 100 shares of SPY short at $505 and you can cover your short at $505 and and you have made $200- $50 = $150.
 
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