Would this be a good options trading system?

Discussion in 'Options' started by DarkProtoman, Mar 17, 2008.

  1. Would this be a good options trading system:

    Write OTM puts to accquire shares of RIG and GFI, and, if assigned, write OTM calls against those shares.

  2. 1) It would work "best" in a stagnant market.
    2) You're at risk of locking-in losses if your short-puts get exercised and the stock keeps falling.
    3) Then, your OTM short-calls would be written at a lower strike price than the put strike price. You may not collect enough premium to be profitable.
  3. NO.....You severely cap your gains and are exposed to all the risk.
  4. Mmmm...so I should just buy slightly ITM or ATM calls, and write slightly ITM or ATM puts, then? Go synthetically long RIG. Or just buy calls on RIG.

    And what's your opinion on RBS? Looks like solid fundamentals.