Selling naked puts option strategy

Show me my post where you think I said that selling 15% otm puts was systematically a good idea? You might have misinterpreted that post and we can both get on the same page.

Can you please explain why my three examples: HLF, BLUE, and SPX 1Y "were poor that over time won't beat inflation " I don't know what that means. What was about hindsight? Those were live prices at the time of the post.

If it's not about ego, then there might be an honest misunderstanding or you might be putting words in my mouth to pick a fight or you might lack basic reading comprehension.

VIXTrader said:
"No one has advocated selling 15percent otm puts systematically."

That's what's called moving the goal posts, and it's how losers debate. Look dude, we've been talking about significantly OTM and 15% specifically for a while now. Don't move the goal posts now that I've proven that even on the single highest peak of IV for the entire year it's a losing strategy.

It's a spectrum of course, there's nothing magical about 15%. It just happens to be what we were talking about. 15% is a non starter. 10% is just as bad, but moving in the right direction. 5% OTM give or take can work if you are just trying to make 5% or so a year annualized. If you really want to make this strategy viable long-term, I'd suggest ATM - 3% OTM range.


"I showed you examples of 15percent otm puts that had significant value"

No you didn't, your examples were poor that over time won't beat inflation. You used a crystal ball in hindsight and still came up with nothing I'd even consider trading. What do you think happens when you look forward without the crystal ball? That's right, a terrible strategy.



This is one of those no brainer everybody should know this already kind of thing. I'm absolutely floored that you don't just accept it as a mathematical fact and move on. The simple fact is, some strategies don't work without enough premium to justify the risk. Even on high IV times of the year, far OTM puts are getting fractions of a percent on capital and you still have to factor in transaction costs, inflation, and drawdowns.



You don't have to come back here with the "last post to you" nonsense. You were wrong, I corrected you, move on. My ego isn't one iota larger than it was before I started talking to you. This isn't a dick measuring contest. For all I know you're a successful trader. In this thread, you're defending the indefensible. Shake it off my friend...
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Read above. XLU on the best day the entire year for this strategy was 3% annualized. Hind sight 20/20, best day of the frickin year, it's still a total dud.

Stop it please, I can't take anymore.
 
i960 said:
So I guess I'm not a retard for thinking ATM or near ATM strategies are the way to go?
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IMO you don't have to make this decision in advance. With each situation, evaluate what your expectations are over that time period with the prices available. If you are looking to sell options only, you don't have to pick one strike. You can sell a few.You also don't have to enter the entire size of your trade in one day at one price at one time.
 
And to make matters even more frustrating, I'm debating with a guy that posted a study on put selling and didn't even bother to read the study.

It says right there on the first page of the study, selling AT THE MONEY puts. I guess you missed that part huh? Near or ATM, you know, exactly what I've been saying the entire time. But yeah, keep thinking there's even one person retarded enough to sell 15% OTM. Sorry, in that you are on an island by yourself.

10 seconds of backtesting will prove significantly OTM doesn't work. Please though, keep trying to push that square peg through the round hole. If nothing else, it's entertaining as hell ! :)
 
VIXTrader said:
And to make matters even more frustrating, I'm debating with a guy that posted a study on put selling and didn't even bother to read the study.

It says right there on the first page of the study, selling AT THE MONEY puts. I guess you missed that part huh? Near or ATM, you know, exactly what I've been saying the entire time. But yeah, keep thinking there's even one person retarded enough to sell 15% OTM. Sorry, in that you are on an island by yourself.

10 seconds of backtesting will prove significantly OTM doesn't work. Please though, keep trying to push that square peg through the round hole. If nothing else, it's entertaining as hell ! :)
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that wasn't me as well. why are you quoting me and saying that I recommended selling 15% otm puts?
 
From VIX:
"I'm debating with a guy that posted a study on put selling and didn't even bother to read the study. "

"It says right there on the first page of the study, selling AT THE MONEY puts."

From the article:

"
Strike selection and impact on risk/return

Selling further out-of-the-money (OTM) puts increased the Sharpe ratio of the
strategy, but reduced the absolute annual returns. We studied selling puts on all stocks
in the S&P 500 at strike prices based on their moneyness (ATM to 15%OTM), their
sensitivity to stock price moves (20-delta to 70-delta), and a target premium collected (1%-
3% per month).


Strike choice methodologies vary across investor types and similarly we don’t find a
particular methodology dominates our study.

Most fundamental investors prefer to
target a particular moneyness when selling puts; Yield focused investors prefer to target a
particular premium; and volatility traders tend to focus on delta targeting strategies. The data does not suggest that any particular standard strike targeting methodologies are superior to others.

"

Just to repeat:

We studied selling puts on all stocks
in the S&P 500 at strike prices based on their moneyness (ATM to 15%OTM)

The
data does not suggest that any particular standard strike targeting methodologies are superior to others.


VIX: We occasionally get crazy people like you on this, and I guess every board. We have all learned from experience that arguing with someone like you is a waste of time. It takes up space and energy and produces nothing. You yell and yell the same thing regardless of what anyone says back and I really don't know what motivates it. At my most charitable all I can say is you should get off whatever drugs you are taking, seek a good therapist and leave the people on this thread, and the world in general alone... you make no contribution and nobody cares.

I would like to tell you to go away and stop bothering people but it is a public forum and, like all such venues is open to anyone who wants to post.

There is, of course, the IGNORE function which is very good for getting rid of the bizarre.

BTW: you are not 'debating' with me. Don't flatter yourself.
 
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xandman said:
What's wrong with taking advantage of a skew?
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Nothing. Selling pure skew is typically a tricky trade because you have spot vol correlations that make modeling your gamma difficult. At least I always found myself under hedged at the worst times.

Taking advantage of skew when selling puts can make a lot of sense if you are compensated properly for it. There are quite a few names where skew gets bid and if you have a view that says contrary to that then you can do well. I have a corporate action name where the skew is so bid that my reward/risk is 5:1 on an event that 50/50.
 
"We have all learned from experience that arguing with someone like you is a waste of time."

Of course, guys like you hate when someone bursts your idiotic bubbles. You prefer being "the man" on the forum, but the problem is you are laughably out to lunch in this thread. As I've stated, I have no time or interest in going through any of your old posts, for all I know you're not a complete idiot. But in this thread, which is my only experience with you, WOW you sound like a rank amateur. You fit right in on this forum.


"Selling further out-of-the-money (OTM) puts increased the Sharpe ratio of the
strategy, but reduced the absolute annual returns. "

It's unbelievable that you needed a study to tell you that. Oh gee, you mean going further out of the money reduced deviations and increased the Sharpe ratio? NO SHIT ! But it also takes your returns below the inflation rate which I've been saying over and over and over again. I never once said you couldn't bang out consistent wins month after month with this lame strategy. My only point was, why the hell would you even bother? You'll have a 95% win rate and still not beat inflation. Congrats !


"BTW: you are not 'debating' with me."

Finally something you got right. Broken clock twice a day and all that... A debate implies it's two sided, and in our case that couldn't be further from the truth. I've given you example after example where even if you called the exact perfect day with the highest IV of the entire year, it's still a total dud that far OTM. Why you can't just admit you're flat out wrong and move on, I have no idea. I guess you feel the need to defend your e-peen on an anonymous forum. Keep diggin that hole my friend, stop when you hit China.


I don't care if you don't like me or like how I'm saying it. You're defending the indefensible. Stop it already, just fade into the night and hope nobody noticed how stupid you sound in this thread. Maybe you can recover some size on the e-peen if you move into other threads and pretend this one never happened :)
 
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