This is a potentially really interesting topic! Options are sexy However, yet again, I am going to be 'negative'!
There are people on this board that can tell you how to price the funkiest of options, that can help with modelling any sort of vol surface you like, and are INCREDIBLY knowledgeable about it. No, I am not one of them, and I am not massaging my own ego, but it is ridiculous that no-one ever seems to ask a real options question!!
There is never any mention at all as to how options are actually priced, as to how anyone is managing an option portfolio, even delta hedging - surely a reasonable assumption as the most frequently queried topic by serious traders - is NEVER mentioned.
I am here because I have too much time, and am very keen to learn. I am beginning to think that my very limited knowledge is already miles ahead of the average discussion. Again, feel free to ridicule me if you wish, that's my view though. There never seems to be any real discussion of anything of note apart from people claiming to be buying the low and selling the high!!!!!
Hopefully someone can convince me otherwise, but I am becoming disheartened. I'm sure for many the prospect of my departure is a welcomed development, but come on - there must be some serious option traders out there!!!
Grrrrrr - it annoys me!!!
Come on, someone make me look a [email protected], tell me I've got it all wrong. I'll eat my proverbial hat with glee.
If your strategy is to just short options without every worrying about the vol market or your short gamma position you will blow up.
You are constantly short tail risks. If you're not looking at skew, roll down and absolute vol level how can you be sure that the trade is good?
For example selling vol at these very low August levels is not a trade i would take regardless of what the chart technicals are telling you, it just not good value here.
If you want to sell a CZ 700 call option uncovered right now because that is what your greeks are telling you what you should do then knock yourself out.
Since I am writing far out of the money with a few months until expiration with the sole purpose of collecting premium vs. time decay. I can't help you here. For me to monitor the greeks it would be useless.
Whenever there is a Strong Bull signal, I will look to Write a Naked Put on it,
although sometimes I'll Buy a Call instead
Conversely, if there's a Strong Bear signal, I will usually look to Buy a Put
although I will sometimes Write a Naked Call instead.