Selling Naked Puts on Up Days

[Sweet Bobby]

I’m starting the year with good success selling puts in /ES. I much prefer to sell them on down days, but with this ever rising market, I’m sometimes forced to sell on up days in the market in order to maintain my inventory.

I’m just curious if anyone else sells puts on up days and am I the only one who who has trouble pulling the trigger when the market is up.

I hope to hear from the true professionals but I know I’ll have to wade through all the amateurish “penny in front of a steamroller” blowout comments.

Happy Trading!

 

[Bekim]

I would do it on an up day off of a pull back but probably on after several up days in a row

 

[sonoma]

I’m starting the year with good success selling puts in /ES. I much prefer to sell them on down days...

Happy Trading!

Are you saying you prefer shorting the put on down days (as opposed to up days) for the expected increase in vol, or because it's another way to BTFD?

 

[Robert Morse]

I’m starting the year with good success selling puts in /ES. I much prefer to sell them on down days, but with this ever rising market, I’m sometimes forced to sell on up days in the market in order to maintain my inventory.

I’m just curious if anyone else sells puts on up days and am I the only one who who has trouble pulling the trigger when the market is up.

I hope to hear from the true professionals but I know I’ll have to wade through all the amateurish “penny in front of a steamroller” blowout comments.

Happy Trading!

What is your plan if and when we do drop quickly?

 

[cvds16]

selling puts is dangerous way to be living and not money for free in a bull market ... if this turns again you might be in for big trouble

 

[Sweet Bobby]

Are you saying you prefer shorting the put on down days (as opposed to up days) for the expected increase in vol, or because it's another way to BTFD?

It’s a matter of selling into strength

 

[Sweet Bobby]

What is your plan if and when we do drop quickly?

I have significant hedges in place against my short puts.

 

[Sweet Bobby]

What is your plan if and when we do drop quickly?

When the big drop occurs, my hedges are a lottery play and I win big far in excess of the losses on the short puts.

I don’t blindly sell puts, and my account is limited to a few at a time. I manage them aggressively, taking profits at 30%. I’m able to put on my hedges for free, so there’s no drag on the portfolio. I think I need to be more mechanical on the selling of puts.

 

[Robert Morse]

When the big drop occurs, my hedges are a lottery play and I win big far in excess of the losses on the short puts.

I don’t blindly sell puts, and my account is limited to a few at a time. I manage them aggressively, taking profits at 30%. I’m able to put on my hedges for free, so there’s no drag on the portfolio. I think I need to be more mechanical on the selling of puts.

Got it. I have dealt with a large number of naked option sellers over the years including raising money for a CTA that does that. The single most important part of it is the plan when it does not work. You say that you do not sell naked, so that changes the post.

 

[Sweet Bobby]

Got it. I have dealt with a large number of naked option sellers over the years including raising money for a CTA that does that. The single most important part of it is the plan when it does not work. You say that you do not sell naked, so that changes the post.

I really view them as separate trades, and I do consider them naked. But I understand what you’re saying. I’m a creature of habit, and all my different strategies are tracked on different pages of my spreadsheet, so I call them naked puts since I track them individually.