I've been trading the ftse for many years with varied success but overall I make money. Anyone else here do the same?
UK index options
- Thread starter Windlesham1
- Start date
As an options trader I employ any number of strategies but when vol is this low and the market has not had a losing month for 8 months,you have to position for a sudden change-nobody knows the truth about the UK economy,or even worse the US economy. We are at the mercy of slippery politicians who are not averse to stealing from the future.
I would not be selling naked puts that's for sure-in a couple of days this rally could be blown away
I would not be selling naked puts that's for sure-in a couple of days this rally could be blown away
Well it keeps on bumping higher- I have no idea what is driving it apart from bonds being such crap they might as well set fire to their money or buy shares,which may at least yield a dividend even if they halve in value-again.
Some smart comments from condoroptiosn suggest we may be in the lowest vol environment in years for a long while yet.
Some smart comments from condoroptiosn suggest we may be in the lowest vol environment in years for a long while yet.
As a naked put seller, I've been benefitting by the drop in volatlity, as I've been able to close my positions early, as the drop in VIX/IV has make it easier and profitable to close positions early.
Plus having theta work to my advantage has also been helpful.
Not to mention stocks rising.
All reasons I've been able to close positions for a substancial profit, in 1/3 the life of the contract.
It's the put buyers who are getting killed. Not the put sellers.
However, one needs to be a selective stock and strike picker, to be successful as a put seller.
Put Master you are right 80% of the time but when you are wrong,try closing out your positions at market open when there's a 5% drop on a Sunday. I sell put premium of course but I moderate it with some longs,so costs are next to zero,with tiny risk but massive profit potential-it usually works twice a year-you don't want to be on the wrong side then
My record is actually better than 80% of the time.
But that's not the issue.
The issue is, "you" are correct about the consequences of trying to close a naked put position, when there is a spike in VIX/IV, and the stock is dropping.
Hence the importance of stock and strike selection, when selling a naked put.
Hence the reason I am prepared to buy and hold 98% of my positions, if they are potentially put to me.... as closing them down might be expensive.
Hence, I'm prepared to sell covered calls, collect divdends and "manage the recovery", of my positions that are put to me.
Hence the importance of NOT using excessive leverage, diversifying among stocks and sectors, being picky about stock and strike selections, and laddering expy dates among multiple months.... if one sells naked puts.
Good life to you sir as Peter Griffin would say. I have nothing but praise and admiration for any of us retail traders who make money. It can be done-we do it, despite the headwinds of trading against the evil empire of the banksters and their insider trading.
I've had to slow donw due to other commitments but still made a tiny 11% last year.
I've had to slow donw due to other commitments but still made a tiny 11% last year.