Why isn't everybody selling options?

This topic has already been discussed on these forums to death. Next time, before you start a thread, use the search button.

 

Am I missing something or is there something missing from the question??

What delta options are we talking about? The 80% expiring out of the money may just give an indication as to what the average delta of the option being sold in the market is???

Sell 1 delta options and I promise you that a lot more than 80% will expire out of the money.

 

Here are a few sites that show CTA performance - you can usually register for free:

autumngold.com
managedfutures.com
CTA-info.com

 

+1

 

its not quite the same selling puts. in a hurricane you are required to exchange cash for making the other party whole. you get nothing in exchange but the premium you recieved.
if you sell a put you are required purchase a depreciated asset from the other party at a price that you would like to own it at. you recieve premium plus an asset that you intend to hold for a period of time until you can sell it at a higher price.

 

it all depends on how you invest. shorting puts isn't for everybody, just like trading hog futures isn't for everybody.

If I like GE, the company- the business, and I want to be an owner, I'll short an OTM put. Scenario 1, GE stays up and I get some cash. Scenario 2, I buy GE for a lower price than when I placed the initial trade. Sure I would have been buying lower without the put- but we do what we can with the information we have. Shorting puts, without leverage, isn't necessarily the same as selling insurance.

 

or a lower price. that last statement is ridiculous.

without going into the intricacies of cash v stock settled, indices v stock options etc... it is exactly the same as selling hurricaine insurance and this is a good way to conceptualise it.

 

no its not.

 

this is the easiest options question to answer...BECAUSE IT TAKES HUGE AMOUNT OF CASH $$$ TO SELL/WRITE NAKED OR EVEN COVERED OPTIONS OR SPREADS TO MAKE ANY REAL MONEY!!...go ahead and ask your broker the margin requirements on these type trades...makes one wnat to run and trade emini futures with daytrade margins...

 

Well I am the first to admit I have very little experience in trading options on single stocks (compared with indices) so I would love to hear the example. I am sure one exists.

Is there a difference in me buying a $100,000 house from for $1,000,000; or me just giving you $900,000??