Selling Naked

[nugya]

I suppose we cannot really compare trading futures against selling PUTs naked as they have different risk/reward ratio

But from risk point of view only, they are more or less the same

OK ,it looks as that once again,we miss the topic of this tread;

IS there anybody out there who is making small but constant money selling Naked PUTS???

 

[nugya]

Originally posted by Htrader


The real difference between the two is that you have limited profit potential with selling puts while you have practically the same downside risk.

Nope I am too late

 

[Maverick74]

Originally posted by nugya
Lets assume that we are talking European style options and expiry plays, where greeks don't mean much at expiry.

I am trying point out that selling naked PUT is no more riskier then trading eminis long/short

With selling options even if the market goes against you, time will be on your side

Nugya, I'm just going to take a wild guess here but you have never traded options before have you? Selling naked puts on 0ption expiration makes Las Vegas look like a candy store. You want to talk about giving up the vig to MMs. Have you ever seen the average spread on a OTM put on expiration friday? If you have and your telling me that you would rather give that MM your put in return for pennies and I mean pennies for a long play in the market then that is something else.

Selling a naked put and going long the underlying are not, I repeat not the same thing. They only have the same P&L profile at expiration. But before expiration they are not the same. In some cases not even remotely close to being the same.

Now as far as doing it on expiration Firday, the same holds true but for a different reason. If you go long the mini you are giving up hardly any edge, but by shorting the put, the MM is hosing you big time. If you draw a parity graph using the long mini and the short put you will see that when you incluse transaction costs and slippage, the two lines don't even resemble each other.

 

[nugya]

Sorry to disappoint you but I have been trading options for some time.Pls read my earlier posts.

I think you have misundersood me. I never said trade options on expiry day. I said Expiry play where you sell PUT during the life of option e.g 30 days before expiry and and do not buy it back

beside that I think we agree, thanks

 

[nugya]

Originally posted by Maverick74


Nugya, I'm just going to take a wild guess here but you have never traded options before have you? Selling naked puts on 0ption expiration makes Las Vegas look like a candy store. You want to talk about giving up the vig to MMs. Have you ever seen the average spread on a OTM put on expiration friday? If you have and your telling me that you would rather give that MM your put in return for pennies and I mean pennies for a long play in the market then that is something else.

Selling a naked put and going long the underlying are not, I repeat not the same thing. They only have the same P&L profile at expiration. But before expiration they are not the same. In some cases not even remotely close to being the same.

Now as far as doing it on expiration Firday, the same holds true but for a different reason. If you go long the mini you are giving up hardly any edge, but by shorting the put, the MM is hosing you big time. If you draw a parity graph using the long mini and the short put you will see that when you incluse transaction costs and slippage, the two lines don't even resemble each other.

Nope we dont agree on this as well;

1) selling naked PUT and going long the underlying does not have same P/L. Same L but not same P.

 

[nugya]

I only started selling Naked PUTs recently. In the past I always had a cover.That is the reason i started this tread, to see if there is anybody out there doing the same thing

 

[Bob111]

Originally posted by nugya
I only started selling Naked PUTs recently. In the past I always had a cover.That is the reason i started this tread, to see if there is anybody out there doing the same thing

something like this for example-you sell QQQ 19 puts for this month,
@ expiration-price fell below strike(if it happends- VIX will be somewhere in 55-60)-this never happends before, but we pretend it will. after expiration you long on it-sell calls and sell more puts @ lower strike and so on....

 

[Pabst]

Originally posted by trdrmac
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. and under current support. Many of these I will cover into rallies.

I've always felt tradrmac that if you want to price an issue below the market, you'd might as well sell the put. At least you're getting paid for trying to buy stock on the cheap.

 

[dreamer]

Quote from Maverick74:



Give a man some rope and sooner or later he will be able to justify his own hanging.

I would tell you to re-think that statement but for some reason I don't think it will matter.

You need to think outside the box, Maverick. Much money is made selling naked options, calls as well as puts. I know, I do it for a living and make between 200% and 300% on my portfolio year after year. My portfolio is balanced and will survive anything.

Good luck trading to all,

Bob on whidbey Island


"Don't confuse efforts with results"

 

[dreamer]

Quote from Htrader:



The real difference between the two is that you have limited profit potential with selling puts while you have practically the same downside risk.

If you think outside the box and trade properly, there is no risk to writing naked puts.

Good luck trading to all,

Bob on Whidbey Island


"Don't confuse effort with results."