Writing Covered Puts

[MajorUrsa]

Quote from exQQQQseme:

Ursa, what do you mean by trolling? Trolling for what? Or is that something technical that I have yet to learn?

Look it up.

I just don't believe you are so uneducated. Why didn't you read the books? You are now having us repeat all the basic stuff that any apprentice option trader learns in his first year. When I started I couldn't wait to get my hands on these books, instead of re-inventing the wheel.

Ursa..

 

[MTE]

Quote from exQQQQseme:

Nikko, you said, "Conversions and reversals have no potential to make money based on changing extrinsic values."

I must be doing something wrong because I am making money doing this. Perhaps when I learn what I am doing wrong I can stop making money.

Bob

Bob,

This is B.S. (pardon my french)! A conversion/reversal is based on the put-call parity, the most basic of option pricing relationships, and is an arb trade when the put-call parity is out of whack, but you can imagine how often that happens in today's options markets...

Give us an example of what you're doing!

 

[nikko309]

"You need a spreadsheet to calculate that? That is by far the simplest arithmetic of all option trading. You should be able t do these in your sleep."

LOL. I was thinking the same thing!

BTW, how does one cut and paste the original comment to get it to bracket off in the reply as:

Quote by "so and so"
...followed by the text

Thx

 

[nikko309]

Nikko, you said, "Conversions and reversals have no potential to make money based on changing extrinsic values."

I must be doing something wrong because I am making money doing this. Perhaps when I learn what I am doing wrong I can stop making money.
---------------------------

LOLOL. Why do I feel like I'm in the honors class with a pedantic substitute teacher, who when corrected by students, gives a lecture on how to present criticism properly?

It would behoove you to learn about synthetics so that you don't have to defend mis-statements. Or better yet, don't defend them. Just learn.

OK, I'll sit pretty and listen now

 

[RichardRimes]

Quote from nikko309:

"You need a spreadsheet to calculate that? That is by far the simplest arithmetic of all option trading. You should be able t do these in your sleep."

LOL. I was thinking the same thing!

BTW, how does one cut and paste the original comment to get it to bracket off in the reply as:

Quote by "so and so"
...followed by the text

Thx

Nikko309 when replying directly to a post hit the "quote" button on the bottom right of the page... also don't most platforms already have intrinsic/extrinsic values on them...tos does so I don't even have to do the math in my head

 

[RichardRimes]

bottom right where your choices are edit/delete (your own posts), quote, and complain (if you want to complain to the mods about a post)

 

[exQQQQseme]

I have no idea what a conversion/reversal is, nor do I feel I have any need to know.

Neither I nor Ursa knows what trolling is so he has asked me to look it up.

I agree with Ursa that I am uneducated, particularly if uneducated means not having read the books that he is endorsing as the only worthwhile books on the subject.

MTE, you have asked for an explanation of what I am doing. I have done so often in this thread, but what the hell, here goes one more time.

1. I have always been big on shorting stocks. So I look for stocks with the following criteria:

a. non dividend paying
b. large cap
c. optionable
d. high volume both stocks and options
e. I look for stocks which have been on an incline for several months, but unlike a,b,c, and d, this is not imperative.

Let's say I short 500 shares. At this point I am negative 500 deltas. For every dollar the stock goes down, I make $500. For every dollar the stock goes up I loose $500.

2. Then I look at the stock chart. I try to decide which direction the stock is likely go ove the next few weeks: up, down, or sideways.

3. Based on my conviction in #2, I look for positive deltas to reduce the negative 500 deltas, or if I am slightly bullish, which is seldom the situation, I might even find more than 500 deltas.

Using options, there are only two ways to get positive deltas:

a. buy calls
b. sell puts

I make my decision, place my order, and hope to fill.

4. I adjust my deltas from time to time with various quantities. It is an ongoing thing. Seldom, do I buy back my short shares. I adjust only the options.

A lot of nice well intentioned people here tell me I am making a mistake because I could accomplish the same thing with synthetic equivalencies. To me, same means same. So if it's the same for the goose, it's the same for the gander. So what is all the ranting and raving about?

Some have tried to answer this by telling me that my way results in greater transactional costs. My response simply is that I have been trading stocks and options for many years and I fully understand how to account for such charges. Thus far it has not affected me adversely, so I see no reason to change.

Ursa, you are not aware of my educational credits or any of the books I have read. Likewise, I am not aware of your background or readings. Therefore since neither of is informed on the subject as far as the other is concerned, there is no need for further reference to where the other person is coming from. Stick to the subject matter.

 

[rallymode]

Intrinsic and time value of an option? I have not heard these used in years. This has optionetics written all over it.

 

[exQQQQseme]

Rallymode, yes, it is possible that Optionetics is the first place I have heard those terms. However, I've been to a lot of broker sponsored educational seminars where the terms are commonly used. Not really sure where I first heard the terms though.

Bob

 

[MajorUrsa]

Quote from exQQQQseme:

I have no idea what a conversion/reversal is, nor do I feel I have any need to know.

Neither I nor Ursa knows what trolling is so he has asked me to look it up.

I agree with Ursa that I am uneducated, particularly if uneducated means not having read the books that he is endorsing as the only worthwhile books on the subject.

Trolling is an everyday term used on the internet. Also it is usual on that same internet, when someone uses a term u dont know yet, to look it up and then respond accordingly. But, as with options, you think you don't need to do that and you already know everything that is important.

Look, I don't know why you came here. If it is to show us how good you are then stop it; that doesn't work here, many have tried before.
If you come here to ask questions and maybe exchange ideas, then at least learn the language in which the answers are given. If this subject is so imprortant to you than learn the theory and respect those who did before you. In the time you spent here blabbering your useless nonsense you could have read at least 2 important books. Time well spent. Start taking your hobby/profession seriously, because we do. Even those who say all that theory has not much practical value, they too have learned their lessons and admit they were important.

This group here encompasses many diferent levels of expertise (I consider myself mediocre) but it is pleasant and to the point. I learned a lot, by listening, reading and thinking. If someone who runs 6-figure trades a few times a day is willing to take the time to give me a little advise to read such-n-so book, I sit still and listen. That's what forums are for, aren't they.

If you don't think you need all of that, then we're finished talking. I'm starting to regard your ignorance and your lack of wilingness to study as insulting to me and most of the people here.
Please drop the attitude, it won't get you very far, not here nor in your trading.

Ursa..