Selling Naked

Quote from dreamer:



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.
More...

That's exactly it. If you sell 100 naked MSFT puts in a $100,000 account, don't expect to survive, but if you sell 50 different naked calls and 50 different naked puts (in an IB account of course) there is not much that can happen to you and you'll make 20% or so every month.
 
Quote from Lobster:



That's exactly it. If you sell 100 naked MSFT puts in a $100,000 account, don't expect to survive, but if you sell 50 different naked calls and 50 different naked puts (in an IB account of course) there is not much that can happen to you and you'll make 20% or so every month.
More...

Great, so now you expose yourself to both a rally tail and a bear run.

A naked call isn't going to reduce the risk of your naked put by all that much -- you're getting twice the premium but now you're opening yourself to a bear AND bull run. What happens if I sell a lot of 60 Jan calls on MSFT and a lot of 50 jan puts on MSFT and MSFT rallies to 75 or word gets out that Bill is a transexual and the stock plummets?

Where is Metooxx? Unusually quiet since this is your bread a butter -- let's hear it from the expert!
 
Quote from dreamer:



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."
More...

There is always risk to naked positions or they wouldn't be naked ...
 
Quote from Lobster:



That's exactly it. If you sell 100 naked MSFT puts in a $100,000 account, don't expect to survive, but if you sell 50 different naked calls and 50 different naked puts (in an IB account of course) there is not much that can happen to you and you'll make 20% or so every month.
More...

Agree; sort of ...
 
Quote from aphexcoil:



Great, so now you expose yourself to both a rally tail and a bear run.

A naked call isn't going to reduce the risk of your naked put by all that much -- you're getting twice the premium but now you're opening yourself to a bear AND bull run. What happens if I sell a lot of 60 Jan calls on MSFT and a lot of 50 jan puts on MSFT and MSFT rallies to 75 or word gets out that Bill is a transexual and the stock plummets?

Where is Metooxx? Unusually quiet since this is your bread a butter -- let's hear it from the expert!
More...

The idea is not to do them on the same underlying or correlated group ...
 
Quote from metooxx:



The idea is not to do them on the same underlying or correlated group ...
More...
If you did it on the same underlying, you would be synthetically short [depending on strike of course, but the delta would approximate the short...]

nitro
 
Quote from nitro:


If you did it on the same underlying, you would be synthetically short [depending on strike of course, but the delta would approximate the short...]

nitro
More...

Not doing them on a correlated group is important ...
 
Quote from nitro:


If you did it on the same underlying, you would be synthetically short [depending on strike of course, but the delta would approximate the short...]

nitro
More...

I thought he was getting @ a strangle; but I am not very sharp tonight ...
 
You must log in or register to reply here.
Back
Top