The IV risk with short strangles

Discussion in 'Options' started by MrAgi1, Sep 24, 2022.

  1. Apparently
     
    #71     Oct 30, 2022
  2. No- you clearly do not understand English, but forgiven if it's not your first language, nuances are not easy to understand sometimes.
     
    #72     Oct 30, 2022
  3. newwurldmn

    newwurldmn

    that doesn’t explain your reasoning at all.
     
    #73     Oct 30, 2022
  4. newwurldmn

    newwurldmn

    I think you should explain your position with data or a detailed explanation. You either are missing something yourself or you have some interesting way of looking at things. Right now it sounds like you made a strong statement and are trolling (and I know you aren’t a dumbo troll).
     
    #74     Oct 30, 2022
  5. taowave

    taowave

    I dont understand your terminology, and what I do, does not hold up to backtests..

    Happy to backtest test your beliefs..

     
    #75     Oct 30, 2022
  6. Example- you bought Amazon at $183 a year ago- they have lost 50% so covered calls would have given you at least a little mitigation,you may have had the stock called away for $114 too. Stocks , for me, have a habit of not doing what you want. Many newer traders have not known a serious bear market. UK stocks, to quote 'don't gallop', but they are prone to falls. I've been trading since '99 and made all the mistakes- covered calls in 1999 was the worst strategy, in my experience. A bear market until Dubya went mental with helicopter Ben and the free money. Fast forward to 2022 there will be a lot of people nursing losses they don't even want to talk about. Still have not found that UBS research-but my objection to covered calls is that you limit your upside and will stick with a stock in decline- slow death. The irony is , my 'investment ISA (tax free piece of crap) with JP Morgan- who have not hedged their funds one bit. Despite claiming ownership of the 'collar' or reversal. Down 17%. I really hate stocks!
     
    #76     Nov 5, 2022
  7. taowave

    taowave

    I get where you are coming from and where you are going.There is no doubt in a down market,covered call/put is the worst performer compared to strangles and straddles..First and formost,its the most bullish strategy,butmkeep in mind it does outperform the underlying..in a down market..

    IMHO,the reason the to sell puts/covered calls is because you want to own the stock at a lower level,and are OK with the return if the stock goes higher. See Mr Buffet..

    Back on topic,IV exploding doesnt scare me as long as I can get my hedges off at my "predermined" levels based off my hedge vol...
     
    #77     Nov 5, 2022
  8. newwurldmn

    newwurldmn

    I love it when IV explodes (as long as realized doesn’t). My best year was 2020.

    do you have anything on buffet selling puts to get into stocks. I’ve heard people say this but no real evidence.

    the index trade in 2005 had to do with a vol dynamic in variable annuities and not his desire to get into stocks.
     
    #78     Nov 5, 2022