Leveraged PutWrite

Discussion in 'Options' started by qlai, Oct 18, 2020.

  1. newwurldmn

    newwurldmn

    Thanks for posting the report.

    firstly, do the analysis for the subsequent 7 years. I do not believe put writing outperformed. I can check tomorrow.

    secondly they are trying to sell options so they will argue for you to trade more options. If you listened to them then in 2020 you would be down like 60percent when the market was down 30.

    when selling options, the risk reward looks great until it doesnt. The asymmetric nature of payouts means You should look at risk from a permanent impairment of capital. The conclusion should be a limited amount of risk.
     
    #11     Oct 20, 2020
  2. newwurldmn

    newwurldmn

    upload_2020-10-20_19-8-5.png
     
    #12     Oct 20, 2020
  3. xandman

    xandman

    #13     Oct 20, 2020
  4. newwurldmn

    newwurldmn

    And don't forget tax implications of PUT Writing. Reduce your returns by 40%/year where as a long only you will only pay 25% at the end.
     
    #14     Oct 20, 2020
    qlai likes this.