Read most of your post...Was wondering about GE? Wait for a recession...GE drops some more. They have reduced their dividend already to 1 cent per quarter. If it looks like we are coming out of a recession (and Boeing gets their act together)...Do a leap.
that’s what tastytrade and optionalpha preach about as being the most consistent way to generate profit in options. I’ll look into it again thanks for the post.
Before you run into traffic blindfolded,come up with a very strong plan on how you are going to manage the short gamma and what to do if things head south..which they will
Yea man that’s exactly what I did the first go around that wiped me out fast. Never again unless I know exactly wtf I’m doing.
Blindly selling options is not the road to riches. How do I know? Been there done that. Selling options is not an edge, knowledge of when to sell, what to sell is the real edge. The flip side is also true, buying options is not an edge.
Knowing when to sell certainly helps shift the odds,but not knowing when to buy it back /adjust is the key to survival.
I have read a handful of options books. Some beginner stuff like options for rookies, as well as wadvanced books like options volatility and pricing by Natenberg, As well as Trading option Greeks by Dan Passarelli, and options as a strategic investment by McMillan. Unfortunately none of those books give you any idea what to do in the market. They talk a whole lot about pay off diagrams and the Greeks, but never make any mention about what you should actually do to make money. It’s akin to reading a stack of medical textbooks, and then someone drops you into an operating room with a dying man on the table and you have to save them. What I’ve learned is that you have to have an opinion on what the market is going to do. And then you use options to express that opinion. Your opinion might be as simple as the S&P goes up over time and you want to use options to change your market exposure to the S&P. You might decide that it’s a little bit too uncertain for you and you would rather use Short puts as a way to get long the S&P 500. You might decide the S&P is too conservative and so you want to buy calls to increase your exposure with leverage. You need to have an opinion and then you need to use options to express your opinion. And that’s the tough part because sometimes your opinion is wrong
We retails are clueless how/when to adjust. We often get it wrong and the outcome is worse than do nothing
I would not put GE in that category since they have been in a death spiral for years. I'm talking about a sharp change in price over a relatively short period.
One should own stocks when they have successfully passed a difficult test, but one should avoid them during the test. -George Soros