Arnie Knowing the greeks will not necessarily make you a successful trader, but it will help you understand your risks better. Now, from your previous posts I can see that you still haven't learned about the dangers of long naked put positions: -------------------------------------------------------------------------------- "Quote from Eliot Hosewater: Care to give us some specifics? -------------------------------------------------------------------------------- Not right now, it's too depressing. Arnie Guitar" "05-20-06 05:48 AM Someday I'll find the nerve to go long options, instead of short. Arnie Guitar" I have just one more question for you: Why the obsession with naked positions? All the greeks in the world won't help you if you don't understand the basic risk in your short positions. And if you do understand that risk, then why continue repeating the pattern that has obviously caused you some significant financial loss? Other traders on this site may find your losses amusing and entertaining, but I would strongly recommend you sit down and take a hard look at your trading philosophy, because it isn't working, is it? daddy's boy
I've asked myself that question many times. I think it's the mentality that money is in your pocket right away, as opposed to "hoping" a position will go up in value. Great, a National Holiday and this guy's got me looking for a rope and a tree...............
Money is not in your pocket. It's a fallacy to think so, because if you were to sell an option and then turn around right away and buy it back you wouldn't make a cent.
Profound....... Actually, you'd lose money, not just the commissions, but if you turned it right away, like the next minute, you'd probably have to pay more than you sold it for. But I'm sure an experienced trader like yourself knew that.........
And when I sell my car, the money isn't really in my pocket, because if I bought it back, I wouldn't have the money...... You drinkin'?
OK, let's put it this way, the money is in your pocket, but unless the underlying moves your way or time passes by it's not yours to keep. IOW, you don't make a profit until the position moves in your favour.
It doesn't have to move in my favor at all, it can sit still, time is running out. We are talking OTM writing.......
That's what I said in my post, either underlying moving your way or time passing by. Next time read the posts more carefully! Time passing by is still equal to position moving in you favor, i.e. the option decreasing in price.
Um, you can't stop time, it's always moving in the favor of the writer. To sum up, I believe the way most OTM writers feel, Of the 4 things that are happening, Writers have 3 of them that are good; 1.Time decay 2.Underlying stays put. 3.Underlying moves away. Buyers need 1. The underlying has to move in their favor, usually in a big way. Writer, 3 positives, 1 negative. Buyer, 1 positive, 3 negative. I think that's why people write.