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#473 - Options Trading Golden Rule #5: Net Option Seller: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about options trading golden rule number five which is that I believe you have to be a net option seller. There's no doubt...

#473 - Options Trading Golden Rule #5: Net Option Seller: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about options trading golden rule number five which is that I believe you have to be a net option seller. There's no doubt...

A partire dalThe "Daily Call" From Option Alpha


#473 - Options Trading Golden Rule #5: Net Option Seller: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about options trading golden rule number five which is that I believe you have to be a net option seller. There's no doubt...

A partire dalThe "Daily Call" From Option Alpha

valutazioni:
Lunghezza:
3 minuti
Pubblicato:
Jan 8, 2019
Formato:
Episodio podcast

Descrizione

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about options trading golden rule number five which is that I believe you have to be a net option seller. There's no doubt that we have the most comprehensive research and database on option selling strategies and option buying strategies. In fact, when we released our profit matrix research which was arguably the most in-depth analysis of different option strategies, different variations and settings, tickers and industries, what we found is that most of the time when you are using an option selling strategy over an option buying strategy, you end up generating more money long-term. Now, this isn’t to say that option buying strategies can’t work in a vacuum. They could work in a particular month or a particular market event and I see people all the time touting these 75%, 50%, 100% returns as the baseline scenario for what you should do, but I highly doubt that they’re actually achieving those results on a compounded basis, meaning they might have a really good month or they might have a really quarter or year, but it's highly unlikely that they're actually going to hit those numbers year after year, month after month because at some point, compounding wise, you’d basically own the world. You would be as big as some countries or as big as some corporations just from these option buying strategies and they never work out long-term. What we do see is that option selling premium and becoming more of an insurance type company in this business by selling premium and collecting the volatility edge that’s embedded in option prices ends up being more successful long-term. Does this mean that you should only use option selling strategies? By no means, no. There are definitely times where you could use an option buying strategy to potentially take advantage of a market situation or a drop in implied volatility or a big move in an underlying stock, but what you should do is you should focus on net option selling as the core basis of your portfolio. This means that most of your capital, most of your cash should be allocated towards option selling strategies and option selling strategies where you are a net seller of options as part of your positions. Hopefully this helps out. As always, if you guys have any questions, let me know and until next time, happy trading.
Pubblicato:
Jan 8, 2019
Formato:
Episodio podcast