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It is very profitable to sell PUTS in the green dots. You don't need to wait for 1 month to lose 50% of the value. In my case my record is in 4 days. I hope this link will help you in the future
The last price was 1.70. 1.70 divided by .25 (tick value) times $12.50 = $85 premium to the seller minus fees and commissions? (assume we could sell at the last price)
I've got to be doing something wrong because that seems incredible.
Obviously someone who hasn't been active in the stock market for a long period.
A 10% drop is perfectly possible for so many trading weeks.
Please calculate how many succesful months you have to make to recover from one losing month.
I don't say you should not make this trade. But i shiver when i hear words like "incredible" and "steady income". It suggests that you were not in the market in 2008 or 2001. Those who were, would never use that kind of words, because history told them a very valuable lesson.
Hi,
I try to develop further as far as possible safe put selling on ES (behind a IM cushion, low delta etc.) and establish some rulles or parametrs (without any predictions - that remain for other guys).
It's clear that no one strategy give you a 100% safety and there isn't any Holy grail. By being in the market you take the risk and try to manage it.
1. September and October 2008: largest drop in 30 days = 379.75 points
(worldwide mortage and credit crisis, bank collapse etc.) - best solution: avoid to sell puts (we were previously aware of that).
2. August 2011: largest drop in 30 days = 231.25 points
(debt crisis in Europe, USA government bailout, Standard&Poor's downgraded America's credit reiting) - best solution: avoid to sell puts (we were previously aware of that).
3. October 2014: largest drop in 30 days = 157.75 points - what the reasons? or just normal market correction? Could we know before? Any ideas?
Please read the whole thread before you come in here making comments like this.
We have risk controls in place to limit losses.
The only word he used that would be inaccurate is "steady". The income from this trading style is not steady monthly. It is up and down. But on a yearly basis you could say steady.
There was no way to predict the Oct 14 drop. No red flag like the other drops. If you stay with IMx3 and a lower delta then the max drawdown is not catastrophic. Each person needs to decide what max drawdown they are comfortable with and trade accordingly.