Considering the emphasis on short puts, could you shed some light on the conditions under which this strategy might underperform? Specifically, how do significant market downturns or increased volatility impact the performance of short puts when compared to other strategies like short strangles or jade lizards?
Short puts will underperform when the market is strengthening. Although the positive drift is favorable for a put, not much premium is built in the price. Therefore, we sell puts when the market is coming downward because velocity to the downside is faster and IV percentile increases. The market usually bounces after a sharp move down, that is when we take profits. Compared to other net selling strategies, short puts are easier to adjust and roll rather than having risk on both sides such as short strangles and jade lizard. I prefer short puts as my go to strategy.
LOL! Or maybe like the very first Star Wars film back in 1977, it was actually like releasing Episode 8 first in the actual sequence of Star Wars chapters? @@thonatim5321 Or if you know the cult 1960s TV classic "The Prisoner" with Patrick McGoohan: The overseer of the mysterious prison village McGoohan is trapped in introduces himself as Number 2, but whenever the Prisoner asks who is Number 1, the response is evasive "THAT would be telling." Then the Prisoner is told he is Number 6, followed by his outrage declaring: "I'm not a number. I'm a free man." Followed by Number 2 cynically laughing. You can find it on TH-cam.
one thing that i think of regarding selling puts is the fact that if the buyer puts the stock to me versus selliing calls, is that the strike price of the otm put vs the otm call is much less. there could be a difference of thousands of dollars.
Considering the emphasis on short puts, could you shed some light on the conditions under which this strategy might underperform? Specifically, how do significant market downturns or increased volatility impact the performance of short puts when compared to other strategies like short strangles or jade lizards?
Short puts will underperform when the market is strengthening. Although the positive drift is favorable for a put, not much premium is built in the price. Therefore, we sell puts when the market is coming downward because velocity to the downside is faster and IV percentile increases. The market usually bounces after a sharp move down, that is when we take profits.
Compared to other net selling strategies, short puts are easier to adjust and roll rather than having risk on both sides such as short strangles and jade lizard. I prefer short puts as my go to strategy.
What happened to Part 1?
It was short.
LOL! Or maybe like the very first Star Wars film back in 1977, it was actually like releasing Episode 8 first in the actual sequence of Star Wars chapters?
@@thonatim5321
Or if you know the cult 1960s TV classic "The Prisoner" with Patrick McGoohan: The overseer of the mysterious prison village McGoohan is trapped in introduces himself as Number 2, but whenever the Prisoner asks who is Number 1, the response is evasive "THAT would be telling." Then the Prisoner is told he is Number 6, followed by his outrage declaring: "I'm not a number. I'm a free man." Followed by Number 2 cynically laughing. You can find it on TH-cam.
one thing that i think of regarding selling puts is the fact that if the buyer puts the stock to me versus selliing calls, is that the strike price of the otm put vs the otm call is much less. there could be a difference of thousands of dollars.
What happened to Dr Jim? One too many Tom jokes?
I don't see Jim selling many short puts on tasty trade. Am i missing something?
7:01 short strangle
Really good video, thanks.