Market Owl went short Tuesday. So far so good.
My long exposure is minimal, meaning, I need a sell off!
My long exposure is minimal, meaning, I need a sell off!
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When is this Bull gonna end?
- Thread starter noob_trad3r
- Start date
Quote from NoDoji:
The optimal profit is to realize the full premium collected at or near expiration, and the further price stays from the strike price the better. The last thing you want if you're short puts is a correction, unless you're short because you actually want to own a stock at a discount.
I agree with you. That's options 101. Something's amiss here
Quote from noob_trad3r:
I am getting tired of this bull. I have short puts expiring soon and it would be nice if the correction comes.
Anyone have an idea when we will start seeing another correction? Do you think mid october?
I think you need a mentor real bad and no I'm not trying to be funny.. To be a successful trader or investor you must accept and adapt the current situation.. If you make a bad trade so what.. Move on.. If it's a bull market then buy pull backs.. What made you go short anyway?
Quote from NoDoji:
The optimal profit is to realize the full premium collected at or near expiration, and the further price stays from the strike price the better. The last thing you want if you're short puts is a correction, unless you're short because you actually want to own a stock at a discount.
Nope. If your short put expires too far OTM on expiration you collected your premium and you can write another put at the same strike price for the next month or so and collect another premium
You do not want a short put position to close out too far from your strike price OTM because then you either have to move up a strike price or so to collect a similar premium, or sell the same strike and collect less premium.
You are better off long the underlying if it is gonna make a big run up. With a short put position you limit your profits, so you want the equity position not to move too far OTM.
A short put position means you are slightly to moderately bullish on the underlying. If it runs up way too far then your opinion was incorrect and you limited potential profits.
Short options position work best when the underlying does not deviate too much from your expected outcome. ie: bullish but not TOO bullish.
Quote from KINGOFSHORTS:
Short options position work best when the underlying does not deviate too much from your expected outcome. ie: bullish but not TOO bullish.
Sort puts work best when they expire worthless. You cannot sit there and say it is not working because the underlying ran too far up and you are missing out on upside profits. As soon as you sell the put you accept the parameters of limited reward. Whatever the market does, as long as you don't lose money is out of your hands. Your quote implies a lack of understanding of options when you say the optimal is for the market to be right at the short strike at expiration. If you do not understand the risk/reward characteristics of a short put, then it should never be sold to begin with.
IMO the bull ended as banks sold to return TARP funds.Quote from noob_trad3r:
I am getting tired of this bull. I have short puts expiring soon and it would be nice if the correction comes.
Anyone have an idea when we will start seeing another correction? Do you think mid october?
Maybe the worst it's behind us naked and with an erect penis?Quote from wiesman02:
I think the worst is behind us.
Just waiting to catch you off guard?
Quote from Mike Okistini:
Sort puts work best when they expire worthless. You cannot sit there and say it is not working because the underlying ran too far up and you are missing out on upside profits. As soon as you sell the put you accept the parameters of limited reward. Whatever the market does, as long as you don't lose money is out of your hands. Your quote implies a lack of understanding of options when you say the optimal is for the market to be right at the short strike at expiration. If you do not understand the risk/reward characteristics of a short put, then it should never be sold to begin with.
IF it is close to the short strike it means your opinion was pretty accurate regarding expectations.
How is it not optimal if when you sell a short position it expires a few cents OTM and you collected your premium with the underlying not too far from the initial strike price. and now you have the opportunity to write the next contract at the same strike price or near it allowing the collection of the maximum extrinsic premium via selling another ATM or near the money put.
IF you sell an ATM or slightly OTM put it would indicate you are not the most bullish on that underlying and have a more neutral outlook, otherwise you would be writing an ITM put instead.