Option selling. Too good to continue?

Discussion in 'Options' started by draft730, Dec 31, 2019.

  1. newwurldmn

    newwurldmn

    The answer is: if an option is at its fair value E(pnl)=0, you buy it.
     
    #101     Jan 1, 2020
    Pkay likes this.
  2. taowave

    taowave

    How many puts / underlying notional were you short on a 50k account?

    And how much was the market up during the 4 month period you gained 40 percent??



     
    Last edited: Jan 1, 2020
    #102     Jan 1, 2020
  3. draft730

    draft730

    7-8 contracts. The vol was quite high. Now, I cant short more than 6, even with much higher capital
     
    #103     Jan 1, 2020
  4. taowave

    taowave

    Thats the whole point,and its still hard to believe you put up the numbers you claim..40 percent on 10 delta options doesnt make you 40% in 4 months.You would have to sell apx 30% vol and keep rolling it at apx 30 vol.Selling higher deltas obviously helps your cause..

    Obviously the market rallied and somehow you still sold really rich vol in a contracting vol market..

    No offense,but your numbers are really hard to digest
     
    #104     Jan 1, 2020
  5. gaussian

    gaussian

    For criticizing a guy who professionally made markets in options you sure are happy to take OPs bogus 77% number at face value...
     
    #105     Jan 2, 2020
  6. draft730

    draft730

    Predictably, there are many who doubt the story. I didn't start this thread to brag, just to ask for tips. Here we are. As you can see almost all the trades are short put in ES. There are a few short call trades and some futures, but the overall effect of those is minimal
     
    #106     Jan 2, 2020
    shatteredx likes this.
  7. taowave

    taowave

    You see any way he could have done 40 percent in 4 months selling 10 delta options???

     
    #107     Jan 2, 2020
  8. draft730

    draft730

    I said 10-14 delta. Here are all the trades, that's better than the previous one
     
    #108     Jan 2, 2020
  9. Tomaz26

    Tomaz26

    Why not? What matters is how many you sell.. Obviously he was taking WAAAY to much risk on his account. In a year like 2019 where SP500 ends up like 30 %, it does not take a genius to make crazy returns. But this is taking huge risk. He could only sell 1 ES option on his 50k account and even that is stretching it. He sold like 8 options… So he was selling options on 1 mio notional with 50k account.. How stupid is that is beyond commenting, but yeah, can be done in only up up up years.. But I dont see how he could survive feb or dec crash of 2018. Only if he sold less back then, because with VIX spiking and SP nosediving having 50k and selling 8 ES contracts surely puts (no pun intended) you out of business..
     
    #109     Jan 2, 2020
    taowave likes this.
  10. I have sold a put!
     
    #110     Jan 2, 2020