Writing options for a living

[JSOP]

Can this be done? Has anyone tried it? Any comments?

https://www.bloomberg.com/news/arti...-hedge-fund-promoted-selling-of-naked-options

 

[Sweet Bobby]

Has anyone read James Cordier's book on writing naked options. He is advocating writing options 3 to 5 months away. Although boring, he claims that this is a money-maker. For example, the February 90.00 crude oil call, which expires in January, is trading at about $600. So write this option NOW, and keep going every month after. You could write at strike prices ridiculously high because it's so far. So, you keep dong this every month. Come January, income starts coming in.

What do you think? and Secondly has anyone read it?

How did that book turn out for him?

 

[ironchef]

How did that book turn out for him?

He made $$ selling that book. He also made lots of $$$ running optionseller.com?

 

[The Rookie]

Please explain the difference between selling a naked put and cash secured put. Is the risk lower with cash secured since no margin is involved?

 

[.sigma]

He made $$ selling that book. He also made lots of $$$ running optionseller.com?

I bought this book years ago. Its mostly about selling DOTM in commodity futures options.

Very vague and lots of misinformation regarding optionality. Overall a weak book about options.

 

[gkishot]

Please explain the difference between selling a naked put and cash secured put. Is the risk lower with cash secured since no margin is involved?

There is no difference. The trader decides how much cash he wants to put aside for option position between the required minimum and necessary maximum ( which is a maximum loss as in cash secured put ).

 

[BMK]

Please explain the difference between selling a naked put and cash secured put. Is the risk lower with cash secured since no margin is involved?

With a cash secured put, the risk is lower for the broker. "Cash secured" means that the account has enough cash to buy the stock if the put is assigned, without using margin, and without having to liquidate other positions that might not provide enough cash if they suddenly drop in value. Some brokers allow selling cash secured puts in a cash account.

A truly naked put implies that you don't have enough cash to buy the stock if the put is exercised. That means that the broker has to evaluate the risk, and determine whether your account has enough equity to support the position. Brokers view a naked put as very similar to a naked call or short stock. The risk is not unlimited, because the stock cannot go below zero. But if the broker doesn't keep an eye on it, it is possible that you could lose more than the total equity in your account, and the broker would have to eat the excess loss. With a cash-secured put, that can't happen.

BMK

 

[systematictrader]

Sure it can be done. Anything is possible.

I know a guy who's been writing options for a decade and never had a losing year.

However, it is not as simple as it may look, as all other trading strategies it requires great discipline and planning, no exceptions.

By the way, if you don't have the guts to write naked options you can always sell verticals. Less profit potential, but the risk is much smaller.

love it

 

[cortney302]

Yes, you can surely do that. Trying new things can be challenging and all you need to have is the right mindset for it.

 

[misterkel]

3/Stops in place (works only in liquid market)

No f'ing way am I putting stops on options. Talk about bad fills. You've gotta be nuts to use stops on options.