Selling Premium - Strategy Never Discussed

Discussion in 'Options' started by robertSt, Dec 4, 2018.

  1. drcruz

    drcruz

    I did for a while, until I back tested 2013 and it was disastrous. When I got out of my /ES most recent short call I swore never to do that again. No amount of rolling / adjusting worked during the 2013 ragging bull move
     
    #141     Dec 1, 2019
    ironchef and optaiwan like this.
  2. optaiwan

    optaiwan

    csp strategy is a relatively safe strategy, but when the underlying stock tanks so its implied vol usually soars to cause your PnL deteriorate a lot. actually csp is virtually the same as cc strategy, but in CC, the nice point is that you don't have to experience the higher IV problem as the call options you are selling is always covered by the underlying you are long. sorry for my poor english and i write this from Taiwan.
     
    #142     Dec 8, 2019
    zion likes this.
  3. ironchef

    ironchef

    CC = naked put write.
     
    #143     Dec 8, 2019
    optaiwan likes this.
  4. optaiwan

    optaiwan

     
    #144     Dec 8, 2019
  5. optaiwan

    optaiwan

    I traded luckin coffee (LK, a Chinese APP based coffee chain store incorporated in 2007) using cc strategy and it really limited my return as LK experienced a lofty nearly 70% hike in price after its earning announcement back on November 13. as its price soars, i will begin to use CSP to hang around with this high premium stock. CSP is a little bit safer than CC in its breakeven point, but are less aggressive than CC strategy in its upside participation. but since LK has set up a high watermark, picking a defensive strategy is a better choice.
     
    #145     Dec 8, 2019
  6. optaiwan

    optaiwan

    MOMO is 37.3 as of now, its a Chinese version of Match. i installed its APP and i can read simplied chinese using its APP as i am from taiwan (using traditional chinese)
     
    #146     Dec 8, 2019
  7. optaiwan

    optaiwan

    csp per se is no more riskier than holding underlying assets, aside from the fact that holding puts sold has to deal with the vega risk.
     
    #147     Dec 9, 2019
  8. ironchef

    ironchef

    For something like LK, if I were you, I go long calls: huge leverage, limited loss, unlimited profit. Of course, with high IV it is expensive.

    The US example is SHOP.
     
    #148     Dec 9, 2019
    optaiwan likes this.
  9. ironchef

    ironchef

    I had the same painful experience back in 2013 when I first started trading options. Did a lot of buy-write and CSP. Netted worse than buy-&-hold in 2013.
     
    #149     Dec 9, 2019
  10. optaiwan

    optaiwan

     
    #150     Dec 9, 2019