If you don't mind me saying this: With your chart, you just argued that net long call options during this period is better than spreads?
Personally I don't believe that it is wise to base your whole options portfolio on selling premium. In order to get decent returns in selling premium, you need to use leverage which means taking excessive risks. This usually doesn't end well - look at the The Spectacular Fall Of LJM Preservation And Growth I believe that it is critical to implement mix of strategies, including selling premium, buying premium, volatility based strategies etc. Of course gurus like Tom Sosnoff will tell you that selling premium is the only way to make money with options. Don't believe them. We have dozens of members who started exclusively with selling premium, but found out very quickly that you need to add other strategies to the mix. Here are testimonials from some of our members:
Sosnoff comes from the old generation of (pit) traders...who were just simply scalping, or arbing, their client orders. I'm willing to bet he can't actually trade his own personal account for jack from his own computer at home, , There are varying degrees of the word 'trader' -- but very few...are the true, rare traders....traders who can exponentially grow their own personal account into a small fortune.
i agree. since 2009 the best strategy has been to go all in long. there have been some small hiccups during that time, but it seems like normal service has always been resumed. as for whether net long call or long spreads are better at the present time, i don't know, i'm still just learning about trading options and in my case i need to start trading with the strictest discipline and cutting losses in time. also, the very recent flash crash - correction of january - february 2018 showed that at some point the exponential inflation in asset prices has to stop and will likely reverse violently, so having a plan that would withstand gigantic movements down in prices was always vital but at this time it is even more than ever.
Yes. And I agree that what goes up must come down, so you may be late to the party. I am just lucky I started early, back in 2013. Good luck.
Wow so many contracts for a potential profit of 392 dollars. But your potential loss is 8,000 dollars if the trade goes against you. Definitely not the types of trade I would enter. I have entered trades where my max loss is 90 dollars, potential profits unlimited. Realised profits 320 dollars. You should study more and look at other methods. Too much risk for not great profits. So far the wins have been greater than the losses. Wins between Feb 12 to 22. 2,119.75 YTD Adj gain ($) 18,183.01
well, mr. prc117f, that's very interesting. if you don't mind the question, ¿if are not trading short put spreads what strategies is it that you are trading then?
How did you come up with a max profit of $392? Based on the price of Amazon stock today if I sold a bull put spread at 1250/1245 strikes I would get a max profit of $80 and max loss of $9,920. At any rate this is way too much risk for such a tiny profit.