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沙發
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發表於 2018-12-8 18:12:48
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maximumpossiblesuffering gets it: "One of the keys, which you are adhering to is avoiding the use of leverage. It is hard to blow up an cash only account." I also agree with your other points.
Those who compare my approach to James Coudrier of OptionSellers.com or Karen the SuperTrader are missing the point entirely. They lost everything when they no longer had the capital to cover their positions and were liquidated for margin requirements. In Karen's case, she tried to conceal the disaster with outright fraud. I will never receive a margin call because I set the cash aside to cover the position when I open it.
Karen was using short strangles with unlimited risk potential. Vomma was exponential whenever her position experienced volatility in either direction. I don't do that stuff.
Neither is my approach a martingale strategy. Martingales are exposed to open-ended risk. I am not. Every time I buy a put back for more than I received and sell a new one, I am actually mitigating my loss compared to an outright stock holder, with the possibility of closing at a small loss or even a profit while the stock owner must wait for full recovery.
But yes, I have losses. If MSFT goes to zero tomorrow, I'll lose a lot. But how many dire warnings do you see for stock investors, "it could go to zero and you will lose everything"? It's just a knee-jerk reaction so many people have when the word "option" is brought up. Options were invented to manage risk, and that's what they do if used properly.
I probably do have an irrational bias about going long. I'm just more comfortable receiving my profit up front and then seeing how much of it I can keep, rather than hoping for a large enough move before expiration to counter the eroding time value before I can make a profit. Going long does have a lot more profit potential. It just suits my temperament to hit singles and doubles. I usually struck out when I swung for the fences.
Selling equity options instead of the index helps me diversify. I do have stock-specific risk, but it's spread out over several different stocks. How would I diversify if I had everything in the index? Then I would have index-specific risk. |
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發表於 2018-12-8 17:57:10
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發表於 2018-12-8 18:16:27