Selling Naked
- Thread starter nugya
- Start date
You do mean selling naked CALLS I hope -- Anyone selling naked PUTS in this market really deserves whatever they have coming to them.
This market is so volatile, that the premiums for the CALLS would really have to justify selling NAKED.
NAKED selling of options is a good way to get fried if you don't know what you are doing.
I've never sold NAKED and I never intend to sell NAKED.
This market is so volatile, that the premiums for the CALLS would really have to justify selling NAKED.
NAKED selling of options is a good way to get fried if you don't know what you are doing.
I've never sold NAKED and I never intend to sell NAKED.
Selling naked is like Russian Roulette.
You'll win the game almost every time you play, but the one time you lose, you're fucking dead.
You'll win the game almost every time you play, but the one time you lose, you're fucking dead.
This is probably not the best environment to be selling naked puts for constant money. I do some selling so I will give you what I can.
Under no circumstances will I sell a naked put on something that I don't want to own. Even at that, I use a scale in technique rather than being a piggy. And in this market, I think you are better just marrying it with a short.
If I am selling the put as a trade, I would only sell the front month and just under support. This lets time decay work for you. So, QQQ 20 or 19 would do the trick.
If I am selling the put to get long exposure, then I go out as far as I can. Jan 05 and under current support. Many of these I will cover into rallies.
Under no circumstances will I sell a naked put on something that I don't want to own. Even at that, I use a scale in technique rather than being a piggy. And in this market, I think you are better just marrying it with a short.
If I am selling the put as a trade, I would only sell the front month and just under support. This lets time decay work for you. So, QQQ 20 or 19 would do the trick.
If I am selling the put to get long exposure, then I go out as far as I can. Jan 05 and under current support. Many of these I will cover into rallies.
Until recently I used to think that selling naked options is something I would not do. But then if Somebody asked me if I would be comfortable with selling covered CALLS, I would say "YES". In reality my fate would be the same if the underlying value went to 0.00.
Now I feel that selling naked PUTS is OK as long as I know the amount of risk I am taking and I am happy with the return.
We know that travelling by car or flying carries some risk but we still do it, because we are happy with the statistical odds.
Specially if I sell PUTS of index options (QQQ, DJI) they are less risky as they would never end up with 0.00 value.
Now I feel that selling naked PUTS is OK as long as I know the amount of risk I am taking and I am happy with the return.
We know that travelling by car or flying carries some risk but we still do it, because we are happy with the statistical odds.
Specially if I sell PUTS of index options (QQQ, DJI) they are less risky as they would never end up with 0.00 value.
Selling naked puts is the fastest and safest way to make money in this market, but it is essential to know exactly what to sell, when to sell it, when to cover, and never take too much risk. (I personally don't open any positions that would leave me with a negative account balance if every stock that I am short naked puts of went to zero.
If you follow those rules and actively trade your puts, you can easily make a few points (!) per month off NVDA puts right now.
Even people who don't quite get it and say they would never sell naked options (but they certainly WOULD sell covered calls, since they are definitely covered, so how could they possibly be naked?) can make money off the same puts by selling a put spread, which in this case is essentially the same.
Extended warranty! How can I lose?
Let's roll!
But wait, there's more!
If you follow those rules and actively trade your puts, you can easily make a few points (!) per month off NVDA puts right now.
Even people who don't quite get it and say they would never sell naked options (but they certainly WOULD sell covered calls, since they are definitely covered, so how could they possibly be naked?) can make money off the same puts by selling a put spread, which in this case is essentially the same.
Extended warranty! How can I lose?
Let's roll!
But wait, there's more!
Originally posted by u130747
Don't do it.
i did it in 1987 and got fried. I received the 2000.00 for the naked put but they made me settle for 140,000 out of my pocket.
It ain't worth it.
Bert
Sorry to hear that, But it looks as that it did not dampen your spirit. What you had there,the reward was 0.01% of the total risk, which I agree it is not worth. The play I have at the moment is 0.05% return on the total risk. That is with index going to 0.00 which I dont think would ever happen(.....or would it??????)