What strategies do you guys use?
- Thread starter klurby
- Start date
Well, until you have experienced it personally, you really won't believe me or anyone else. You have been doing this for all of, what, 6 months, right? So I guess you haven't actually encountered a situation when the mkt in the wings goes offerless?
At any rate, good luck to you! Being philosophical about it, experiencing pain as a consequence of one's errors is an aspect of education (just like everything else in life) and, as such, extremely useful. Pls do let us know in a few years how you've done. Best of luck and may the Force be with you!
CL and NG rally 10% and your maintenance req goes to $75k. Another 5% and you're on call and your broker is lifting offers on those calls (CL and NG) for a loss of $20-$30k. Not being able to trade (your words) is no excuse for being this careless.
You may never look at volatility, but you should become intimately aware of gamma and speed. It's ruinous well before 0.01 becomes 0.50. I don't give two sh*ts if you blow up, and I would probably find it pretty humorous, but your ego needs a check with the "never look at volatility again" BS. There is no policing of stupidity in the markets.
You may never look at volatility, but you should become intimately aware of gamma and speed. It's ruinous well before 0.01 becomes 0.50. I don't give two sh*ts if you blow up, and I would probably find it pretty humorous, but your ego needs a check with the "never look at volatility again" BS. There is no policing of stupidity in the markets.
as a vol trader i seem to have apparently missed how to get double my premium...can you please clue me in how this is achieved?
Speaking of blowups... Rumor going arnd that one of the biggest options locals in Spooz went tits up yest. 200 large is the number being bandied arnd. All with large pinch of salt though.
I have no idea what it was on... For all I know they might have been long vol and it went down. Lots of speculation going on here.
With regard to Betapeg and his trading: I can say that it is possible to make money by selling otm options, but the numbers that most people use are always wrong. You cannot make 50% per year as is claimed here and only have a 1-2% drawdown. In the long run you may be able to make 20 or 30% but you will have a 50% drawdown. If you happen to retire before the infrequent but inevitable giant gap move, then that is just luck not skill.
The position screen shot that was posted had 10 CL, 30 NG, 10 ZC, 10 ZS, and 10 ZW. I would give credit for diversification but there are only two groups represented here. I believe it was posted that to be short these options one only need $100,000 in their account. Herein lies the problem, and why people who do attempt this strategy do not sell so far out of the money. You need way more capital than that, thus the return is nowhere near 5% per month. If you were crazy aggressive you would need $300k, and to be just normally aggressive you would need $600k to hold these positions. Taking in $5k on a $100k account seems great, but use a more realistic number of a $500k account and all the sudden the return is nothing to get excited about, unless making 1% in about two months while at the same time being subject to at least a 50% drawdown gets you excited.
Everyone who takes home a position in an underlying has the same as naked option exposure risk, so the vast majority of the world is naked short puts and the short sellers are naked short calls. The main problem is not with being naked short, the main problem is one of leverage and therefore your actual risk vs. return ratio.
The position screen shot that was posted had 10 CL, 30 NG, 10 ZC, 10 ZS, and 10 ZW. I would give credit for diversification but there are only two groups represented here. I believe it was posted that to be short these options one only need $100,000 in their account. Herein lies the problem, and why people who do attempt this strategy do not sell so far out of the money. You need way more capital than that, thus the return is nowhere near 5% per month. If you were crazy aggressive you would need $300k, and to be just normally aggressive you would need $600k to hold these positions. Taking in $5k on a $100k account seems great, but use a more realistic number of a $500k account and all the sudden the return is nothing to get excited about, unless making 1% in about two months while at the same time being subject to at least a 50% drawdown gets you excited.
Everyone who takes home a position in an underlying has the same as naked option exposure risk, so the vast majority of the world is naked short puts and the short sellers are naked short calls. The main problem is not with being naked short, the main problem is one of leverage and therefore your actual risk vs. return ratio.