double the commissions and you still have to pick the direction anyway to win. why not just pick a direction to begin with unless your just hoping that the trade will wander your way, which is why people trade spreads. they have no clue what the market will do so it helps them stay in the game and lose more slowly while hoping for a miracle.
I understand what you are saying but disagree. Like I said, spreads are not for everyone. No one knows where the market will go on any given day or any relative short period and five or ten contracts on a credit put spread on the SPY, for example, is far less risky than selling the same number of naked puts on the SPY. It is not that I am just hoping the trade will go my way, it is that I am limiting my risk if it does not. Is that not the concept of good risk management? By the way, I do like selling puts but I usually trade fewer contracts than a spread. I like that you can roll them if the trade goes against you, which I don't believe you can do with spreads. I don't exclusively do one type of trade, believing it is good to have a lot of tools in your toolbox. Lately, I have been doing credit call spreads on the SPY, believing it is good for this market environment. What do you see as a good strategy right now?
i trade momentum on index futures about 5-15 minute trades. i specialize in just a handful of markets mostly index, debt instruments with very high liquidity. selling naked calls and puts is the indy car of trading so i am really way deep into that method though i don't do it right now.
Selling naked calls seems very risky but I like selling puts, just not in this market. I am curious about your strategy of selling naked calls. When have you done that? Also, do you ever buy options?
i have never bought an option in my life i was mentored by one of the largest option traders that you never buy options, never mention elliot wave, and never paper trade - we use real money so your ideas need to be good. selling front month calls slightly out of the money on vol spikes in huge amounts enough we were fined for exceeding limits in every optionable major index a few times. had deep pockets to meet any margin calls and rolled when we had to to next month. was in every major train wreck in the past 30 years and never lost a position. but like i have said many times you have to trade 100mm like it was 10mm because there will come a day when you have to have the capital in reserve to keep your positions from being automatically closed out. the saying is that you put up your house to gain a bicycle.
i love riding bicycles. if u lost your house you could ride your bike to a new job and get another house later. transportation is important..lol
Interesting. Definitely see how that can be a winner. Kind of a more sophisticated martingale. Except for table limits, Bill Gates would never lose at the casino. Way off topic, but how did that horse race system work out? Didn't you find some holes in paramutual betting odds? Think I remember you forming a syndicate to play it. Fascinating stuff. QUOTE="MarkBrown, post: 4776180, member: 8890"]i have never bought an option in my life i was mentored by one of the largest option traders that you never buy options, never mention elliot wave, and never paper trade - we use real money so your ideas need to be good. selling front month calls slightly out of the money on vol spikes in huge amounts enough we were fined for exceeding limits in every optionable major index a few times. had deep pockets to meet any margin calls and rolled when we had to to next month. was in every major train wreck in the past 30 years and never lost a position. but like i have said many times you have to trade 100mm like it was 10mm because there will come a day when you have to have the capital in reserve to keep your positions from being automatically closed out. the saying is that you put up your house to gain a bicycle.[/QUOTE]
true that if there were no house limits - so selling options your only house limit is the option-able index limits set in place by the exchange - but unlike the casino - you have other similar index options that you can sell as proxy to the the original position as well you could sell same options in a different account but when it's a fund not so easy. actually with a casino you can get your wife, cousin and his wife to all contribute with your scheme but i suggest that once you do win after 18 black spins in a row - you get the fck out of there and don't come back. thank you jack binion's. horse betting is a different and more interesting scheme - in simple terms you don't bet anything on the top picks and you split up betting on the remaining horses based on the odds. since the top picks seldom actually win the race you wind up financing the other bets off the higher odds of the one horse that did win because his payout is higher than the apparent top pick would have been.
options sellers - hope you find a night shelter when your home is repossessed- 7% drop in a week- I'm sure quite a few are now crying. No sympathy