Hmmm, maybe that is what I was thinking of... You sell a put 100 strike when stock is at 50. The stock drops to 1. The buyer of the put exercises, and now you are stuck with a stock at 100 while it is at a buck. I guess the reason it cannot be unlimited is because you would never be in a scenario where you could sell a put at 1M strike when stock is at 50?
A related posting referencing the quoted topic: https://www.elitetrader.com/et/thre...put-spread-vehicle-also-for-cashaccts.368732/
Unfortunately outside the journal one may not post a link to an article in the journal. The mod told me. I today could not link an IMO important posting here by @vanzandt, rather I had to copy the content of the posting to the outside thread, stripping the link to the journal... Never mind, if that's what's the rule, then that's what's the rule.
Ok, just opened the following new thread for developing an Auto-Trading program for options trading: A minimalist KISS Options Auto-Trading for TDA CashAcct
User @ondafringe has posted a good Vertical Put Spread trade for studying (ie. a ShortPut + LongPut, giving a spread): https://www.elitetrader.com/et/threads/options-first-paper-trade.369091/
I've posted a solution on quickly computing -1SD and +1SD of a stock price, if no historic data is available. It simply assumes a Normal Distribution (ND). Then I extended it for the LogNormal Distribution (LogND) case. See my postings in this thread: https://www.elitetrader.com/et/threads/some-maths-required.369103/
An interesting posting/thread about a guy who since Jan 2021 makes on average about 40% to 50% profit per month by daytrading, as I understand it mainly w/o any options trading; ie. does standard equity trading, SPY etc.: https://www.elitetrader.com/et/threads/is-what-valckrie-claims-possible.369418/
Mystery Maths: Each item has its PLpct for its own DTE. Each item can have a different DTE. The PLpct is then transformed to an annualized PLpct and this then used as a descending sort key in a multiset (ie. dupes are allowed). When I change it from AnnualizedPLpct to MonthlyPLpct, then the resulting multiset differs! Isn't that mysterious, and puzzling? Or can this mathematically not be true, and therefore there must be a bug in the program?