June 10, 2013 at 4:03 pm

Avatar of amagnifico
Trader
Joined: Jun. 3, 2013 Posts: 13

Hi,

I’m sort of a newbie to some of these trading strategies, and I’d love other ppl’s take on them.

Is anyone else out there looking to trade for monthly income? And if so, have they had more success with selling naked puts or with doing stuff like credit spreads? On the one hand, naked puts seem simpler as far as what to do, and more room to turn a profit…with credit spreads, you cap your upside but have less risk.

A lot to think about even before you get into the crazy stuff like iron condors, haha

June 22, 2013 at 2:20 pm

Avatar of buzz339
Trader
Joined: Jun. 22, 2013 Posts: 9

I do like the idea of selling puts for monthly income. I have started this strategy just recently and am scaling into SSO july puts as the market falls. I chose SSO because there is no individual company risk (this is a double-leverage ETF based on the SP500). Even though it is a double-leverage ETF, it has very small slippage (most others have a large slippage due to rebalancing fees). So far I have sold 6 puts at an average cost of 74.2, and an average income of $130 per put. I plan to sell 9 puts for july expiration for a total income of $1170. If SSO is below any of my put prices at expiration, I will acquire the shares of those and sell calls against them for similar income amount in august, while the ones that expire worthless I will sell puts in august to replace them.

Of course if the market crashes I will be down huge on this(2x the market). However because it is the SP500 it will eventually recover someday. In the meantime I will just sell covered calls to collect monthly income.

Tell me what you think of this strategy, and if you have any suggestions to improve it.

Buzz339

June 25, 2013 at 11:32 am

Avatar of amagnifico
Trader
Joined: Jun. 3, 2013 Posts: 13

Interesting! Yeah I like the idea of selling puts against S&P 500 too, it does seem less risky than selling them against a particular company — and the risk is one thing that’d probably hold me back from a naked puts trade.

But like you say, if the shares get put to you, you can always sell calls against them. Have you had better luck with that — or with just looking to close out the shares themselves for a quick profit?

July 10, 2013 at 12:22 am

Avatar of tradetiger
Trader
Joined: Jul. 9, 2013 Posts: 1

“Hi,

I’m sort of a newbie to some of these trading strategies, and I’d love other ppl’s take on them.

Is anyone else out there looking to trade for monthly income? And if so, have they had more success with selling naked puts or with doing stuff like credit spreads? On the one hand, naked puts seem simpler as far as what to do, and more room to turn a profit…with credit spreads, you cap your upside but have less risk.

A lot to think about even before you get into the crazy stuff like iron condors, haha”

You should be selling puts or do credit spreads when implied volatility is high and do debit spreads when IV is low.

July 10, 2013 at 9:58 am

Avatar of moderatorval
Forum_Admin
Joined: May. 30, 2013 Posts: 54
“Hi,

I’m sort of a newbie to some of these trading strategies, and I’d love other ppl’s take on them.

Is anyone else out there looking to trade for monthly income? And if so, have they had more success with selling naked puts or with doing stuff like credit spreads? On the one hand, naked puts seem simpler as far as what to do, and more room to turn a profit…with credit spreads, you cap your upside but have less risk.

A lot to think about even before you get into the crazy stuff like iron condors, haha”

You should be selling puts or do credit spreads when implied volatility is high and do debit spreads when IV is low.”

TradeTiger, for some of our less experienced traders, what’s the way you determine implied volatility?

“Everyone must choose two pains: The pain of discipline, or the pain of regret.” Jim Rohn

You must be logged in to reply to this topic.

Back to Top