collecting premium / cashing out

Yeh, that's part of the risk of selling naked puts.

 

I tell the brokers that I meant to buy instead of sell. They generally agree with me and change the trades.

 

Is the broker MF Global mabye?

 

Ha. It's true. I sold them 44 billion dollars worth of puts that I myself had intended to sell.

 

That's a good explanation of selling naked puts - applicable for the "investor" type who seeks to acquire equity at lower prices while generating current income. Good job.

You did mention avoiding over leverage. It should be emphasized heavily because many noobs interpret premium credit as free money. It should also be emphasized that it's a lousy strategy in a bear market.

 

I realize that it's hyperbole but in order to amass anything significant via selling naked puts (billions), you're going to have to sell strikes a lot closer to the money, do size (over leverage?), and have some degree of success in your timing and selection. Because of the proximity of strike to UL price as well as size, you're more prone to blowing up, especially since you're not starting with millions. And yes, insurance companies do go bankrupt.

 

.... looks like those naked puts should perform well in your paper trading acct. today... ! can't believe we had this discussion over a demo account.

LOL

 

Wow, that's a game-changer!

 

Why make life so complicated? Just get a #2 Madoff pencil and change the - to a + on the monthly statement.

 

Yeah. Of course. For the Other People's money accounts.

But for my own accounts...