Hi, hi, an egoist and "greed is good" type... ;-) In this short selling game, time is the friend of the trader... because one still can try to fix the situation in the remaining time by initiating some hedging trades... If done right, then one could get out of the situation w/o any loss (excluding the credit).
Reacting immediately means that you are hedging at inception, or it moved in your favor, in which case you would not need a hedge. You make no sense at all.
I was talking of the 30 day example: 29 days it went good and then it begins slowly to go against the trader...
I disagree. One has a chance, and the remaining time is the helper here... It's up to the ratio of the hedge... The challenge is: develop a profitable credit system where under normal market situations you never can lose your own money (excluding credit rcvd).
There are two types of hedging: - one time hedge, and - continously hedging The second one is very interesting... and that one can even be started from the beginning on, ie. it is IMO the safest and also the most profitable... It works like a rachet device... I'm gonna to study it...
Yes drcha aka Captain Obvious that is correct. That's why I suggested to botpro a few days ago to try a PEP Put 90/85 Credit Spread instead of selling the July 15, 2016 PEP 90.00 Puts naked.
As in Credit Spreads or Covered Calls instead of being short naked? As in micro-managing by selling and/or buying options to adjust the trade as it progresses? The first choice is the safest and it will define your risk from the open. Closing the trade at a loss or profit is better then micro-managing the trade with additional "legs".
FYI: For discussing "continously hedging" a new thread has been opened: http://www.elitetrader.com/et/index...as-a-rachet-device-to-lock-in-profits.298295/
This is not a matter of agreeing or disagreeing. It's a matter of facts and mathematics. There is no such system.
Use the search function dude - it's been discussed a million times before. The site doesn't revolve around you.