Thread: Naked Options Selling!

Are you really going to buy a debit disperse that is put? Which month? How far out do you usually buy?


Frank

Originally Posted by ;

With so much talk of a transport trade reversal, this would be a good time to buy a set time spread on your favorite transport pair. Watch this space! More about that later!

With discussion of a transport trade change, this would be a fantastic time to purchase a set time spread on your preferred transport pair. Watch this space! More on this later!

UPDATE: Friday, June 22nd: Silent markets together with the insatiable thirst for interest sends GBP/JPY into 247.8. That's 500 pips above the strike. At those levels, at put time spread appears much more attractive. More details on this later.

Originally Posted by ;

Thanks!!! This egy'll be attempting .


Frank

Sounds good! Allow me to know how it works out. Maintain the position size small. It's tempting to take on a massive position and collect a ton of premium (that, together with the absence of a hedge is that which caused a 25-30% drawdown for me personally when I first started analyzing)... so do not do it.


UPDATE: Thursday, June 21st: The BoE meeting minutes were somewhat more hawkish than expected (vote was 5-4 for steady vs. increased rates, 7-2 expected) contributing GBP/JPY to top the 246.5 level.

Thank You!!! I'll be attempting this egy .


Frank

Originally Posted by ;

Absolutely. After some of those drawdowns occurred (in the very beginning), they were extreme (~30%), but that was my fault (i.e. not hedging the option, or allowing the spot order to reverse with no stop). I set as restricted drawdowns stand that I managed to recover into a high water mark within a rather short quantity of time.

Originally Posted by ;

Can you say that you've been overall profitable with this egy for the previous 10 months?


Thank you,

Frank

Absolutely. When some of those drawdowns happened (in the very beginning), they had been intense (~30%), but was my fault (i.e. not hedging the option, or permitting the spot order to undo with no stop). I put since they now stand drawdowns that were limited to the stage that I managed to recover into a high water mark within a short quantity of time.

Would you say that you have been complete rewarding with this plan for the last ten weeks?


Thanks,

Frank

Originally Posted by ;

,

Thanks for sharing your trades and how things are moving. I am considering to give a go to this. But, I am curious if things go against you personally how you're hedging this. As it means your strike cost, can you just purchase the?

Or do you pay it with a FOTM all - vertical credit spread?

Or do you just market, and hope/monitor closely?



Thanks,

Frank

If things go against me, as they did AUD/JPY last week, I pay the entire option position with a place position. If performed order becomes active at the same time to prevent infinite losses on 19, A set. I typically place the S/L far enough away that the odds of a whipsaw (ie. Moving back towards strike) taking you out is very low. When it did whipsaw (and hit the stop), I'd repeat the very same steps. As an alternative, I might purchase an OTM put/call (less costly, but then you can not collect swap depending on the set).

I must've been residing in a time warp or something! I had said that I have demoed to going. According to my saved e-mails in Yahoo, I have been demo trading this egy because Aug 2006 (around the same moment I opened the MB Trading accounts). So experience is all about 10 months! Time flies.

Additionally, with the hedge orders set up, I still hope/monitor closely! LOL

Ragingbull94mtx,

Thank you for sharing your trades and how things are moving. I am considering to provide this a try. However, I am curious when things go against you how you are hedging this. As it approaches your strike cost, can you purchase the underlying?

Or do you cover it with a FOTM all - vertical credit spread?

Or do you simply sell, and hope/monitor closely?



Thanks,

Frank