search for dmo's post, understand everything he posted. Then search for atticus' post, once you can decipher atticus posts, you should know enough to have your own thought process on option trading.
I feel the need to glom onto the Wolfinger train. I stumbled onto his blog ( http://blog.mdwoptions.com/ )at a time where his efforts rewarded me well. His latest book, "The Rookie's Guide to Options," provides great foundational material. Within its pages you will learn the basic nature of options, the concepts of synthetic positions, the sorts of risks associated with option positions, the rudiments of option pricing, a general overview of (several) strategies and their purposes, and some thoughts on how he himself trades. I would caution that his blog reflects his particular affection for what seems to be a 90 day trading horizon. His earlier books are not as comprehensive, but "The Short Book on Options" is truly short (50pp?) and suitable for someone with a long term trading horizon. Don't bother with "Create Your Own Hedge Fund" (sorry, Mark) as the others provide better value. As education goes, "The Rookie's Guide" is $23 well spent. Throw on 2 or 3 similar works plus 10000 hours training yourself and you'll be an expert. Do not think you can skip (but you may learn on the job) the 10000 hours.
Thanks for the kind words. I tell anyone who says he/she is going to buy my 'books' that I'd skip the first two and just buy the Rookie's Guide. It has all the information required to begin using options as a well-informed, prepared trader. Mark
We each have our own preferred trading styles, but for me, I would prefer to be assigned 97% of the time, rather than 'under 3%.' Being assigned means you earned the maximum. Why would you want to earn less (I'm not referring the the situation in which the stock ends one penny under the strike). Mark
"My historical assignment rate on put writes is under 3%, and I've always made a profit on those via calls/div. -------------------------------------------------------------------------------- "We each have our own preferred trading styles, but for me, I would prefer to be assigned 97% of the time, rather than 'under 3%.'" Anytime I've been assigned on a put, and that is what he is talking about here, I lost a chunk of change and ended up with stock that sounded like a buy when I sold the put but was now way below it. What strategy are you using that makes you want to have short puts assigned to you and you make $ on it?
One of the biggest impediments to profitability is applying one strategy to all market conditions. Many option traders get married to long or short vol, and specific-positions, in all vol-environments. Passive/automatic strategies are usually passed-over at some point in the learning curve.
Yes. My big mistake. For some reason I thought the discussion was writing covered calls - which is when I want to be assigned. Certainly NOT naked puts. I apologize. Mark
That's a 5 star statement ! You have to adapt to current market situations and IMHO, ramp up what works.