I didn't say that I use this strategy either; just that it's a good strategy for people who buy stocks to add to whatever other strategy that they...
I have a question: is is better to buy underpriced otm calls or sell overpriced otm puts? On the one hand, I expect that the effect of put-call...
Why do you say you that look at it differently?...aren't you saying essentially the same thing?
You want the stock to gap down after you write the put as it's your intention to buy the stock on a dip. Some gaps wont bring the price all the...
I don't think that the B-S model is predicting anything - it's simply calculating the the volatility that's implied by the market price of an...
You're misrepresenting the idea behind this strategy: it's not "Selling a put because you "wouldn't mind" owning the stock" - it's "Selling a put...
Are you saying that the price of otm options is implying more than just the underlying security's expected volatility, but the B-S model is based...
That's not the problem of this strategy for buying the stocks you want to own at a discount; in fact this strategy helps to mitigate the loss you...
Yes, it's the market that determines iv; but which iv is it that turns out to be the better prediction: the otm iv's, or the atm iv's?... there is...
It's the stocks that you don't think will go up that much that are precisely the ones you wouldn't want to risk having put to you. The strategy...
I've noticed that put-call parity can be violated, but only on a fleeting basis during a sudden move - the parity always comes back. During an...
Selling puts on stocks you'd like to own is a good strategy, but only if you're good at picking those stocks in the first place; In other words,...
So, essentially then, the models are right and the market is persistently wrong; amazing - I never thought it could be that easy to profit with...
I wouldn't be able to judge the analysis in these books; are they saying that the model is correct?... and, if so, are they explaining the skew as...
Is the risk really higher?...there are two kinds of risk in selling an option: 1 - frequency of it going into the money and 2 - the extent it goes...
I believe that GLD; TLT; and VXX are examples of fear driven securities; they tend to crash upwards, so naturally, if the skew is an emotion based...
I'm familiar with the explanations as to why the iv skew exists, but I'm also skeptical that they're true, though hopeful that they are. I've...
Assuming Black-Scholes is correct, then there is only one reason one wouldn't be wise to sell as much as someone wanted of overpriced puts: money...
or is it the result of the under/overpricing of otm options by market forces?...logic would seem to dictate that it must be one or the other;(I...
I understand that dividends and borrow costs can affect put-call parity. My issue, though, is about why put-call parity is said only to apply to...
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