Recent content by Lance P.

Good comments DP -- My trade parameters and assumptions are based on normal distributions and do not take into account extreme valuations and/or large market kurtosis. This is why I write options on the SPX only -- it has massive liquidity and long option chains. The SPX is a tracking index that...

That's a good option war story Raysor -- I've had a few like that myself. I sell SPX Index options every month 4 - 8 weeks from expiration. When the overall market is in an upmove-bull phase -- starting 8 weeks out -- I wait for a market reaction to sell on strong down days (when volatility...

I believe this Article "Cash Cow ..." authored by Carley Garner is simply a breezy overview of the true nature of selling options -- it lacks the specifics and thoroughness that this topic deserves. The Article does not go deep enough into the area of the "substantial risk involved" with this...

A stop order when hit becomes a market order and you will be filled -- the problem: if you get stopped out in a "fast market", i.e. when that day's implied volatility has spiked and there is real fear in the market the bid - ask spread will be quite wide -- hence, you might get a horrid fill...

slik: "I assume you are talking about puts in equity indices." Yes, to be precise, the SPX Index. I agree with all your comments. What I did: "Place a GTC stop limit order on each put at each stike at 1.5 to 2.5 times premium collected" and I was stopped out. When I trade naked I place my...

What do you think about selling puts way out-of-the-money -- scaling 2 to 4 strikes starting @ 2.00 standard diviations to 3.00 std. div. -- 30-35 days from expiration. Place a GTC stop limit order on each put at each stike at 1.5 to 2.5 times premium collected (depending on the imp. vol.); If...

Ashish, your right, it's best to sell options in a high volatility environment ... with the expectation that volatility will go down by your expiration date. For historical record of success you might want to start with CBOE - Home. The "opportunity to sell options" exists every month, every...