aja8888
Moderator Emeritus
This market has been too volatile for me join the options party. I'm sitting pat.
No opportunity to roll those options? Or feeling like I do that we may see some drops after this week's pop?
I've been quiet lately on selling options, but this week's pop has me feeling that we may see flat or more likely down on prices, so sold a few that are out of the money to pocket a few dollars. If they do get assigned I'm ok as premium plus strike price would be above my cost, so ok either way.
This market has been too volatile for me join the options party. I'm sitting pat.
Volatile market is when I make money. In 2020, when COVID broke out, I made more than $300K on option premium.
Have not duplicated this performance since, even though the whole portfolio is larger now, meaning I have more shares to write options on. I am slacking off too, taking a month-long trip and all that.
I do believe you can make more money if you spend more time. But on the other hand, I need to get out to exercise, dig and turn the soil to plant veggies, going for a walk, tend to my solar system, fix leaks, etc...
Just chatted with Schwab, they said T-Bill can't secure a write but a money market fund could secure it.I use BlackRock T-Bill fund TSTXX, as it is considered cash for backing put options. TSTXX is priced at $1/share, the same as a money market fund. Its current yield is 2.97%.
I don't know about individual T Bills. You will have to ask your broker.
I want to dip my toes into the options market and sell calls and puts for holdings I already have.
Do you think VZ (verizon) and VEU (Vanguard International ETF) are liquid enough? I'm really only interested in positions I already have for now.
Thanks for any feedback!
VZ is definitely liquid enough I have been trading covered calls on it for a while. Fairly good premium and enough to double your dividend every year. VEU is not very liquid, you would need to put a price in you are willing to sell your shares at and realize you may have to sell them as it is not very liquid, and very wide bid/ask spreads,
How far out are you selling these VZ calls. Under a month is usually pennies in premium.
I was looking at calls out within one month. I figured 2-3 months out would be too far. But i will start to look now. Frankly, even at the 45 strike it wouldn't bother me to have the contracts called. But I think that VZ has a good chance of reaching that strike by April.
NW-Bound: Thank you for the list. The context and explaination helps. I will research IV, beta and Greeks some more before I take the leap. (no pun intended).
But I think VZ is a good beginner underlying to start with.
I was looking at calls out within one month. I figured 2-3 months out would be too far. But i will start to look now. Frankly, even at the 45 strike it wouldn't bother me to have the contracts called. But I think that VZ has a good chance of reaching that strike by April.
NW-Bound: Thank you for the list. The context and explaination helps. I will research IV, beta and Greeks some more before I take the leap. (no pun intended).
But I think VZ is a good beginner underlying to start with.
Can you guys suggest any reading materials such as books that would be good for a beginner. I'm ordering Trading Options as a Strategic Investment by Lawrence McMillan (5th Edition). This is a thousand page tome. But if you have found some other books particularly useful I would appreciate the reference.
Forgive me... I thought naked shorts were illegal, not permitted? Oh, OK. The thread title talks about naked PUTS.