Man, sorry, but you're one step away from a telethon... We were talking about the HAIRCUT, not the MERITS of the position! COMPRENDE? Please roll over until the urge to respond subsides, it's not worth the effort to read it. riskarb
Sorry, replace the word "put" with "stock". I think you got my drift, though. I edited the original post.
Are you on the right thread?? The dude never said anything about doing a scalp trade. It sounded like he wanted to hold it for awhile. (even though I still wouldn't recommend a 125 lot on a scalp) So, here's my final response to NasdaqTrader. If all you have is $50,000, I wouldn't recommend a 125 lot position. You can lose a big chunk of your $50,000... real fast. Good Luck...
He was asking a margin question(haircut) for an equity option position. I have no idea why you brought the holding period into this discussion, but it's a free country. Scalping or swing trading the position has no bearing whatsoever on the haircut, which was the question posted by NasdaqTrader. riskarb
I think you're setting up a straw man to knock down...in my reading he never said that he wants to sell as many as possible; he just wants to understand what is possible.
Okay, if he was just curious and had no intention of selling 125 naked puts with a $50,000 account, then I'll just say "fuggedaboudit!!" ...lol
but I thought the market was enough of a challenge without having to add stress to one's life by picking fights with other traders who are essentially strangers... seems like there is no upside. Bad R/R. It is a lose/lose proposition.... ... kinda of like arguing with/debating some women! ICe
Wrong on both counts. 1. It isn't great. 2. It isn't simple. Short puts look just wonderful on paper, until the market or the stock falls away from you - which WILL happen - and you need to deal with the consequences of the fact that you are now holding a bunch of shit that just warned for the next YEAR and you are hugely in the hole, and you risked all this for a few pennies of premium. Unlimited risk for a very small gain. Do NOT sell naked. It is one of the few games in the market that can quickly clean your account, especially with the threat of terrorist actions overhanging the market.
I wasn't trying to start a fight, dude. I made a simple post about my experience, and this is what I get back. How would you have reacted?