<<< You say bouncing from trade to trade. I am thinking this means closing out a position and opening new position within same strategy to extend the "life" of your trade, to let the market go your way. Could you please expand on what you mean by bouncing from "trade to trade"? >>> No, I am not refering to closing out a position. Sounds like you are perhaps refering to "rolling" a position. I am refering to the ability to trade weeklies in a somewhat predictable and consistent manner. That being,... if you are simply doing an occasional weekly here and another one there, that is one thing. But if you are doing them as an overall strategy, with the hope and intention of earning a somewhat decent and predictable annual % return on your accounts cash at year end,.... then you have to be able to initiate a new trade reasonably soon, after an expiring one has ended. For example, suppose you did 26 successful weekly trades through the year, with each one earning 20% annualized. As the year progressed, you might assume, you were going to earn 20% at year end. In reality, you will only earn 10%.... minus commissions. In order to earn that 20% at year end, you would need to have your cash invested all 52 weeks of the year, earning 20% per trade. Not just 26. And of course it also assumes no losses in my example. That is what I mean by bouncing from trade to trade. That being, one weekly trade ends, and the account cash is quickly reinvested in another trade. If you only do weeklies every other week, you should anticipate your year end % return on your account cash, to be 50% of what your average weekly trades earn. You really can not spend too much time sitting in cash between those weekly trades, or your anticipated year end % returns are going to suffer. You need to bounce somewhat quickly from trade to trade. If you are going to be a weekly trader, as a prefered strategy, you really can NOT assume your year end % return will mimic the average of your weekly trades.... unless you actually do your trades weekly. Hence the reason i say I like the "theory" of doing weeklies. But not the reality. In reality, there will be many trading pauses along the way, and the pauses will vary in length from trade to trade, and the pauses will occur for many different reasons. You can attempt to compensate for the trading pauses, via the use of margin leverage. But that's another discussion for another day.
Re: Alternative strategy to selling naked? You could try semi-naked, maybe just wear boxer shorts and socks. I prefer a t-shirt instead of being totally naked.
Imagine a post where diaoption doesn't say something ridiculous. Imagine a post where diaoption actually shares something useful. Imagine a post where diaoption says something thought provoking. Imagine a post where we aren't asked to visualize diaoption semi naked. http://www.youtube.com/watch?v=Rxoki3fl98s
I notice many people on this board do credit spreads on options. Whats your take on this strategy, ?? Can it be done in a consistent manner in the weeklies. ? What i am looking for in the weeklies is possibly another income stream using options now that weeklies volume is getting greater. I know nothing is failure proof obviously, but just looking for an addition to my swing futs trading. Your thoughts on credit spreads? EF
<<< I notice many people on this board do credit spreads on options. Whats your take on this strategy, ?? Can it be done in a consistent manner in the weeklies. ? >>> Don't even get me started on what I think of credit spreads as an overall strategy. I've shared my opinion of credit spreads many times on ET. I am biased against them, so i suggest you ask others who use them. Just keep in mind, if you are using credit spreads as an overall portfolio strategy, you will be using margin leverage of about 8 - 10 times your account value. If you have a $100,000 account and are using credit spreads as an overall strategy, you will probably be controlling close to a MILLION dollars of leverage. And it is that massive use of leverage that destroys many accounts. Many spread traders have no idea they are even using margin leverage with credit spreads. They think it's a straight cash transaction. It's not!
Put M, thinks Spread Traders do not understand their risk. He is correct on the amount of leverage, but the second leg of the Spread limits your risk. A Spread Trader should monitor their open trades closely. I do trade Spreads has a strategy.... Far OTM with defined triggers on getting out or making adjustments. I will admit I have closed or made adjustments to about 5% of my trades.... This method works very well for me. Put M.'s Put strategy works very well for him.