Strategy: Selling Put Options: The Best Income Method?

There are ways to replicate the (sic) "income" on a synthetic covered call without variation-margin, but you know it all, so I'll let you figure it out.
 
destriero said:
Your post 107.
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Hmm. sorry, no, in posting #107 I don't see any 2015 mentioned.

100-share equivalent, cash-secured, equals $9,833. Trading one contract ($145 credit) per 100-share equivalent in capital. 1.7% return to July exp. 4% annualized.

So, assume that you go the other way, and trade as many as Reg-T will allow:

85-lots per $100K. 12% return out to July. 33% annualized. This assumes (moronically-so) that you'll never receive a variation-call on your PEP short-put position, and that you can replicate the same vola figure when you roll in July.

Let's assume that you apply a 5x cushion (5x initial margin = 16 lots/$100K).

A 6% annual return for selling naked puts.
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Hmm. sorry, I don't get it. 6% profit annually isn't enough IMO, at least not for me.
For me it should be at least 25% p.a., just my humble opinion...
The whole tricks using margin and leverage have the sole purpose of increasing the profit,
ie. multiplying by the leverage, which is simply this multiplication factor:
1 / (own_money / margin_or_loan)

And "cushion" usually is used in conjunction with stop-level (stop or trailing stop).
 
botpro said:
Hmm. sorry, no, in posting #107 I don't see any 2015 mentioned.


Hmm. sorry, I don't get it. 6% profit annually isn't enough IMO, at least not for me.
For me it should be at least 25% p.a., just my humble opinion...
The whole tricks using margin and leverage have the sole purpose of increasing the profit,
ie. multiplying by the leverage, which is simply this multiplication factor:
1 / (own_money / margin_or_loan)

And "cushion" usually is used in conjunction with stop-level (stop or trailing stop).
More...

I'm out. I don't help the indignant-types.

Here's where you stated 2015:

I did a quick scan of the S&P500 stocks and found that there are much better stocks suited for this strategy, for example PEP (Pepsi) Jul 15 Puts with strike $90 for about $1.70 premium,
 
destriero said:
I'm out. I don't help the indignant-types.

Here's where you stated 2015:

I did a quick scan of the S&P500 stocks and found that there are much better stocks suited for this strategy, for example PEP (Pepsi) Jul 15 Puts with strike $90 for about $1.70 premium,
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This is the expiration date "the 15th of July" (in current year)!!! ;-)))
The 15 does not mean the year 2015! ;-)
 
At this time I'm concentrating myself wholly just on put selling only.
No synthectics and no other options selling strategies which just would distract me and complicate the learning process.
Because I need to grasp all facettes of this througly first, and only after that can I continue studying the other alternatives...
 
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Dude you are going to get so beat down - you're not heeding anyone's advice and this is classic "I can make a boatload of money selling options!!!" naive stuff.

Repeat after me: NO. FREE. MONEY.
 
botpro said:
The PEP posting was made on 2016-03-02-Wed at 09:15 EST, ie. 15 minutes before market open,
and used the EOD database as basis, ie. the EOD-prices of the day before.
So, no time-travel here...

And these were the quotes at 10:31AM, ie. 1h after market opening:
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I thought you had optioncoach on ignore after he didn't prove that intc could gap on the open.
 
destriero said:
Great, how about applying 20% of Reg-T? (Explicitly, 5x leverage)

$145 credit for shorting the put. $240 in initial req. Short 416 contracts per $100K in capital.

PEP drops to $90 next month. Your puts are now at $4.

You have an unrealized loss of $67,000; but wait, it's realized, as they liquidated your account, at-market.
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I would say this example is just distracting/distorting from what is mainly discussed here, ie. the recent PEP example.
Why do you do that all the time in your postings? Ie. you also tried to bring in synthetics etc...
I need to concentrate myself on just the most basic variant of this plus the application of margin.
But yours is IMO yet another different and hard to understand variant, so I don't get it,
because at spot=90 there should no loss happen for a strike of 90...
 
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