Can this be done? Has anyone tried it? Any comments?
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Writing options for a living
- Thread starter torontoman
- Start date
Quote from torontoman:
Can this be done? Has anyone tried it? Any comments?
Writing naked options can seem very rewarding until the day that shit happens. And it will. Then you'll regret the day you ever started, and wonder what happened to all your profits on those little premiums you've been collecting, that have just vanished as one of your underlying stocks crashes through the floor and leaves you looking at a huge loss.
If you are successful in trading the underlying...and you'd better be to even think about writing options...then just stick with trading the underlying. No need to take on a high risk/low reward strategy that can really hurt you if you're in the wrong place at the wrong time.
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.
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.
Max Ansbacher has been doing this for almost 30 years.Quote from torontoman:
Can this be done? Has anyone tried it? Any comments?
http://www.ansbacherusa.com/about_us.htm
Yes, Ansbacher does it. His return is between 19-25%. In order to make a decent living, you have to have about 300k-400K to live on this return.
Does anyone think it is possible to make more than 20%? writing naked options?
Does anyone think it is possible to make more than 20%? writing naked options?
Quote from torontoman:
Yes, Ansbacher does it. His return is between 19-25%. In order to make a decent living, you have to have about 300k-400K to live on this return.
Does anyone think it is possible to make more than 20%? writing naked options?
One can make about 40% on average per year. You need
1/ Liquid market
2/ Premium worth of the risk
3/Stops in place (works only in liquid market)
4/Must know a decent reversal timing method.
Good luck
Trade markets that have SPAN margin instead of reg T. Don't use all your margin so that you can turn naked position into covered call/put if strike is hit. Sell options two standard deviations of the historic volatility away to give yourself odds of 19/20 of not being exercised. Write to IB and tell them to get on with testing IPE options.