Option selling for premium

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

  1. Thank you @tommcginnis

    What I learned in my 15 years in the markets is that things are never black and white. There is more than one way to make money with stocks and options. And this is the most annoying part of TT education.

    45 DTE rule?? I myself prefer around 45-50 DTE, but to say that this is the only right way to do it?? There are so many additional parameters involved.

    And yes, we have a lot of stuff on our website. Our blog has over 300 educational articles, including guest posts from our contributors team that includes some of the most respected names in the industry (Mark Wolfinger, Ophir Gottlieb, Steve Burns, Michael C. Thomsett, Bill Luby and more). We have over 90,000 posts on the forum, including 5,000 posts on the public section of the forum. And unlike TT, we are very open minded and accept different opinions.
    #111     Mar 7, 2018
    tommcginnis likes this.
  2. rtw


    i would have a really hard time getting a physical copy of james cordier's books living outside the usa.

    the strategies that mr. ron99 publicly shares do work and would be a piece of cake to duplicate. he opens positions at strike prices more than 20% below the current prices on the es contract, always keeps 4, 5 or 6 times the required initial margin for each position and exits at 50% profit. since 2009, the es hasn't had any declines greater than 10%, so mr. ron99 has 100% winning rate on his trades since at least 2015.
    #112     Mar 7, 2018
  3. ironchef


    You must be doing well emulating his trades? I should probably try them out too.
    #113     Mar 7, 2018
  4. Has anyone looked at SJ Options youtube here is one where he analyzes some tastytrade strategys. I myself actually started with tastytrade which I think was very lucky I was more skeptical of the other people that I found which were the typical make a million dollar trading is easy pitch line. But for me after I didnt see my account going anywhere and on my sold spreads I would notice how the long side for the most part always ended up ITM at expiration so I started tweeking it doing calendar spreads and legging out the short side when i collected enough premium. SJ Options has a couple of studys showing the risk to some strategys at this point I wouldnt pay for his education but I do think it is interesting. He seems to have a claim that tastytrade has stolen his research before I would be interesting in his stuff though just to see although his claim of not having a losing trade is a bit skeptical(I think he is talking about a simulator or something)
    #114     Mar 8, 2018
  5. Mugono


    You're quite a character Tommy.

    1. I stand by the statement; theta is not a edge. This platform is (supposed to be) partly educational and to ignore the knowledge / experience of the audience is to deny reality. We have people here who are blowing out because of the leverage required to earn a reasonable $ profit selling puts for pennies. The OP's initial post spoke about selling $0.05 and $0.10 options.

    2. Theory is great. Let me know when you find the 'probability-driven function(s)' that perfectly replicates the real-world evolution of price. Forcing reality to converge to your (proprietary?) probability-driven price function isn't helpful to anyone.

    3. I chuckled at your response. Are you a novelist :). Your examples and point is based on your imagination so it's difficult for me to comment. It's not remotely close to my point; but I accept that novels without fictitious elements don't sell as well :). That said, I'd be interested to understand how you were able to mathematically average your cost basis down to $0 [ I don't really, lol].

    4. Putting aside the synthetic equivalence of covered calls and short puts - this I can accept.

    1 out of 4 - good job !
    Last edited: Mar 8, 2018
    #115     Mar 8, 2018
  6. tommcginnis


    Did it really take you this long to twist up a retort when a simple admission would've take.... 60 seconds? You were way burned, dude. And you have my pity.

    #116     Mar 8, 2018
  7. Mugono


    Lol. Thanks for your pity :).

    It's been a busy week in the real world and responding on an internet forum hasn't been a priority. Nice debating with you.
    #117     Mar 9, 2018
  8. Bekim


    Sell options that are closer to the money, get more premium
    #118     Mar 10, 2018

  9. Kim, I'm just now reading about these credit spreads, but when I see a trade listed as a huge loss of 100% or 90% or something, isnt that not of an entire account, but just the amount of capital tied up? how is that measured exactly?

    For example. Stock is at 85 and i sell a call at 90 strike for 2 and buy a 95 call for .5. wost case is that stock goes to 95 or higher. in which im down 5 minus the 1.5 delta on the premium, thus down 3.5. how would this be reflected percentage wise in the loss column, since i really didnt even use my own money to open the position?

    #119     Mar 10, 2018

  10. Both of these pictures copies showed a very large NEGATIVE overall return from selling the credit spreads, due to very big losses a few times completely crushing the smaller profits. So, if this is the case, is not the correct strategy generally to buy the credit spreads? I mean, if one is a loser over time, doesn't the other have to be a winner? With the caveat that I'm not sure how the win/loss percentages are calculated in that in a credit spread you are not really coming out of pocket, so I guess the percentages would really be based on the amount you would have to keep in the margin account.
    #120     Mar 10, 2018