Unbelievable returns?
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If you are seriously asking Ron, the options positions I write around the equities in the account, or revenue puts that don't have an equity position, average about 1.4% per expiration as the positions will have a Delta the -15 or lower. Merger plays are even higher but have a much higher delta, no big surprise. Like X*X one might consider a $5 strike as the deal is for $5.50 a share. If I'm trying to acquire the stock I'll write them with a Delta in th -35 area. More often than not it takes several expirations before we get the stock and the credits from the puts are greater than the movement in the equity. I'll use that same technique and a stop when exiting equity position unless it's gone vertical like O*O We just sold it outright and wrote another put hoping to buy it back at 25 - the credit received. If it's a stock that's well above basis like X*Z for example getting into it with a $20 put. NOW I've written a spread around it with a stop above the put strike. That is a truly neutral position. Don't care where it goes in any case we win. (Tickers have been changed to protect the innocent.)Hundreds of positions? So what 200 positions to get to 50% ? .25% gain a position ?
Hey Gaddock,
Hey thanks for sharing your successful techniques, hopefully your “paying it forward” karma is filling up!
but did you say you never purchase options at all? Mainly writing? And when writing options, is it rarely naked or mostly as a hedge against an equity position? You mentioned a revenue option is that just selling naked puts.
And so you are effectively writing options at a stocks support and resistance level? Or in this market selling puts as the dollar collapses and covering dollar bounce.
hehehe my comment just completely killed this discussion…
I’ll remember to make sure future posts are witty, non pc and have some bite…
I'm glad you are able to find some of this info useful. Never say never, when I do it's almost always as a hedge in a spread or revcon. Many times I'll sell naked puts but they must meet several conditions and a probability of 85% or better. And yes the criteria does include stocks support and resistance levels and where the dollar is. I like to have 5 confirmations of the same outcome before pulling the trigger. I filter tens of thousands of positions to find one I'll take a position in.Hey Gaddock,
Hey thanks for sharing your successful techniques, hopefully your “paying it forward” karma is filling up!
but did you say you never purchase options at all? Mainly writing? And when writing options, is it rarely naked or mostly as a hedge against an equity position? You mentioned a revenue option is that just selling naked puts.
And so you are effectively writing options at a stocks support and resistance level? Or in this market selling puts as the dollar collapses and covering dollar bounce.
Sounded like a good post to me, unless I'm missing something.hehehe my comment just completely killed this discussion…
I’ll remember to make sure future posts are witty, non pc and have some bite…
[quote=Gaddock]Ever make returns that are large enough that you’re no longer comfortable telling a new client what to expect?
Had a meeting with an endowment committee today. They tore the trades and account apart in pieces, every single trade every single penny. They actually understand what I'm doing to my amazement. I told them anything less than full boat transactional fees, in a very heavily traded and large account, were not economically feasible for me for the time and effort expended as I had originally offered 1.5%. They were like bauble heads ok ok no prob. It's nice to feel appreciated. True story, swear to the big guy. GOD I LOVE THIS BUSINESS!!!!!!!![/quote] I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.Another expiration with several hundred positions expiring. A few were acquisition positions the others expired. Only one actual loss. Bought it back just out of the money for a few hundred down.
All in all HUGE month again.OK here it is …
2009 average returns in the account that I activly manage. (drum roll t t t t tt t tttt ttt t t ttttt tttttttt tttt ttttt ) Get ready for BigKahuna to flip out and scream lies lies lies he he he. 60%+ with a .57 Beta. Da da da DAAAAAAAAAAA Du du du du DAAA DAAA DUHHHHH du du du. I'll post my expiration stats tomorrow. It's the biggest month I've had yet BUT I've not yet heard the closing bell.Expiration day …
243 positions expired out of the money and two planned acquisitions. The largest month I've had yet.