Superb as usual Brent, great read. As an options novice I assume you are selling the same about in puts as you are short the cash position and the view being that if it moves down in an orderly fashion as you expect then you are benefiting from the time decay in the puts?
I may well be missing something but why not just use a put spread? This removes the need for a stop loss & gives the trader more breathing room should they be short too early assuming they can handle 100% loss of the premium paid for the put spread. Cheers
Probably not a trade that's going to work!
But that is ok... you expect a decent percentage of unprofitable trades.
Re-reading this article after the SPX has breached 4200 is interestingggggggg! Thanks for the post.
Superb as usual Brent, great read. As an options novice I assume you are selling the same about in puts as you are short the cash position and the view being that if it moves down in an orderly fashion as you expect then you are benefiting from the time decay in the puts?
I may well be missing something but why not just use a put spread? This removes the need for a stop loss & gives the trader more breathing room should they be short too early assuming they can handle 100% loss of the premium paid for the put spread. Cheers