Option selling. Too good to continue?

Meaningless.

VIX cash bottomed at 11.03 in April.

It's moronic to calc a yield on the haircut. I truly hope you blow up.

 

Just checked, ATM vols were much lower for the first 3 quarters of 2017 compared to now

 

How much BP are you risking? Is your account big enough for PM? Seems an awfully high ROI. I told my Pops I could set up a 50% ROI selling puts, but the leverage would be dangerous. Any market move against me, then I'd be in a world of $H!T.

Do a search for Victor Niederhoffer

 

Then you did a good job managing the position. If you are at maximum leverage, the market drops, 20% from top to bottom and you're only down 30%...that's impressive. Nice job.

 

you are selling puts in a bullish market which means you could have made more money simply going long and you strategy is working only because of the type of market, not any genius in selling options.

When market has its major correction you will give back all of those gains.

 

Sorry, I dont know what BP is. The account is getting close to be eligible for PM (I don't know if that will help in the case of put selling though). I use all the available margin. Currently, I am short 6 puts and I roll the position to maintain a minimum delta exposure

 

I am certainly not a genius. However, I feel more comfortable selling puts compared to being long. I think in the case of a sideways markets, which is maybe the most likely scenario now, I will do a lot better. What worries me most is an event like February 2018. In any other case, I feel I can manage the situation

 

Just dont get married to selling puts. It is a one sided limited reward significant risk strategy and no one gets rich engaging in limited reward significant risk strategies. They simply get over confident.

In all honesty I find it difficult to understand how being long via calls or bull call spreads makes you uncomfortable but holding naked outs keeps you warm and fuzzy at night.

We all have sold naked premium for profit but we dont ignore market conditions and get married to a strategy.

Markets take the stairs up but.come down jumping out a window. You need to be prepared, mix it up. Dont be fooled by erroneously calculating returns on risk or capital.

 

Said every person before their blowout ...

 

Option selling works until it doesn't. If you're not making markets you are one bad market move away from going broke. It seems too good to be true because it absolutely is and tail risk is underestimated, and mostly ignored, by noobs and professionals alike.