Geoff, re: what's the risk , selling puts
I managed to sell Sept 40 puts at 1 1/4 about
12-13 days ago.
The "risk" worse case, is that you get to buy
MO at 38 3/4. BUT ! I am a buyer, so I wanted the
stock at 38 3/4 or will settle for the puts premium
so...the worse case "risk" in my case was a purchase
MO at s$38 3/4 .
If you mean "risk" as a function of probability,
in that! case, I made a "qualitative" judgement of
the "quantitative" picture of a prob. density function with
respect to the 30 day expectation of MO (i.e. I expected
39-45)
It seemed? to favor selling puts at a premium of 1 1/4.
hmmmmm. btw, when I spent my time on the floor trading
options...we did not think this way...I did not trade
based on probability density functions.
I traded and the others do likewise, although few will
admit it, variations of estimates of "front running".
In and out, 1/8 pt. every 10 minutes, X 100. !!!
hmmmm. also btw, since I left the options pits ,
considering what I know, what I saw, what I expect,
I do not recommend to my associates trading options
at all(just because, I know the "cheat" factor.
Hey, SEC , CFTC, are you monitoring this thread...
just kidding !?!
ok.
dk |
