Although the advice may sound harsh maae10 no one here is intentionally trying to be. I'll bet dollars to donuts (if I win, I get the donuts) for each piece of advice you've received here, the poster had to learn that lesson by having their ass handed to them in the marketplace (more than once), so they've learned what to do and what not to do the hard way. Now, myself, I don't even trade options, I trade e-minis, but I'll tell you this much, if I don't understand something about what I'm doing, then I stop and figure it out before I move forward. *** If a strategy you want to implement is so complex that you do not have an exact understanding of all of the risk:reward parameters, and what can happen in best/worst case scenarios, don't implement the trade until you do. You should know this stuff like the back of your hand before you put your dollars down on the table. This should be second nature to your trading, this should be at a subconscious level. Good trading, Jimmy Jam
I started off the very first post by saying "I'm a little new to the game" I later clarified that I have been buying options for several years but I'm completely new to selling them. I was just surprised that people would be so quick to doubt my experience in buying options.
Much of the advice I got was "stop trading" "You don't know anything" That doesn't help me, one poster took the time to explain things to me and for that I'm very grateful, everybody else just said I'm clueless.
The doubt comes from the fact that you cannot trade options without a basic understanding of them. Whether you're buying or selling them is irrelevant to that knowledge! So, given that you don't have a basic understanding of options, we have naturally expressed some doubt in your experience. You've proven my point yourself by not being able to calculate your P/L from selling 115 put @ 25, getting assigned and then selling the stock at 91.
The only reason I wanted confirmation for my calculation is because It was the first time I got "assigned" which is exclusive to the selling side of the option business. In addition to that some of the earlier posts in the thread indicated I was up the creek so I got nervous.
I think people got confused your experience with your knowledge, which are not the same thing. The advice they gave are out of goodwill; option is a highly technical instrument, you are at a disadvantage if you do not know your basics down cold. (esp regarding to volatility and option pricing.)
I'm surprised no one has pointed out yet that a naked (or cash-covered) short put and a covered call are equivalent positions. You should be familiar with the P/L graph of your trades before you execute them.