Writing naked calls in inversely related markets

Discussion in 'Professional Trading' started by lasner, Jan 5, 2010.

  1. lasner


    Hi I was looking into writing naked call options in inversely related commodity markets.

    For example the dollar and gold. Does anyone use this method? Could anyone make any good recommendations?

  2. caroy


    I've used this strategy somewhat using the dollar and the grains. I can never recommend truly "naked" strategies as any trade that involves catastrophic risk does not sit well with me. I will however sell ratio spreads and credit spreads in inversely related markets as income trades with a monthly writing strategy. I prefer these at times with high volatility and usually more than 50% out of the money. I also like to feather in some cheap call spreads well below my short strikes which often provide additional income as the markets bounce around.