Well,,
Love a civilized argument as well,
my only disagreement with your scenario about being called out is you say if you get called away and have to buy back, all you will have is a loss on the option and a possible loss on the stock if it goes down after you rebuy.
However, it is impossible to lose money selling an option. sure you lose the spread and you lose the commission, but you collect the premium, and once it's collected, it's your's forever, unless you decide to buy back the option at a loss. and the only reason you would do this is to avoid being called out of the stock. which I personally wouldnt do if the option strike was out of the money anyway, because I would have the option premium in my pocket plus the profit on the stock.
I do agree with your point about the typical online investor not wanting to try this at home..hehehhe if you will excuse the humor.. I just read on another thread, or perhaps it was this one, can't keep them all straight, that 95% of online investors either underperfom the market or lose money. So there is not much that the typical online investor would be advised to do besides buy index funds and pray..LOL..
The naked straddles thing sounds interesting. Please send pics so I can see if my girlfriend would be into this.
rok |
