Strategy: Selling Put Options: The Best Income Method?

At the moment most technical indicators like MACD show that the market will drop in near-term,
so going long at this very time is normally not recommended for most of the stocks.
That's of course also a bad timing for shorting puts of the most stocks and indices...

Update:
I think I have to correct the above statement because for example SPY is in uptrend (incl. in MACD) since mid of February,
so it could be a good time for going long the stock/long the calls/short the puts...

Update-2:
The confusion comes if one looks at the weekly and monthy charts... Then it does not look good...
 
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destriero said:
I don't know how to explain it to you in other terms. Delta refers to to the inst. price change. So assume that your PEP puts have a delta of fifteen. You're gamma refers to your gearing w.r.t. delta. So if your delta is fifteen, and your gamma is three, you're going to lose more than you believe. You're also short dgamma, but we won't get into that. Suffice to say, all increase until you get to the strike. IOW, something in excess of $0.15 per point ($15), per contract.

Do you think your vega (exposure to vol-line) will go UP or down if PEP shits the bed?

And what you believe is immaterial. You don't even know enough about the product to go live. I am telling you that these things don't test like delta1. There is curvature in everything.
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As I told you, I'm not interested in those f'uped opt greeks, just respect this. I have other things to todo.
Hey, just be happy that the greeks seemingly help you, and keep it just for you. I'm not interested in the greeks. Basta!
 
botpro said:
As I told you, I'm not interested in those f'uped opt greeks, just respect this. I have other things to todo.
Hey, just be happy that the greeks seemingly help you, and keep it just for you. I'm not interested in the greeks. Basta!
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I was explaining to you that it's retarded to drive at night with your lights-off. Consider my metaphor in the future. If you can't arrive at a price, regardless of how you stress it, then you're driving blind. The mkt says no f*cks given to your MACD BS.
 
bruce lee wtf.jpg
 
destriero said:
I was explaining to you that it's retarded to drive at night with your lights-off. Consider my metaphor in the future. If you can't arrive at a price, regardless of how you stress it, then you're driving blind. The mkt says no f*cks given to your MACD BS.
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Ok, come on and show how the greeks will be of any help in the said "no-loss goal" problem situation.
I'm really very curious about your answer...
 
botpro said:
Ok, come on and show how the greeks will be of any help in the said "no-loss" goal situation.
I'm really very curious about your answer...
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You'd stated that "it won't produce a loss..." well then why would anyone take the trade as counter-party? You're at Step 1 of a 12-step program and you're conflicted. You just discovered "short premium" and have this mindset that all opshuns are meant to be sold. Yes, we've seen it before and it's comical -- the outcome? Not so much.

You're looking at the July 90P. OK. Quote the July 97.5P as a proxy for the 90 *IF* PEP were to trade to 91 *today*. No greeks, no GBM, just market-pricing.

The risk of PEP hitting ninety by JulEx is admittedly low -- ITM prob of 20%, touch probability of 40%. This is based upon statistical-vol, not IV. The issue is not the terminal price, but the route it takes to get there. You will be filled on a market-order if you receive a variation-call and you be forced to cover all of your positions (corr=1) in a similar fashion.

Don't sell naked puts. Trade defined-risk through spreads. If for no other reason that short puts require variation margin. I am done "helping" you as you're an indignant tool that alternates between thinking he knows everything to knowing nothing at all.
 
botpro said:
Ok, come on and show how the greeks will be of any help in the said "no-loss goal" problem situation.
I'm really very curious about your answer...
More...

People have told you or given you information and you argue against anything even though you have a limited knowledge of options and then you ask us to show you or prove to you like we owe you something more. Stop the verbal diarrhea already here with your thoughts and just go make some trades and let the market teach you rather than guess and ignore people here telling you the facts.

Shit or get off the pot already, just place a trade and work from there.
 
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