Has anyone else noticed that call/put options aren't moving normal
yes. i have noticed some discrepancy.
specifically, last week, i closed 2 short call positions on oracle. one gave me a reasonable profit, the other one just a profit. as i did that, i opened 1/2 a position selling puts this time (on Orcl as well.)
it proved to be the wrong strategy, as i could have held my short calls and made an even larger profit as i looked at the bid/asks of the same positions a couple of days later.
however... my paper loss in the puts has not been nearly as disastrous as it otherwise could have been. why ?
loss of volatility ? are the m/m expecting an imminent rise in the market sometime soon ? (i.e it is a given a 50 bp rate cut ?) frankly i do not know. but i agree with your observation. in this case, as i am on the sell side, this benefits me not only by the time decay factor... but the apparent loss of volatility (somehow does not make sense though) and yes... although in this instance, it seems that i obtained an unusual high premium at the time of a turn in sentiment, (i am still not sure exactly why )
hence luckily benefited, still, it was the wrong strategy....
where have i heard ... let your profits run.... ? |
