Option selling for premium

Good for them. Bad for you.

You could have been long stock at 122-your put premium and could have sold that stock at 125.

 

You beat me to it

 

You must have mis read my post. I was put 200 shares at 122 even though I was short 10 contracts so I never received the other 800 shares.

I sold my 200 shares this morning at 125 to lock in my 600$ gain. So good for me bad for the other person. Even though it could of been much better for me if I had been assigned the full lot of 1000 shares.

 

Had the stock (continued to) tanked:

1. the purchaser of those 2 puts would've thanked their lucky stars .

2. You would be relieved to only be the bag holder on 200 shares and not 1000.

Consider yourself fortunate .

 

Your post was unclear.

Yes, you did well on the 2 contracts you were assigned.

 

don't know the thread starter, but try some SPY options that expire that day for .05 / .10 and there you go, you held them one day. come in halfway through the day, and you'll find the .05 and .10 people want to unload very very very easy far OTM

 

How are you protecting your capital in this downturn? Are you selling naked puts still?

 

1) I *never* do naked options.
2) For the past year (since, December 2017), I have pushed hard into rules-based trend exploitation. (Read, "trend-following algo"...) It happens to operate off of EOD data, which I think is important.
3) My option positions spreadsheet *really* illustrates where things are [or, could be] going -- so we're back to a more-normal option-selling market, where things are vastly improved by broad short-strikes and the selling of those strikes on market excursions.
4) For 5-6 years, my activity had been constructively 100% in credit spreads, and 90% on SPX. For 2019, I expect (HOPE?!?) 67% in long/short trend-following positions, and 33% credit spreads -- *even* given the "return" [?!?!?] to realistic volatility.
5) That "market picture" of the options spreadsheet remains an important tool for the when/who-much of individual trades, and I expect that (very much) to continue. (Yay, me. )

 

How tight are your spreads? I am looking to hedge only fast moving market declines (ie. ones during which one cannot adjust positions). Is it possible to hedge most of the decline with deep OTM options (units) that have undefined greeks, but which tend to appreciate in value more during "shock" events than models predict?

 

My own spreads' width varied with time and distance from the market, shrinking as δ↑ or Θ↓.
I'm not sure of your question, but surmise this advice worthwhile to offer: hedging event risk with any manner of farOTM options is generally ill-advised.