anyone know how to figure this out? Is it sale of proceeds plus 20% of underlying value?
A) go to your broker B) Isn’t this something a naked options seller should know?
NakedPuts Wrote: ------------------------------------------------------- > A) go to your broker > > B) Isn’t this something a naked options seller > should know? Don’t be a fvcking jerk.
Here’s what it is at our firm: Uncovered put: Greater of 30% of CMV of stock or index, minus out-of-the-money amount + premium or 15% of CMV + premium; minimum: if current strike price is less than $50 per share, $1,000 per contract; if current strike price is more than $50 per share, $2,000 per contract. We also have a nice excel calculator that automatically calculates it…
IronMan Wrote: ------------------------------------------------------- > NakedPuts Wrote: > -------------------------------------------------- > ----- > > A) go to your broker > > > > B) Isn’t this something a naked options seller > > should know? > > Don’t be a fvcking jerk. A) It’s different at every time, so that’s a legitimate answer. B) It’s a valid question.
NakedPuts Wrote: ------------------------------------------------------- > IronMan Wrote: > -------------------------------------------------- > ----- > > NakedPuts Wrote: > > > -------------------------------------------------- > > > ----- > > > A) go to your broker > > > > > > B) Isn’t this something a naked options > seller > > > should know? > > > > Don’t be a fvcking jerk. > > A) It’s different at every time, so that’s a > legitimate answer. > > B) It’s a valid question. B) Doesn’t matter as much when you’re only selling 1 contract.
Technically nakedputs is right–is something that you should know… Also, eventhough you’re only selling 1 contract, that initial requirement can vary widely, depending on if you’re selling a GOOG Put, AAPL Put, GE Put, etc…
Hint: it’s a GOOG put.
depends on what type of account. i can sell naked puts in my IRA now, but have to have the cash to buy the stock should it get put to me.
- NAKED EQUITY PUTS INITIAL REQUIREMENT & MINIMUM MAINTENANCE GREATER OF ONE OF THE FOLLOWING: A) PREMIUM PLUS 25% OF MKT VALUE OF UNDERLYING ADJUSTED FOR OUT OF THE MONEY AMOUNT B) PREMIUM PLUS 15% OF STRIKE PRICE OF OPTION NOT ADJUSTED FOR OUT OF THE MONEY AMOUNT FOR NAKED EQUITY PUTS, $25,000 MINIMUM LIQUIDATING EQUITY REQUIRED. At my firm on their retail end… $8k or so to you and net worth $25k to play ball where I’m at. which is actually less than I thought it’d be considering you’d have to put up the initial reg T 50% reqs if it got put to you. good luck to you with this option bud. selling puts these days is scary, and trust me, i know b/c i’ve been getting a lot of stuff put to me lately! i make sure to have the cash in hand to play assuming it’s all going to get put to me.
bannisja Wrote: ------------------------------------------------------- > 1) NAKED EQUITY PUTS INITIAL REQUIREMENT & MINIMUM > MAINTENANCE > GREATER OF ONE OF THE FOLLOWING: > A) PREMIUM PLUS 25% OF MKT VALUE OF UNDERLYING > ADJUSTED FOR OUT OF THE MONEY AMOUNT > B) PREMIUM PLUS 15% OF STRIKE PRICE OF OPTION NOT > ADJUSTED FOR OUT OF THE MONEY AMOUNT > > > FOR NAKED EQUITY PUTS, $25,000 MINIMUM > LIQUIDATING EQUITY REQUIRED. > > > At my firm on their retail end… $8k or so to > you and net worth $25k to play ball where I’m at. > which is actually less than I thought it’d be > considering you’d have to put up the initial reg T > 50% reqs if it got put to you. good luck to you > with this option bud. selling puts these days is > scary, and trust me, i know b/c i’ve been getting > a lot of stuff put to me lately! i make sure to > have the cash in hand to play assuming it’s all > going to get put to me. It won’t get put to me. If Goog hits 300, I’ll just cover it.
You do know that if Goog hits 300 tomorrow, “covering” this option will be wildly expensive?
JoeyDVivre Wrote: ------------------------------------------------------- > You do know that if Goog hits 300 tomorrow, > “covering” this option will be wildly expensive? There is no choice at that point. I’m not gonna let it ride down to 200.
How much would it cost to cover?
Dwight Wrote: ------------------------------------------------------- > How much would it cost to cover? Depends on the implieds and days to expiration when it hits 300.
That’s the question and you can come up with a few models to do it, but a) If Goog moves 45 pts tomorrow, that’s lots of vol and it would be reasonable to expect that implied vol would increase b) The 300 strike would now be at the money which would mean it’s vol should be lower than the current OTM option c) There is no chance b) > a) if this happened tomorrow d) Somewhere around $3500
This is one of the worst trades I’ve ever seen All for the chance to gain $410.00?
Nah. I’ve seen much worse trades. However, this is a lot of capital and a lot of risk for not a lot of return. Anyway, at least he has the balls to trade something. One time about 10 years ago, I was riding my bike all decked in my fancy clothes and this kid about 13 years old comes up on his bike and asks if I want to race to the top of this hill for $1. I said sure and beat him up the hill but wouldn’t take his dollar. On the one hand, that was a really stupid bet. On the other hand, that kid is probably in the Tour now.
JoeyDVivre Wrote: > > One time about 10 years ago, I was riding my bike > all decked in my fancy clothes and this kid about > 13 years old comes up on his bike and asks if I > want to race to the top of this hill for $1. I > said sure and beat him up the hill but wouldn’t > take his dollar. On the one hand, that was a > really stupid bet. On the other hand, that kid is > probably in the Tour now. or maybe he thought “hey this is cool”…expected return of $1 for zero risk. Had a bet with JD’s evil cousin for $10, when he only had $1 and ended up loosing his bike.
Im so confused about all these option stuff. Are these covered in Level 1 material??