So how are those put selling programs working out?

[Engine99]

Quote from Ash1972:

"Reset"..

What a wonderful euphemism

Reset is exactly what my account is approaching (and yes, I'm selling premium)

The blue line is my account performance since the last time I've had a reset (May 6th 2010 aka da Flash Crash)



Right now I'm barely green for the year and another day like today and I'll join the red line (aka the S&P 500) for a negative yearly performance.

Destroys confidence and trading accounts

engine
aka theclosetgambler.com

 

[Strangler]

Quote from Engine99:

Reset is exactly what my account is approaching (and yes, I'm selling premium)

Right now I'm barely green for the year and another day like today and I'll join the red line (aka the S&P 500) for a negative yearly performance.

Destroys confidence and trading accounts

engine
aka theclosetgambler.com

I hear you bro... My SPY 130 short straddle isn't looking too good right now. :eek:

If I was trading ICs it would be even worse.

 

[oldtime]

Quote from stock777:

I notice very little comment on the wonderful easy money that must have been made

no lie, thank goodness spindro talked me out of that one.

I keep looking for old threads like "Buy Puts and Make a Fortune" or "Beat the Market by Selling Calls"

But I guess those guys are to cool to post.

 

[rew]

Quote from Butterball:

Or what about those guys selling covered calls as a hedge.. or for "income"? How are they doing this month?

All their covered calls are expiring worthless. They certainly did no worse than the long only investors who didn't sell covered calls.

 

[oldtime]

Quote from rew:

All their covered calls are expiring worthless. They certainly did no worse than the long only investors who didn't sell covered calls.

"are expiring"? "did no worse"?

I don't know much about options, but I know a thing or two about time, and as far as I know, options do not expire 8/8.

And where there is time there is hope.

 

[daveyc]

all of those popular credit spread stategies are a sure way to financial ruin. a couple of weeks like this is all you need to prove it to yourself but yet this is all i see all over the 'net. covered call trades are amongst the worst trades i have ever seen and yet they are touted still as the safest strategy in the world ever. a loss is a loss even if you are holding a stock but have not sold it yet just because you intend to sell upside calls against it no matter what they tell you.

 

[newwurldmn]

Quote from daveyc:

all of those popular credit spread stategies are a sure way to financial ruin. a couple of weeks like this is all you need to prove it to yourself but yet this is all i see all over the 'net. covered call trades are amongst the worst trades i have ever seen and yet they are touted still as the safest strategy in the world ever. a loss is a loss even if you are holding a stock but have not sold it yet just because you intend to sell upside calls against it no matter what they tell you.

It's not the selling premium that kills you. You don't make money in times like this, but you hopefully outperform in other times to make up for it. The problem is doing it with massive leverage, actual or in notional terms. A guy with a 100k account has no business being short options premium with 1MM notional.

 

[MTE]

Quote from newwurldmn:

It's not the selling premium that kills you. You don't make money in times like this, but you hopefully outperform in other times to make up for it. The problem is doing it with massive leverage, actual or in notional terms. A guy with a 100k account has no business being short options premium with 1MM notional.

I agree, making a broad statement that premium selling kills is pointless, since the problem is not selling, but the leverage that some people use. This selloff has been rather "orderly", which means that if you had stop-losses then you could've got out of the way without significant damage.

 

[oldtime]

Quote from MTE:

I agree, making a broad statement that premium selling kills is pointless, since the problem is not selling, but the leverage that some people use. This selloff has been rather "orderly", which means that if you had stop-losses then you could've got out of the way without significant damage.

yeah, but I'm a bull. No matter what the market tells me, I think it's wrong and I'm right.

So when I get stopped out, I think about it for a while and realize at these prices I'm even more a bull, and just put on the same position with a lower stop.

My only edge is how much the mkt drops while I am thinking about it.

Sometimes, you just got to bite the bullet and get long and buy a put, if you're that stubborn about your opinion.

Takes a heck of a move to pay for all those puts. But then, everything I have to show for myself is the result of a heck of a move (or luck.)

 

[rew]

Quote from oldtime:

"are expiring"? "did no worse"?

I don't know much about options, but I know a thing or two about time, and as far as I know, options do not expire 8/8.

And where there is time there is hope.

I feel confident that the great majority of covered calls that were sold OTM for August or September will indeed expire worthless.

A crash like we've just had doesn't recover in a week and probably not in a month.