Put sellers, welcome to hell

Discussion in 'Options' started by stock777, Nov 20, 2008.

  1. Dangerous game you play
  2. Not always !
  3. lindq


    Yes, Always. :eek:
  4. just21


    Try puts on GLD and GC futures. I wouldn't mind being long at lower prices.
  5. how dem covered call sellers of 'premium' to suckers doing?

    can we say picking up nickles in front of bulldozers.
  6. spindr0


    Hey! Get your facts staight! Covered call sellers make a lot of money on their option trades!!!

    It's the stock that kills em (g)
  7. not always... if u choose 2X ultra shorts . like SKF.
  8. I closed out my unprofitable put options a few days ago but my naked calls have been quite profitable :) :)

    I am closed all my calls yesterday.
  9. :D

  10. I trade the ES. The most successful trades I made on the way down were "covered puts." But forget about waiting until expiration. On these big blow-out days, just close out the entire trade. I discovered that as the ES gains 5 points, the ATM/ITM put loses about 2 points. So, given a 50 point drop, the short ES FUT gains the 50 points, and the PUT loses about 20, for a net gain of 30 points. One contract nets you $1500.00. I tried some naked put selling and some bull put spreads on the way down. And despite being anywhere from 100-200 points OTM, the market always seemed to hit my stop loss and even continue through the long leg. I had success with Short Iron Butterflies while the market's VIX stayed below 30. Once the VIX took off, the IBs failed. So, at this point, if one believes that we are close to the bottom (739-745), then bull put spreads and naked puts should work out. So far, selling the rallies (covered puts in this case) has worked every time there was a bounce from the lows. BTW, I looked at debit spreads for the ES and because of the wide bid/ask spreads, these trades don't look so good. Even bear call spreads don't look so good, for calls certainly do not move like puts.
    #10     Nov 22, 2008