Welcome to the page that discusses Put Options

I want to start this blog by telling you that I have no 1-800 number, I am not trying to sell you any newsletter with the next great stock idea. I am not inviting you to come to my house and view a cleaning agent. I will not try to sell you plastic bowls or any other ‘can’t miss’ ideas. I do not have any life changing secrets and I cannot promise you a flat stomach.



I am going to share with you my daily option moves and the reasons behind them. My way of trading options are of course not the only way to utilize Put Options. This is a way that I have found to be simple and easy and not as complicated as some make this business. My hope is that you can develop a steady stream of income and continue to enjoy your life.











Friday, October 22, 2010

Some thoughts on Option evaluations

If you are new to options trading you will bump up against some terms that might mystify you. Below are some of these terms. If you find them useful, more power to you. I find them useless! If you have read my book you already know my thoughts regarding most of these, but for people new to my way of trading, please put up with my rant...
There are Delta's for an options
There are Greeks
There is 'implied volatility'
Put to Call ratio
Black-Scholes Model
There are probably many other methods of evaluating the potential return and possibility of success. Besides my book (of course) any option trader should have McMillan's book 'Options as a strategic investment'
But for me,I have lost all faith in the predictive value of any of the normal option valuation tools. Resistance levels, up-side or down-side. You constantly hear "oh xxx broke resistance etc..Then it wasn't very resistant... The Greeks and the Romans can still fight over Troy but don't tell you squat about the next day or week. I know many traders swear by them (many swear at them) As a broker told me years ago when I asked for the delta of an options "Why in the world would you want or care about that" 10 years later and Hundreds of thousands of trades and I still don't have an answer. I can see the reasons for some of the spreads that people set up. There is comfort and some good ideas behind the protection of a good spread. But (to me and you don't need to justify your reasons) the ideas of all of these things that traders throw into the equations just make it harder than it is. When I say an outlandish thing such as I try to average 3% a month, I see post that 'it isn't about returns etc" Excuse me, I am doing this for the returns!
But we all do it different and that is the beauty of Options, I just thank God that there are guys on the other side of my trades.
I hope readers enjoy my simple way of trading these options.
Ps; I shot a great score in golf today! Now that is important.

1 comment:

Ying said...

very well written. I studied those greeks and I still don't understand why would I care about them!

Your simple way of selling option is enlightening. Thanks.