When Danger Lurks In Front of Cash Secured Puts

[Nickko344]

"Tradelosses" I'm beginning to question you. Nothing but negative comments, and the ones that aren't ..make you sound like you have no clue about trading.

 

[tradelosses]

"Tradelosses" I'm beginning to question you. Nothing but negative comments, and the ones that aren't ..make you sound like you have no clue about trading.

the stats show 95% of traders fail. that means most posts about trading are going to be wrong.

 

[SpanishMainCapital]

the stats show 95% of traders fail. that means most posts about trading are going to be wrong.

Here is another stat, Put selling is the most lucrative option trading strategy there is :
Also for every 95 people 5 are profiting per your stat , how many of those 95 are trading straight stocks and not options , or dont understand how to calculate probability , or understand delta or theta?
That number will fall once you include them.

Finally even Buffet does this on 10-15 year horizons, so if its good for Mr Buffet it's good for me.

Source

 

[tradelosses]

How far in the money is the 'ITM' put? and how long the duration? I read that selling monthly and weekly ATM puts gives good results. I have seen much less literature on ITM puts though.

 

[tradelosses]

I don't know why you insist on calling them a scam. It was stated before in your post about this before that they simply gave access to the market. Your new broker " with better fills" is just selling your order flow to a 3rd party.

You send order, your broker sends it to their buddies, they get first dibs on it, their required to provide a price improvement if they want the order or they would be jumping the order book queue which isn't allowed. If they don't want to improve the order, it gets sent to the exchanges.

You could expect, that if you would send a limit with the same price as your price improvement you received, someone or the same 3rd party would pick the order up on the exchanges.

Theirs nothing scam about TOS sending your order to market as you asked. Your new broker " with better fills" order flow partners are not required to deal with every broker. They don't have to deal with TOS or any other broker if they don't want to. Their going to probably kick back your new broker some cash for your order and now your happy and their happy.

The scam is that your probably not getting the best deal from the market ( if you used a limit order) and your broker isn't sharing as much of the kickback with you as possible. Their buddies give you a few cent improvement and give your broker a few cents, when they could give you all of it if they wanted.

TD ameritrade is a joke...read here https://www.reddit.com/r/options/comments/50ouq4/td_ameritradetos_gives_bad_fills_and_profits_from/

many people report that TD Ameritrade readily executes fat finger trades.

highest commission and worst fills. Many people report this. not just me.

They never fill below the limit price on option trades and made $400 million in 2013 and 400 million in 2014 from payment order flow operations.

 

[SpanishMainCapital]

TD ameritrade is a joke...read here https://www.reddit.com/r/options/comments/50ouq4/td_ameritradetos_gives_bad_fills_and_profits_from/

many people report that TD Ameritrade readily executes fat finger trades.

highest commission and worst fills. Many people report this. not just me.

I pay 50c a contract and closing under 5c is free. I rarely trade stocks, sometimes covered calls which is 7.5$. This is somewhat on par with IB but the tools on TOS are terrific.
I typically use Persons Pivot Study to check the arrows before final execution , has worked almost every single time.

On TOS I first set the position to Analyse then move to Trade at mid and execute, never had a problem, almost always based on liquidity it executes at mid anyways YMMV.

 

[NPTrader]

I've traded options IB, e-trade, and TOS with TDA in 7 figure accounts for 5 years now. There was a period of time where I was co-trading TOS & IB at the same time to see which provider gave better fills. Got the same fill price on both vendors no matter how I structured the trade.

For the same volume, I pay about 50% less in commissions with TOS, and I don't have any auto-liquidation concerns with TOS. So I am very happy.

 

[ironchef]

Here is another stat, Put selling is the most lucrative option trading strategy there is :
Also for every 95 people 5 are profiting per your stat , how many of those 95 are trading straight stocks and not options , or dont understand how to calculate probability , or understand delta or theta?
That number will fall once you include them.

Finally even Buffet does this on 10-15 year horizons, so if its good for Mr Buffet it's good for me.

View attachment 166537

Source

According to your source then, everyone made money, whether you went long or short, calls or puts if you had a 10 year or even better 20 year horizons?

How do you explain the "zero sum" hypothesis of trading: Namely if the buyer of an option makes money, the seller must lose the same amount?

 

[SpanishMainCapital]

According to your source then, everyone made money, whether you went long or short, calls or puts if you had a 10 year or even better 20 year horizons?

How do you explain the "zero sum" hypothesis of trading: Namely if the buyer of an option makes money, the seller must lose the same amount?

I dont know why, but I can wager a guess.

All these puts are probably bought by institutions as part of their protective puts outlay. They probably allayed that cost by selling calls.

Buffet sold 5 B $ of puts in 2006 , they are now expiring, who do you think bought them? Institutions.

 

[ironchef]

I dont know why, but I can wager a guess.

All these puts are probably bought by institutions as part of their protective puts outlay. They probably allayed that cost by selling calls.

Buffet sold 5 B $ of puts in 2006 , they are now expiring, who do you think bought them? Institutions.

So Buffett made money selling puts when they expire worthless. The buyers of his puts lose all their money so how can they be equally profitable buying puts?