Naked Options Selling!

[esSuCai]

Sold short NZD/JPY telephone, hit 89.71, expiry May 14th, 2007 for 15 pips.

I really entered the (original) live trade yesterday, however, decided today to begin posting my transactions here on a regular basis. I have been forward testing this plan for a month or two. In case of a disaster (pair flys beyond the attack) I cover the choice with a place position.

Upgrade (May 8th): Delta falling faster than Bush's approval ratings...

upgrade (May 9th): NZD unemployment information to be released now @ 6:45pm EST.. This is a must watch to make sure the position stays secure.

[esSuCai]

Update (May 13th): New Zealand retail sales came out better than anticipated... NZD/JPY jumped about 60 pips by the low of the day. The New York cut (10:00am EST) is just about 14 hours away and I still have about 115-125 pips of leeway between the attack and the present cost.

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[Axniaxaxaxy]

Sold short NZD/JPY call, strike 89.71, expiry May 14th, 2007 for 15 pips.

I really entered the (original) live trade yesterday, but decided today to begin posting my trades here on a regular basis. I've been testing this plan for a month or two. In the event of a disaster (pair flys past the strike) I pay the option with a place position.

Update: Delta falling faster than Bush's approval ratings...

Well, Sell Phone @ 89,71. So u hope the cost will go down, I'm right ?
Sorry, I want to ask some question here :

1. Why u choose call naked? Isn't that too insecure (at least for me), coz if cost go up, then u'll have infinite reduction.

2. When u sell call, ATM, ITM or OTM ?

3. How long u'r sell call 1 month 'til expired.is it?

Sorry for my english, hope u understand

[TkSuntttesrk]

Think about this for a second. If a disaster happens, such as if the price moves upward 1000 pips above your strike price. You are going to end up losing large. There will not be any way to pay for the option with a place position in time to get a price low enough to break even. You may lose as much as it moves up and past the strike price. If you try to buy the inherent, you will pay the considerably higher price.

1000 pips with JPY during 6 hours of sleep is not that uncommon.

Of course, maybe you're considering placing some buy orders. But if the price interruptions significantly, it wont help. If you get assigned the telephone, you will need to pay much more than the quantity that would make in the purchase of the underlying.

I'm just sharing this to help, so please do not take it the wrong way. Selling naked calls can be quite dangerous. Note I mostly have experience with equity options, and not FX choices. I have only traded FX choices on demonion accounts.

Frank

Sold short NZD/JPY telephone, strike 89.71, expiry May 14th, 2007 for 15 pips.

I really entered the (original) live trade yesterday, however, decided today to start posting my transactions here on a regular basis. I have been forward analyzing this egy for a month or two. In the event of a tragedy (set flys past the attack) I insure the option using a place position.

Update: Delta falling faster than Bush's approval ratings...

[Axniaxaxaxy]

... Think about this for a Moment. If a disaster happens, like if the purchase price moves upward 1000 pips over your strike price. You will end up losing big.
Frank ...

I concur with you honest, coz the weakness of sell call, u have infinite loss and profit only premi / month. I'm fearful of difference, can't stand with this....

so be carefull ...

[axSesstric]

Selling nude calls can be exceedingly dangerous.
Frank

particularly if one is composing nzdusd calls. Good luck.

[TkSuntttesrk]

Mizzu_x7, DunningDuke,

Thanks for the feedback guys. The premium would not allow it to be worthwhile to the cases that I looked at, although I looked into an Covered Call. I looked into purchasing the first, then selling a Call. But what if the price of the premium drops not farther than the pair? The premium was really small even for the highest paying volatility monies, which the range was tiny. The set may just move so or one or two hundred pips during a 1 month period to be rewarding.

How are people making money with forex choices? Is it mainly through speculation?


Thanks,

Frank

[CuruTkSaca]

Ah, good to see a few options trading atforexforum.co.za

it's little known that choices are ole 's expertise

regarding the covered call, dont feel as though you have to purchase the underlying of the specific money that your alternative is for. Some currencies have high degrees of correlation, yet the choices are priced in different implied volatilities. Buy an option instead of the underlying, and you may choose to look from a basket of currencies that are connected. But if you moved to the trade and you are second guessing that decision, it seems as if you are in a situation that is terrible, and there are not any great solutions for you. Expect to learn from the situation and you just have to get out alive.

[Axniaxaxaxy]

Mizzu_x7, DunningDuke,

Thank You for the feedback guys. The premium wouldn't make it worthwhile to the few instances that I looked at, although I also looked into an Covered Call. I looked into buying the inherent first, then selling a Call. However, what if the pair drops than the price of the premium? The premium was so modest even for the top paying volatility monies, the scope was so small. The pair may just move one or two hundred pips or so during a 1 month period to become profitable.

How are people making money with forex options? Is it mainly through speculation?

Thanks,

Frank

what do I mean by telephone? Can it be Purchase Futures sell call coz if the price go up your sell phone will covered by your own Futures ... or Purchase call sell call (Max loss is Spread). For me personally, that's to expensive buying options forex coz I do not have a great deal of money

sorry, but I do not really understand what pair drops much further than the price of the premium ... and yes of course if u'r on Short position on options 1 month is your best option but if u'r on Extended position the very best options is 3-7 months ...

I think that the profesional traders have a plan on the forex options, about speculations I do not understand ...

I hope there is somebody know about Gap Strategy about forex options, coz so much I understand just for stock ...