Comments on: Know your Options when Selling Options http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/ Investing in Stocks Through Options Fri, 27 Jan 2012 21:33:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Options Strategery http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1918 Options Strategery Mon, 28 Jan 2008 17:58:16 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1918 That makes a lot of sense. I was confusing a stock specific strategy with a generic strategy. I agree that AA (and other commodity companies) are going to suffer if we see a deceleration in demand. That makes a lot of sense. I was confusing a stock specific strategy with a generic strategy. I agree that AA (and other commodity companies) are going to suffer if we see a deceleration in demand.

]]> By: Alex Fotopoulos http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1912 Alex Fotopoulos Mon, 28 Jan 2008 11:49:50 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1912 The short answer is that I needed to preserve capital. I think AA will be fine, eventually. What I don't know is when. Once support broke and the markets were overall very bearish, I didn't want to fight the masses. This was the right option in my mind to stop the bleeding in the short term. If we actually go into a recession, AA could suffer longer. The short answer is that I needed to preserve capital. I think AA will be fine, eventually. What I don’t know is when. Once support broke and the markets were overall very bearish, I didn’t want to fight the masses. This was the right option in my mind to stop the bleeding in the short term. If we actually go into a recession, AA could suffer longer.

]]> By: Options Strategery http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1911 Options Strategery Mon, 28 Jan 2008 08:25:50 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1911 Alex, I am curious why you would change your mind so quickly? If you originally thought a stock was good and went positive delta, why not just double up on the delta on the way down (i.e. Why not just sell more puts at lower strikes?) I guess maybe I am too much fundamental and not enough technical... Alex, I am curious why you would change your mind so quickly? If you originally thought a stock was good and went positive delta, why not just double up on the delta on the way down (i.e. Why not just sell more puts at lower strikes?) I guess maybe I am too much fundamental and not enough technical…

]]> By: Alex Fotopoulos http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1887 Alex Fotopoulos Sat, 26 Jan 2008 20:36:54 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1887 Thanks Zach - I'll continue to update my progress with this one. You are exactly right, I cannot overstate the importance of understanding the damage a breakout of my predicted range can do if I let it get too far. Mule - good point, nothing wrong with cutting losses early.  Had I not been sleeping at the wheel I should have done that a few weeks ago. Thanks Zach – I’ll continue to update my progress with this one. You are exactly right, I cannot overstate the importance of understanding the damage a breakout of my predicted range can do if I let it get too far.

Mule – good point, nothing wrong with cutting losses early.  Had I not been sleeping at the wheel I should have done that a few weeks ago.

]]> By: Zach http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1882 Zach Sat, 26 Jan 2008 15:43:15 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1882 This is a great way to make money in volatile markets but it is so important to be disciplined on how you protect your risks. Theoretically, you could end up selling more and more contracts on different swings and be in trouble if the stock actually breaks out of its range and develops a strong directional move. That is where being a professional and understanding how each piece of the complex trade behave helps you. You must be able to react quickly and decisively to offset your risk. I appreciate you sharing the details of this trade. I'm sure its very helpful for someone interested in options to see the different scenarios that can ensue. Good luck with AA, ZDS This is a great way to make money in volatile markets but it is so important to be disciplined on how you protect your risks. Theoretically, you could end up selling more and more contracts on different swings and be in trouble if the stock actually breaks out of its range and develops a strong directional move. That is where being a professional and understanding how each piece of the complex trade behave helps you. You must be able to react quickly and decisively to offset your risk.

I appreciate you sharing the details of this trade. I’m sure its very helpful for someone interested in options to see the different scenarios that can ensue.

Good luck with AA,
ZDS

]]> By: mule65 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1881 mule65 Sat, 26 Jan 2008 15:32:21 +0000 http://mytradersjournal.com/stock-options/2008/01/26/know-your-options-when-selling-options/#comment-1881 Wow, that's pretty complicated and time consuming. Be sure plan for the worst since that's what usually happens when the underlying gets volatile and unpredictable. I'm thinking about using break-even stops when my picks are wrong. I'd rather get out cheap and quick than getting stuck in a big long loss. Good luck! Wow, that’s pretty complicated and time consuming. Be sure plan for the worst since that’s what usually happens when the underlying gets volatile and unpredictable. I’m thinking about using break-even stops when my picks are wrong. I’d rather get out cheap and quick than getting stuck in a big long loss. Good luck!

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