90% of options expire worthlessly is a statistic

not you or me.

>>>>for the 2nd wavve of DNDN, DNDN was $24 before it crashes. If you write uncover put with strike price of $20, you will get killed and will probably never recover.

No individual should write uncover options. The power of option is for either protection or leverage.
When DNDN is 24, is the market on DNDN in a horror? Theoretically, you should sell puts on DNDN when it drop to 5 or 7, but at that time, most of people are predicting it will go to $1. I would probably not selling puts on DNDN since it does not have real rev. I do sold puts on ency, 20 Jan 2009 2.5 puts for premium of 1.1, because ency does have EU, Australlia market.

>>>>>It is usually the big funds who write options like hedge fund, mutual fund, brokers, MM etc. They have the gut to write options because they have their own ways to hedge the risks and they have the money power to write in case things go wrong. big funds would not write one or two options, they probably write thousands, in that scale, it is the same ratio for them as one or two option for me as a small investors. There is no big difference between them and me money wise.

>>>bid/ask is usually 0.05 or 0.10 in spread. one needs to pick up options with adequit volume and OI.
I do options only on the stocks I am following and familiar, I do small growth stocks, the spread is usually greater than 0.1 for small stocks. I actually prefer illiquid markets, I do not need volume, most of puts I sold I do not intend to buy back, I do not need volume, I would let it expire. For an illiquid markets, there is usually less pro there, because water is too shallow for the big fish, I will have high chance to be a more knowledged people there. Sometimes, I can see my asking price and quantities listed there for a long time, I have a strange feeling like I am the market maker. Anyway, I am a lot different from common wisdom of stock trading world. It maybe a good thing for me.

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• 回复：90% of options expire worthlessly is a statistic -ForeverGreen- ♂ (401 bytes) () 06/04/2007 postreply 23:07:03

• thanks for clarifying the situation. -longtermInvestor- ♂ (193 bytes) () 06/04/2007 postreply 23:29:47