Selling Premium - Strategy Never Discussed

What attracted you to trading options? I'm asking as an options newbie. For me, the attraction is leverage and also the ability to profit when you don't get direction 100% right.

 

It happens. Below are the 60day ivol spread and the 60day hvol spread between the 2.

 

OK, it's clear, thank you. But, are there any other ways to hedge? That's my question actually.

 

Lots of info to absorb here.

http://dtr-trading.blogspot.com/

 

I might be oversimplifying a bit here, but all these strategies are essentially variations of buy and hold SPX. Might as well just buy and hold with your preferred level of leverage rather than go through all the trouble.

 

I'm not so sure how simple it is to get a non compounded top line like this chart. Lotta people not getting 500% non compounded over that time.

 

https://investmentu.com/options-trading-myths-realities/

Options Trading with Vic Sperandeo: Myths and Realities

 

Hi robertSt. Couple of questions:

(1) When do you adjust (i.e. roll down to a lower strike below the stock price), do you wait until end of the day (just in case the stock rallies) or adjust as soon as you notice the stock price has fallen below the put strike?
(2) What do you do if you are assigned a stock?

Many thanks

 

With a margin account you can be 100% long stock and sell options as an additional strategy and then invest the profits compounding the account balance or take income. In an IB account you can be 100% long stock and sell options on futures. Berkshire Hathaway is an insurance holding company that invests the float and profits into additional stock positions and private businesses.

I don’t like being long stock on margin.

 

It's precisely what it is. OP will end up in an all-or-nothing position just like playing martingale in the casinos. He's not factoring in the leveraging effect though, that if he's reasonably far out of the money and the option gets within 1 point of his position the IV has likely spiked way beyond the model he has (if he has any) and is likely bleeding out.

Karen the SuperFraud's strategy relied on fraud. Then volatility striked and wiped out 100 million in paper. For reference she basically followed this exact strategy, fraudulently rolling losses to the next month on the HOPE that they'll improve next month. OP is not a fraud (most likely) but is making the same fundamental mistake.

Selling premium in this way is just deferring a bad trade over and over. Sometimes it'll work, sometime's you'll be remortgaging your house. OP is far too confident.