Perhaps a more pertinent question would be "is the skew justified ?" In other words do stock index distributions exhibit a kurtosis that the...
I think it's a question of leverage. By definition covered calls can't be levered, whereas short Puts can be, often with spectacular consequences.
Absolutely not. I had thought that this was precisely what dmo meant, a free lunch if you like, but alas that's wasn't what he meant. Sure a...
Thanks for taking the time dmo. Yes, you would indeed be Delta & Gamma neutral with the futures at 104-16/32. But as the futures moved away from...
Given that all options have Gamma and all options have Delta, I cannot see for the life of me how you can achieve Delta AND Gamma neutral AND make...
Fascinating. Sounds like a licence to print money. How on earth do you stay delta AND gamma neutral ???
Nothing wrong with selling naked Puts, it's the abuse of leverage that kills, not the strategy. The amateurs here think "how much can I make...
Hi Mark. First of all my post was in response to your original Q below:- The words that caught my attention here were profitable / consistent /...
If you are selling Puts your monthly P/L maybe something like this +$ 5k +$5k +$ 5k +$5k +$ 5k +$5k +$ 5k +$5k +$ 5k +$5k +$ 5k -$55k. If you...
Don't mean to sound facetious but.....it depends which way the underlying goes :)
iloveoptions Thanks for your detailed reply. I had assumed that you "mechanically" scalped whenever a pre-determined delta was reached, and...
Probably not a good example in terms of detail, and obviously vol skew would feature in deciding which strikes use. But the example holds good in...
iloveoptions At what Delta limit do you adjust ? Any why that Delta limit ? Andy You could adjust any spread to delta neutral, but in...
None. There is no fundamental difference between trading index rather than stock options. Providing all of the stocks in a particular index...
Even assuming that your stop is executed satisfactorily, neither trade has any advantage over the other, although they are very different. In the...
Selling naked Puts in and of itself carries no more downside risk than owning the same quantity of stock outright. It is the abuse of leverage...
OTM, near month. Welcome !
European style equity calls can trade below intrinsic where a dividend is due prior to expiry. For example, Spot 500 Dividend due 25...
Gamma is the opposite side of the coin to Theta. If you are long Gamma you must be short Theta, and vice-versa. This is very basic stuff, and I...
a529612 The rationale is that the delta is a measure of risk, whereas the value of an option is not. If the risk is low (Delta <0.30) I'd...
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