I'm curious how long you've been writing options. Were you in the market during this year's mini-correction in Feb? Sept 11?
Do you guys know what you are talking about at all! Posting hypothetical results, are, to say the least, not only wasting your own time, but other people's time as well. If you are going to post details about trading Options, then please be courteous enough to say up front that your knowledge is limited. This way the newbies will not have to second guess and waste more of their time reading rubbish. I am amazed to see how so many so called Professional Traders are nothing but web posters passing their time. Professional Trading is exactly what it says, and if you do not know the meaning of Professional, then please take the time to find out. RPT
A straight question deserves a straight answer. 49.09% return on Capital Invested in 3 months. Annualised = 196.36% Once you know what to do, and how to do it correctly, it becomes a numbers game, so your return will be in direct proportion to the amount of Capital you put at risk. Plug in any amount over $100K and you should see consistent % returns as noted above. Cut that amount in half, and you must cut your projected returns. Now, here is another question for my fellow Professional Traders. Why are your returns automatically reduced when you reduce your amount of Capital At Risk ? RPT
Here's a good one. I sell a few OTM Bear Calls to balance mostly long trades. I hardly ever sell the other side. Learned that lesson 9/01. Anyways, just did a few on TLAB last week. They were pretty far OTM, but not 20% OTM! Was it a dumb trade? Sure. Will I lose 8 - 10X the credit? Yup. Were there warning signs and buyout rumors? Probably, but there always are. It will be a small loss on the portfolio and will easily be made up, but certainly could be a lesson from the shit happens book. Good trading to all!
Just got out of the above trade at not too bad of a hit. Hell, maybe I should have waited? TSCM is FOS sometimes. Oh well, on to the next trade.
A good example. The concept of selling premium is very seductive. And in the bull market we've enjoyed the past couple years, it has been even more so. But many, many option sellers were wiped out when the last bull market corrected, and it will happen again. I can clearly recall all the threads on the old Silicon Investor site touting the months of regular income from collecting premies in 98-00. I even profited in 10% market declines. We were all just raking it in. Masters of the universe. Starting to hear the same crap again. But alas...eventually a couple stocks gap hard against you, or the market makes a sudden jolt...and all those months of hard work go up in flames in 48 hours and you're trading account is filled with a bunch of stock that you never really wanted and you're peeing in your pants and you have a giant knot in your stomach and you sure as hell wish you'd never even opened up McMillan that day at Borders when you were bored because you'd already read ActiveTrader and Stocks & Commodities and you figured there must be an easy way to make regular income and you were proud to tell your wife you were going to pay the mortgage every month with your premies but now you are just a piece of crap and you maybe have to even consider (God forbid!) looking for your resume. If you can trade the underlying, just trade the damn underlying. If you can't do that successfully, then nobody has any right trading options and they'll just get their ass handed to them when they least expect it. A crappy way to make a living.
Options < 70~ delta are volatility assets. The largest traders by volume are trading a distribution or vol forecast over direction. Selling vol need not be a > 1 risk-reward.
Your returns are deemed hypothetical until you post your audit. You should practice what you preach. You're making friends quickly... please enlighten us with your vast knowledge on the subject.
This should be fun. RPT, you might want to check out atticus' ROI and bench press numbers before you mouth off.