How many of you, who are consistent net sellers of options have been caught in a Black Swan Event... http://www.turtletrader.com/nassim-taleb.html Once you have voted, please elaborate on the strategies you would anticipate using in the aftermath of a Black Swan Event...
To the people who have suffered a Black Swan Event, are you still a net seller of options? What kinds of contingencies do you have in place?
Candle, being net short of an option (creditor) does not mean you are going down hard with a black swan event, if you are completely naked short, that can be a different story. Selling options naked, as in a situation where you may get unlimited losses for a little profit is for the addicted gambler IMO.
Depends on probabilities, they eventually will happen, just like LTCM went down hard because they didn't take into account the mere possibility that Russia could ever default on its debt. That's just overlooking the possible. Anything can happen Candle. You gotta be optimistic though.
As a net seller with the assumption of unlimited losses on at least one side, what contingency strategy do you have in place?
Whatever happened to learning this stuff on your own. Don't you realize that most guys that have learned to trade options have learned from their own mistakes and their own efforts and not from asking others for the answers. This stuff is not that hard to figure out if you take the time to read some books and put some money on the table. Options are very intuitive, much more then stocks. Stop being so lazy. Pick up a book, there are many out there, and find the answers that you are looking for. Answers have no value without the effort to attain them.
Hehe, I tried to work things out for myself, but I seem to be too brain-dead for this options game...
I sell straddles and strangles on MNX and SPX and had positions on going into last week. My risk management depends and setting stops and rigorously honoring them. They fired last week and I rolled down and then they fired again and I went to cash where I will stay until things quiet down a bit. But this was no Black Swan: I'm actually even for the month of April and up 5% on the year. As my annual goal is 15% I'm actually still on plan.
Yeah, stick to politics and international affairs. You clearly have a much better handle on that stuff. Wowza.