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Here is an excellent financial Blog with active Stocks and Options Trading - help me to understand


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I recieve since some Weeks a free financial Newsletter, where the Publisher will send you any Update to your Mailbox,

once a new Transaction is made

my Problems are, that English ist not my native Language - and I have never traded Options before - so I am unsure,

what exactly does all this mean and how to trade the same Way

Can someone help me out ?

http://coveredwriter.blogspot.de/

I attach a screenshot, so you might become even more interested to have a look on this Blog

post-42531-0-14914600-1391941079_thumb.p

Edited by MaaTini
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Selling naked puts and calls is very risky business. The trades on the three stocks were very lucky because the stocks stayed within a narrow trading range so the option seller was able to profit. Take it from me as one who has seen naked options go very, very wrong that such trading is the way to lose a lot of money. You only need one trade to go badly wrong once to more than wipe out all of the profit from successful trades. Also, these puts and calls were traded in a short amount of time. Most successful trades will play out over a time period of months or years and spreads are much safer trades than naked options. Instead of selling a naked put, a cautious trader who is negative on a stock should be taking out a bear put spread which can make money but put much less capital at risk. It is best to study up on options and practice with "paper trades" before you start doing the real thing.

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Selling naked puts and calls is very risky business. The trades on the three stocks were very lucky because the stocks stayed within a narrow trading range so the option seller was able to profit. Take it from me as one who has seen naked options go very, very wrong that such trading is the way to lose a lot of money. You only need one trade to go badly wrong once to more than wipe out all of the profit from successful trades. Also, these puts and calls were traded in a short amount of time. Most successful trades will play out over a time period of months or years and spreads are much safer trades than naked options. Instead of selling a naked put, a cautious trader who is negative on a stock should be taking out a bear put spread which can make money but put much less capital at risk. It is best to study up on options and practice with "paper trades" before you start doing the real thing.

Only the more experienced trader should be selling calls and puts. Effectively you are selling insurance for the premium and hoping that there will not be a claim against you that is in excess of that premium. Initially you should confine yourself to buying puts to cover your gains in holding actual physical stock.

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