Selling Premium - Strategy Never Discussed

^ ....and....there it is......I knew me posting on this thread would get the village idiot himself all riled up.
"Nobody asked you anything, piker. "
And what makes you think I was talking to you imbecile?

 

You answered your own question.

 

Not grasping the importance of the concept of risk adjusted return is pretty fundamental to anyone who trades. I'd submit if one considers that "not that big of an issue" it could be worth re-examining one's concept of what big issues are?

 

I think @Sig and @destriero are being a little harsh.

I don’t see anything wrong in selling puts unlevered (if that’s what he’s doing). The drawdown risk is huge and he’s giving up his upside.

There are other ways to measure risk aside from sharpe, sortino, etc.

 

However, I don’t believe what he’s doing is capable of earning 35percent/year consistently

 

It's not that there are other ways to measure risk, it's that the OP rejects any measurement of risk. That's being amateur and suboptimal for no better reason I can discern than willful ignorance. While the OP is obviously immune to the concept, there are any number of other people following along who could benefit from stopping to think about it. You're right, it's harsh, but subtle was tried and didn't work.

 

I applaud @robertSt for his eagerness and willingness to share what he considered a highly profitable system. He is not soliciting money nor selling courses so this makes him very special.

The professionals are casting doubts on his claims. They are pros for a reason so if it were me, I would be carefully looking at those comments and see if I can incorporate them into my model.

As an amateur I don't quite understand risk adjusted return and Sharpe. If I have a system that is lumpy but all on the up side with high standard deviation, low risk adjusted and low Sharpe, you would say it is bad? Could that be @robertSt's system?

 

You would probably like the Sortino ratio rather than the Sharpe ratio. It is very similar but differentiates between upside and downside risk.

 

Thanks. I will need to look at calculating Sortino on my own because my broker only provides risk adjusted Sharpe.

 

At the end of the day they're not much different, but like you I just have an intellectual hang-up with treating upside risk the same as downside.