9 replies to this topic

[denleo]

The majority has a directional bias. Therefore I am neutral. From a contrarian stand point I can not lose. I am in the minority. This board is all about being a contrarian. Here, I solved your problem. Be neutral; it practically guarantees you are going against the opinions of the majority all the time and threfore you are right. Denleo

[ogm]

The majority has a directional bias. Therefore I am neutral. From a contrarian stand point I can not lose. I am in the minority. This board is all about being a contrarian. Here, I solved your problem. Be neutral; it practically guarantees you are going against the opinions of the majority all the time and threfore you are right.

Denleo

Can you make money on that too ?

[dasein]

Can you make money on that too ?

of course, if you are a broker, if you have cheap money....or if you sell options you can hedge, etc.

klh

[Rogerdodger]

Therefore I am neutral.

Very interesting position.
I was just looking at Mark's post below and saw he had a lot of neutral readings.
Sentiment remains fairly neutral except for the ocassional jump, one way or the other.
$VIX is contracting and looks like it should pierce the upper BB soon (tomorrow) then my guess is a reverse.
However brief.
http://stockcharts.com/c-sc/sc?s=$VIX&p=D&yr=0&mn=6&dy=0&i=p12461623064&a=27927380&r=6497.png

[denleo]

Can I make money? I have been selling naked options all my life. Every now and again I have to buy them back with a loss, but most of the time it has been great. And please guys, don't respond to this with Niederhoffer reference or how you read everywhere that it is dangerous. You guys are contrarian, and proud ones. So, when everybody says it is a bad idea, what do you do? You proudly do the opposite. Denleo

[greenie]

I have a friend, who does something similar - selling naked index puts and then hedging with futures. He makes money consistently. Now it is not possible that the market will distribute free money to anybody. So, we analyzed his strategy in mathematical terms. Basically, what he is betting as is that the market will not crash. A smart bet because crashes are extremely rare. However, when you practice it over long time, you may meet a black swan. Ask those bond guys....who ever thought the commercial paper market will freeze within 2 weeks?

[greenie]

but I agree that as long as crowd is worried about what you are doing, it is a winning bet.

[arbman]

About 70% of the options expire worthless, or was it 80%?!?

[OEXCHAOS]

I used to do a lot with options, especially diagonals. It's a very profitable strategy, but when things get funky, you gotta dance some nimble cha-cha. I stopped providing my service back in the late 90's because I figured that we were going to see some nasty, volatile action and that was a great way for amateurs to get really hurt. I can trade out of trouble, but most of the folks who take an options service don't pay close enough attention or don't follow instructions well enough. All in all, naked options writing is for pros and those who live in the market like the pros. Part-timers and rank amateurs (and grail seekers, etc.) need not apply. Mark

[arbman]

Absolutely agree, I don't sell naked options unless it is a dull expiration week and we get a lot of those, I mostly do iron condor type or other limited risk strategies. You can still add 1 or 2% per month to your portfolio. I try to generate the remaining from the long/short directional positions or sell options after a steep sell off or a rally for a few days at least. You can really make a lot of money when the stocks head for a consolidation right after the big move. The options usually get too expensive once the move become obvious, I sell those...