There was a thread on ET a year or two ago that had a link to an article that said you should only sell options, a spread includes buying options and you should never buy options, spreads are for pussies and are sabotaging yourself and doubting yourself. I wish I had kept track of that thread.
Short put is deep ITM. Advice!
- Thread starter macanoni
- Start date
That was definitely a GTC thread..Good till Correction...
Yup,pussies buy gamma but live to tell....
Yup,pussies buy gamma but live to tell....
Effin' cowards. If they're not maxing out their student loans + stimmies on 0DTE FOTM Bitcoin calls, I don't even want to hear their whining.
(This is how we improve the breed around here. Say, was that the sound of imploding accounts I just heard?...
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Effin' cowards. If they're not maxing out their student loans + stimmies on 0DTE FOTM Bitcoin calls, I don't even want to hear their whining.
(This is how we improve the breed around here. Say, was that the sound of imploding accounts I just heard?...
Classic Larson comic panel. I knew I liked you.
Again, you're missing perspective. By writing that put, you agreed to take a loss on either the put or the stock if it went against you - and once it drops by $20 or so, there's absolutely no difference. Whether you "shell out" the $20k or not, your losses will be exactly the same, $1 per point. If moving that $20k from cash to stock (which is in itself P&L-neutral, and so nothing to be afraid of) bothers you, then you may be trading too large for your level of risk tolerance.
Think of it this way: there's a non-zero chance that you will lose the entire notional value of your trade (here, strike * 100 - premium.) If that's too big of a chance for you to take, then find strategies where you're risking less. As Jesse Livermore put it to a trader who was worried about being too deep into a certain stock, "sell down to the sleeping point."
Not stupid; having the courage to ask questions and the wit to listen to the answers is how you get better. You've paid a couple of hundred bucks for your education so far... cheap at 10x the price. I can tell you from experience that it could get one hell of a lot worse.
All the advice I've seen you get here is solid; @taowave in particular has nailed all the bits you need to understand (although you'll need to do some reading to really get it fully - especially the bit about "option repair"/calendars.) Trade small, let what you know define your limits, and keep learning. Good luck.
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These webinars are designed to make trading look easy just to lure in newbie traders. Whom always get way over their heads and end up flat broke. Refuse to believe me? Hit me back in like 2-3 years.
I'd say only about 5% of traders with 5+ years experience learn how to become consistently profitable. (I am being generous BTW.)
I'd say only about 5% of traders with 5+ years experience learn how to become consistently profitable. (I am being generous BTW.)
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There is no pussies in anything only whether it's the appropriate strategy to take given the information known. Gamma buying/selling, shorting/longing Vega all have their places in the realm of options trading. You just need to know when to employ which strategies. For me using options to buy/sell an underlying is just inefficient no matter the timeframe of the trade.
Looks like MDT has recovered past your B/E. How do you feel about this trade now?
I'm actually asking with a purpose - because at times like this is when the world looks all bright, new, and shiny, and you end up revising the story you've been telling yourself about how "it's going to crash" into something much more hopeful. Be careful about these stories - they're the thing that will drive you into a guaranteed loss. It's a classic example of trading based on emotions. As someone mentioned, hope is not a strategy - and that all these stories are.
Again: develop a plan. Yes, it's difficult; yes, you'll modify it or completely revise it as time goes on; yes, there are a lot of situations to think about (and you'll have to add more to it as time goes on, because the market will hurt you in ways that you never even thought to expect.) But unless you develop a rational framework around trading - and that's not specific to options - you will lose, and you will lose BIG.
Sticking to whatever plan you've developed is yet another challenge...
What's wrong with getting assigned ??
As a long term "value" investor,I would think you would love buying stocks at a discount...
You think Buffet sell puts to collect premium??
I don't think you fully understand that once your put is ITM,you have all the downside risk and no upside above the short strike.You are effectively short that call..
Had you bought the stock at 104,what would you be doing??
I already know
I have not heard of Buffet selling puts to buy stocks. He would outsize the equity derivs market in 10 seconds.
He did sell puts on the indices, but he, himself, was outsized by the annuities that were hedging long dated exposure. That was in 2007ish.