Since i don't do indexes and you don't do stocks, and since you won't participate in my $25,000 bull put credit spread hypothetical request,.... I guess we have nothing left to discuss. Good luck with your..... "adjustments".
Atticus I posted the web site to show that OTM options can be done successfully. Teddie knight has DOCUNMENTED her option trades with a return of 12%to 40% for the last 3 or 4 years. BUT She sells nothing. There are bothersome banners there that have increased with her success but she SELLS NOTHING. Either you did not browse the site for any length of time to see this or your challenged in reading My lenght of time trading has never been a serious endever for me just a challenge. I earned a great living designing and building selling custom homes in N.J,PA,and Calf I only just started hustling web sites CHEERS john
Interesting response.... I did participate, but can only participate with what I do and know... otherwise it is purely hypothetical... if it is purely hypothetical, why do you not play it out show us what your point is. I guess we can just move on....
Putmaster,I disagree with much of what you believe to be true. In the sense of pure RISK,a put spread is LESS risky than a naked put.There should be no argument there. You introduce selling put spreads(plural) to bring in the same amount of money as a naked put,yet you do it with no regard to delta,gamma,skew etc.. Your main point is leverage is evil,and you are correct there in the case of put spreads,AND for naked puts. If you are going to compare a put spread with a naked put,at least start with delta neutral positions and talk about risk from there.Equal premium makes no sense unless you desire to go the way of the dinosaur. On a side note,Atticus summed it up very well regarding ATM(or slightly ITM).IMHO,selling the OTM is fools gold,and the fearful traders ticket.If you are going to take risk,get paid to do so and sell ATM or higher.You never know,you may actually be right in your market/stock call and should be paid for it.
most long term net short premium traders are spread traders... if we are going to start throwing out generalities.. and yes they do blow up.. just like over leveraged naked put traders... cash secured put seller/buy writers are low return less risk traders.. sure its a way to get more for your money if your trying to hedge a little bit instead of just exposing yourself completely by buying outright underlyings.. i don't think this is a apple to oranges comparison.. but i do think alot of times putty man hammers away at the risks of leveraging up on selling naked puts or as well through spreads to get higher returns.... and just as i tell people that ask me if they have a drinking problem that obviously do and don't get it... "just keep drinking and you'll find out" hahaha the bottom line with the buy/writer is you better realize that your totally exposed to market crashes.. and they can take 10 to 20 years to make up from... and if you don't think you are the fool .. you probably are.
I've given a dozen examples of what I am refering to over the past 20 pages. In fact, I've given so many example, half the readers are complaining that I'm giving too many example. If you either didn't read them or don't understand my message, there is little point in my sharing yet another example. Hence the reason I asked you to come up with a hypothetical stock(s) spread for us to discuss, assuming a hypothetical $25,000 to invest on it or them. I really don't know why you are resisting the request, as it can't take you more than 10 seconds to think of a stock. Any stock or stocks.