tag:blogger.com,1999:blog-897456774486153841.post7134937464043413419..comments2024-03-25T09:22:22.004-07:00Comments on VIX and More: The Often Overlooked Put Writing StrategyBill Lubyhttp://www.blogger.com/profile/01241003017364820134noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-897456774486153841.post-26630902497727671902009-01-12T11:40:00.000-08:002009-01-12T11:40:00.000-08:00Thanks for the heads up, Bob. I'm sorry I missed ...Thanks for the heads up, Bob. I'm sorry I missed your post, as I have been fighting the flu and just got through the backlog on my feeds a few minutes ago.<BR/><BR/>I wonder why my Active Trader magazine is?<BR/><BR/>Cheers,<BR/><BR/>-BillBill Lubyhttps://www.blogger.com/profile/01241003017364820134noreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-50698899882769715712009-01-12T08:09:00.000-08:002009-01-12T08:09:00.000-08:00Bill, Also note that the lastest Active Trader mag...Bill, <BR/>Also note that the lastest Active Trader magazine (www.activetradermag.com/) has a feature article by Steve Papale on the merits of the Put/write strategy. I also mentioned the topic last week and included a link to the (free e-format) Future and Options Trader magazine: http://www.futuresandoptionstrader.com/downloads/index.php<BR/>where readers can download Pete Stolcers extensive article on the subject.bzbtraderhttps://www.blogger.com/profile/11607843481812042367noreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-41301930908582297082009-01-11T20:47:00.000-08:002009-01-11T20:47:00.000-08:00Anon,"Well" is a subjective determination, but thi...Anon,<BR/><BR/>"Well" is a subjective determination, but this strategy will generally outperform the SPX because the premium for selling options is retained. The puts will lose money at a rate similar to the index, but the income from the put sales will roughly provide the margin by which the put write strategy outperforms the SPX.<BR/><BR/>Cheers,<BR/><BR/>-BillBill Lubyhttps://www.blogger.com/profile/01241003017364820134noreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-68375336175677550922009-01-11T19:15:00.000-08:002009-01-11T19:15:00.000-08:00can someone please explain why this strategy will ...can someone please explain why this strategy will work well in a downtrending market, according to Bill?<BR/><BR/>I am not very experienced with options but thought that volatility normally goes up when the market goes down, plus your directional bet loses money as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-62793132148970644972009-01-09T13:30:00.000-08:002009-01-09T13:30:00.000-08:00I absolutely agree with Mr. Luby. This is the time...I absolutely agree with Mr. Luby. This is the time to sell puts. I have been trading options for 11 years now, and this is the best strategy that intuitively comes to me given the current market outlook. People who say this is a novice options trader strategy...well, lets just leave it to that. <BR/><BR/>Having analyzed data that I have been collecting over my 11 years of options trading, put writing has been a consistent performer (with the exception of last Oct. Swan). Hence, I agree 100% with Mr. Luby.<BR/><BR/>Options trading is mostly about one's market outlook and outlook on individual stock, other than technical understanding of the instrument.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-22213452299047345362009-01-09T12:14:00.000-08:002009-01-09T12:14:00.000-08:00I should've done this in November. I have been Se...I should've done this in November. I have been Selling OTM Covered Calls against the FAS/TNA 3x ETFs. Now I am waiting for another VIX spike to do this again. But I see no reason why anyone who wants to get long in this market does not write puts. I have been seriously considered writing far OTM LEAPS on the next VIX spike. Today, I can get a 20% premium on a JPM Jan 2011 $5 Put. I imagine that would be considerably more if we have another VIX spike. JPM would need to drop over 80% to get there. I would pair this with a black swan, probably buying XLF Puts.Erichttps://www.blogger.com/profile/04630536319901757179noreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-76743778231442651692009-01-09T11:56:00.000-08:002009-01-09T11:56:00.000-08:00I used to be a huge fan of put writing. Now, I en...I used to be a huge fan of put writing. Now, I encourage it as a learning tool for rookie option traders, but gave up selling them for my own account some years ago.<BR/><BR/>To me, writing naked puts is only for investors who want to accumulate stocks over the years.<BR/><BR/>Traders are better served by selling put spreads. I know that significantly cuts profit potential, but to me it's worthwhile because of the big reduction in potential losses.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-897456774486153841.post-39421297197620873672009-01-09T11:37:00.000-08:002009-01-09T11:37:00.000-08:00"Note that while there are currently no ETFs that ..."Note that while there are currently no ETFs that utilize a put write strategy, it is a volatility strategy that is practiced by hedge funds."<BR/><BR/>There is one... ETJ<BR/><BR/>Cheers<BR/>AnthonyAnonymousnoreply@blogger.com