Short put is deep ITM. Advice!

[BlueWaterSailor]

With all due respect my love

Not even if you grow tits on your back, fellah. I'm hopelessly straight, no matter what today's fashions dictate.

Not too many Great Whites around Puerto Rico these days, so that scenario isn't very plausible (and gawd, I'm so glad that scenery-chewing shit of the 70s is mostly gone from the screen...) And no, sharks don't normally attack boats... who the hell came up with that stupid plot, anyway?

The whale would probably have shaken it loose somewhere in the Mona once he stopped panicking, and I suspect the Coasties would have spotted it out there pretty quick - they're always on the lookout for illegals crossing from the Dominican Republic. Maybe that's a little too prosaic for you, but life is like that... although there are plenty of things at sea that no landlubber would ever believe.

 

[macanoni]

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...

Actually, it is not just one trade that I am looking at from a portfolio perspective. I am OK to have my stock portion of my portfolio drops 15-20% (not gladly, ofc). As a conservative, buy-and-hold investor, my portfolio was the typical 60% stock/stock fund & 30% bond funds and 10% cash. This year, this model is out of whack. I was content, in years past, to have my bond portion performance around 4%, my stock portion went up and down with the market, with a total portfolio performance ~7-12%. I disliked it when the stock market was running so hot the last couple years as I think it would come down eventually. But what I did not anticipate is how much my bond portion dropped this year. To have a bond portfolio dropped in the 2 digits was heart-wrenching. I was willing to forgo gains in the long term, in order to have some safety in the bad years. It did not happen this year. This never happened before. And to add fuel to the flame, inflation is running wild. What a conservative investor to do? Damned if you do, dammed if you don't. My porfolio is now 40% stock/30% bond and 30% cash. Not feeling that great, but I do sleep well at night. But this makes me angry and feeling exasperated.

 

[BlueWaterSailor]

And to add fuel to the flame, inflation is running wild. What a conservative investor to do? Damned if you do, dammed if you don't. My porfolio is now 40% stock/30% bond and 30% cash. Not feeling that great, but I do sleep well at night. But this makes me angry and feeling exasperated.

Given the volatility this year, that's not at all surprising - which is why it's a really good idea to think twice about bullish (or at least neutral-to-bullish) strategies like selling puts. Every trade you take is a view that you're expressing about the market - and this one does not fit what's going on.

From my perspective, this is a good time to get conservative, stay mostly in cash, and take only risk-defined trades that fall well within your tolerance - or perhaps pause trading if you're not sure of what your edge is. A rising market, which is what we've had for years, is somewhat of an edge - but that's not what's happening right now.

 

[Overnight]

Not even if you grow tits on your back, fellah. I'm hopelessly straight, no matter what today's fashions dictate...

So am I. It is a term of endearment you silly man, it has nothing to do with sex. Like loving your brother. You are hopelessly lost in the weeds if your think my admonition of you is sexual. Dude, I love your BRAIN!.

And as far as this?..."From my perspective, this is a good time to get conservative, stay mostly in cash,..."

I agree. We need to let the Fed find it's way, because it is totally lost after this last CPI print. They need to bury themselves in some fantasy football! HELL YES! MICHEAL IRVIN ENERGY for the COWBOYS!

Roffle

 

[BlueWaterSailor]

So am I. It is a term of endearment you silly man, it has nothing to do with sex.

I just enjoy (mildly) twitting you. You give me lots of chances to do it, and I appreciate that.

And as far as this?..."From my perspective, this is a good time to get conservative, stay mostly in cash,..."

I agree. We need to let the Fed find it's way, because it is totally lost after this last CPI print.

Are you seriously implying that there was a time when they weren't totally lost??? Never took you for such an innocent, trusting soul.

Macroeconomics is called the "dismal science" for a reason. Once in a while, you get some guy like Milton Friedman who can just figure things out (like the entire Euro econ situation after WWII) and make them work, but for the most part, government interference in the economy is much like a man trying to walk on a rope high above the ground: tiny corrections may be necessary, but anything more than that leads to flailing, overcorrections, and usually a crash with a bloody smashed corpse below.

Not that they give a crap, since they're never the ones paying for it...

https://www.nbcnews.com/id/wbna27335454

 

[Overnight]

I just enjoy (mildly) twitting you. You give me lots of chances to do it, and I appreciate that.



Are you seriously implying that there was a time when they weren't totally lost??? Never took you for such an innocent, trusting soul...

2017 ruined me, man. The markets in 2017 was...

Frak! I miss those days, in between Trump, Yellen and Powell. Like a slack water after high-tide! Just all calm and nice. Yum. Those days are gone. Hold me!

 

[BlueWaterSailor]

I miss those days, in between Trump, Yellen and Powell. Like a slack water after high-tide! Just all calm and nice. Yum. Those days are gone. Hold me!

"Perhaps what you are looking for is a long-range comprehensive investment program, conservative yet liberal, which will protect you from the effects of inflation and also deflation and which will allow you to sleep nights … I will see to it personally that your inquiries are referred to the Head of our Crystal-Gazing Department."
-- Fred Schwed, "Where Are the Customers' Yachts"

 

[lightninboy]

I get terrified just thinking about a spread going into the money or needing adjusting or losing money. And strangles, straddles, butterflies, condors, verticals, calendars, lizards sound like complicated BS. I'd rather wheel puts and if I get assigned I get a second chance selling covered calls. A heart needs a second chance. I guess that's just the cowboy in me.

 

[taowave]

Good luck with that

I get terrified just thinking about a spread going into the money or needing adjusting or losing money. And strangles, straddles, butterflies, condors, verticals, calendars, lizards sound like complicated BS. I'd rather wheel puts and if I get assigned I get a second chance selling covered calls. A heart needs a second chance. I guess that's just the cowboy in me.

 

[macanoni]

Given the volatility this year, that's not at all surprising - which is why it's a really good idea to think twice about bullish (or at least neutral-to-bullish) strategies like selling puts. Every trade you take is a view that you're expressing about the market - and this one does not fit what's going on.

From my perspective, this is a good time to get conservative, stay mostly in cash, and take only risk-defined trades that fall well within your tolerance - or perhaps pause trading if you're not sure of what your edge is. A rising market, which is what we've had for years, is somewhat of an edge - but that's not what's happening right now.

Yes, I am not doing any trading at the moment. I plan to take the time to reevaluate and learn more about options before trading. I might ask some questions regarding hypothetical scenarios to educate myself, in future threads. Thanks all for your valuable advice.