Option selling for premium

Discussion in 'Options' started by John9999, Mar 3, 2018.

  1. John9999


    I have sold short premium with success before. I am like looking to find options at $.10 or $.05 with a week or so left. How do I find the right candidates. Does anyone have a service to recommend.
  2. spindr0


    If you sell calls, pick stocks that don't go up. If you sell puts, pick stocks that don't go down. Pretty simple, eh?

    Call me a cynic but if some service had a high percentage ability to pick stocks that do this, why would they sell the touts for peanuts when they could be selling the sh*t out of those winners and living the good life. No one has a crystal ball and knows what future price will be.
    EliteThink likes this.
  3. @John9999 To me, selling options for 0.05 or 0.10 doesn't make sense. The risk is too high compared to reward. And generally speaking, I don't like to sell weekly options due to high negative theta. You might win 3-5% most of the time, but when you lose, the losses are brutal. For example: http://www.5percentperweek.com/customer/customerMain.php?section=tradePage&step=viewClosedTrades or https://manywaystotrade.com/option-scalper/ Plus I like to have some other strategies to reduce the risk and provide hedge in case the premium selling strategies move against me.

    @spindr0 I heard this argument many times. "If your trading system is so good, why to sell it for few hundred bucks? Why not to keep it to yourself and and earn a zillion dollars?" Matthew Klein, CEO of Collective2.com, provided few good reasons Why To Sell A Winning System.

    The same question can be asked of virtually the entire financial industry. Why do top-tier hedge funds accept investor money? If the guys at Two Sigma are so smart (and they are), why don’t they just trade their own money from an unmarked building in Soho? Why go through the hassle of raising capital from investors?

    But even if you don't buy any of those reasons, the only question you have to ask yourself: is the subscription service helpful to you? Does it help you to become a better trader? Does it help you to make money?

    If the answer to those questions is yes, this is the only thing that should matter to you. Why the service is doing this is secondary.
  4. John9999


    Thank you for the input. I went and looked at that website for the 5% per week. Something is weird. They have an open date that is after the expiration date? Maybe they have those two columns backwards.
  5. It's not after expiration date. Feb4 refers to Feb week4 options.

    But you missed the point. They are making 4-6% most of the weeks, but at least 2-3 times every year they have a catastrophic loss of 60-80%.
    jys78 likes this.
  6. John9999


    Oh I saw that. For sure
  7. spindr0


    Your article at Steady Options is a streaming load of you know what and it supports my point completely. As the author of the article and as a seller of pricey subscription advice, you have nicely explained why selling advice is beneficial to YOU. After reading that, I feel like I just had a session with a used car salesman.
  8. Neost


    You can go to Barchart website, then click Options - Highest Implied Volatility.
    This can give you some candidates to look for with inflated premium.
    Just make sure it is not inflated due to upcoming earnings announcement.
  9. You asked why someone would be selling a winning system. The article provides the answers.

    How this is beneficial to me should be not your concern. When you give you money to a money manager, do you ask how does it benefit the money manager? No, you should how it benefits YOU. This is the only question you should be asking.
    OptionsOptionsOptions likes this.
  10. You have failed to state the reasoning behind your decision to make such a trade. Have you developed a plan? What is your edge?
    #10     Mar 3, 2018