Shorting options
I trade options, but have never sold to open (short) an option. My question is this; is selling to open an option the same thing as writing an option and after I write/short/sell to open an option can I buy to close any time I want to or am I required to hold the short until expiration. It is my experience that options lose value faster than it gains so this would be a better method than buying the option. Here is a prime ex I bought some SPY very near ITM puts at the market high around 835 on the ES for 2.5 and sold them at 3.22. A nice profit but The same calls went from 2.9 all the way down to .90 cent a net profit of 2$ or over 60%.
So my question is can I buy to open any time I want, if so that is the way to go. The only downside is that you can get slammed hard if the market crashes or rises hard and you are on the wrong side.
So my question is can I buy to open any time I want, if so that is the way to go. The only downside is that you can get slammed hard if the market crashes or rises hard and you are on the wrong side.
I am no option expert, but yes you can and should re-purchase your Option that you Wrote ("write") if it moves in your favour and the value of your "write" declines significantly. Close it out when you have earned 75% of the premium received.
Also - you can and should protect yourself by purchasing an OTM Put which will gain value if the market crashes and your "write" goes quickly against you. Also - this has the advantage of reducing the margin required to hold your position.
Also - you can and should protect yourself by purchasing an OTM Put which will gain value if the market crashes and your "write" goes quickly against you. Also - this has the advantage of reducing the margin required to hold your position.
Emini Day Trading /
Daily Notes /
Forecast /
Economic Events /
Search /
Terms and Conditions /
Disclaimer /
Books /
Online Books /
Site Map /
Contact /
Privacy Policy /
Links /
About /
Day Trading Forum /
Investment Calculators /
Pivot Point Calculator /
Market Profile Generator /
Fibonacci Calculator /
Mailing List /
Advertise Here /
Articles /
Financial Terms /
Brokers /
Software /
Holidays /
Stock Split Calendar /
Mortgage Calculator /
Donate
Copyright © 2004-2023, MyPivots. All rights reserved.
Copyright © 2004-2023, MyPivots. All rights reserved.