Fascinating. Could you please explain how a stock gapping up $31 is going to cause any losses at all, let alone huge losses, to short PUT positions?
Come on, Mav. Let us kids have our fun. So it's at the expense of the confused and dimwitted. I'm just doing what I attempt to do in trading -- fully exploit a clearly discernable edge. Is that so wrong?
It just so happens she was writing calls, it could of just as easily been puts with the same outcome on bad news. Okay, so you're saying you will buy the stock if you need to. Well, under your example, you would need to buy $250,000 worth of stock. If you were a broker, would you just take someones word that they'll pony up $250,000 if needed, and sell them 125 puts?
I'm talking about selling naked in general, it could have been puts she was selling and got burned on bad news.
No, again... Stocks cannot trade negative values, hence put selling is inherently limited risk, call selling is unlimited risk. Selling cash-secured $10-strike puts into bad news is not the same as selling $10-strike calls into good news. riskarb
Since you refrained from insulting me, I'll give you one more go. Okay, lets say you're short 125 puts and you've got $50,000. Guess what, if that stock falls 4 dollars, you're out of here. And if you don't think a stock can't fall from 10 to 6 in a hurry, guess again. (boy, you kids have a lot to learn...lol)
I'm not a proponent of selling single-sided positions, let alone a 125 lot on a stock with micro-risk. The point was that the risk to short calls and puts are not symmetrical. BTW, you were the one who began with the profanity. riskarb
You're kidding, right? Let me into that put sale at 10, would love to bank the four handles from 10 to 6. riskarb
Then what the hell are we talking about, dude. This thread was about selling 125 puts with $50,000 in the account. Take my advice, even if your broker is crazy enough to let you, don't do it. As far as I'm concerned, this thread is closed. Cheers...