SteadyOptions

@ddavit no the same, but very close. If one has delta of 51 and the second one delta of 50, the calendar delta will be 1, which is very close to delta neutral.

@Finn Ninjaslippers I have nothing against selling premium. However, I have a big issue with his claim that selling premium is the only way to make money in the stock market. And I'm not a big fan of selling premium before earnings. If the stock gaps and doesn't come back, there is absolutely no way to save the trade. Rolling is simply a way to hide losses.

Selling premium on indexes is fine as long as you use a proper position sizing.

As for debunking his studies - this applies mostly to his repetitive claim that buying premium before earnings doesn't work. We are doing it with great success for the last 10 years and prove with live trades that it does work.

Here are couple of articles that debunk his "studies":

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@JayPar With every new comment, you just embarrassing yourself more and more.

Believe what you want to believe.

@Tattoo123 meant to say "The only reason people buy it is because the price is going up". But I suspect you knew what I meant..

@ravikrish Yes definitely a typo. Thanks for reading.

Condolences to his family. You will be missed Eli.

עליו השלום

@Special Situations and Arbs
No, that's the whole point. The number of short puts is LESS than the number of long puts.

Well, this WAS exactly my point..

Where can we see a track record showing 35% return please?

I don't know who is right, but the big difference is that Mr. K provides a full track record, so everyone can see the full history of his calls, good or bad.

Yes, April 9.

He said that June dropped only 10% while May dropped 250%. "the fund has been dumping its massive position and buying June (and now July) contracts." implied that the fund was dumping the May position on Monday, and this is why May dropped 250%. It basically said that one of the reasons why May dropped 250% is because USO was selling its massive position.

This is my interpretation.

The simple truth is it's pretty easy to make money in the stock market. Why? Because the markets go up 8-10% per year on average.

All you need to do is stick around and not to try to time the market. Missing the best 10 days every year will more than halve your long-term returns.

So why so may investors fail?

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I don't trust the numbers coming from China. The real numbers are at least 10 times higher. You don't basically close a billion people country because of few hundred deaths.

The timing of the trade really depends on many factors. Some stocks are suitable to enter 3-4 weeks before earnings. Others only few days. If you buy early, the straddle is actually more expensive most of the time, and you have to fight the negative theta. Of course the stock also has more time to move. it's always a trade off.

We discuss each trade on our forum and find the best time to enter.

TSLA stock price is supported by one thing only: the marketing genius of Elon Mask. And of course those moronic investors who continue believing his lies, quarter after quarter, year after year.

Read Consumer Reports ratings of Tesla cars. Tesla cars are not even in their recommended lists anymore.

This bubble will be no different from all other bubbles.

Disclaimer: I have no position in TSLA stock, but I occasionally trade TSLA options with non directional strategies like calendars - so I don't really care which way the stock goes. But you don't need to be a financial genius to see that TSLA valuation is insane.

@WSLama good to hear from you. Yes I post from time to time, but I also don't spend much time on SA for the same reasons you mentioned.

I agree with you regarding selling puts. In fact, it is well known fact that selling puts outperforms the buy and hold with less volatility in the long term. The key of course is position sizing - you need to sell only the number of puts equal to the number of shares you are willing to hold.

50% per year (and even more can be achieved, BUT:

1. You need a lot of practice, knowledge and experience to get those returns.
2. They are not scalable to multi million dollar accounts.

As for hedge funds - don't automatically assume that they are much smarter than the average investor. Most of them have no idea how to use options the right way. And those who do, often blow their accounts because they apply too much leverage.

And no, there are no free lunches. Doesn't mean you cannot make very good money with options.

Should we feel sorry for the Mr. Cordier? There is no sympathy from Josh Brown, the Reformed Broker:

Some people made me aware of how he was marketing this fund. He called it a retirement strategy. It’s not a retirement strategy, it’s speculation. I don’t feel bad for James Cordier, or his “clients.” Taking in premiums from selling calls – picking up nickels – and having no idea of the potential for a blow-up is the most childish thing I’ve ever heard. No, the laws of risk and reward are not repealed just because someone sounds sophisticated when discussing derivatives. Risk cannot be eliminated, only transformed. This man sold investors a lie. And now he compounds it with a new lie – “a rogue wave came along and capsized us!”

To add insult on injury, it turns out that James Cordier enrolled his clients into managed accounts and not a fund. This was the reason why his clients not only have lost all their money, but that they also owe money to their broker for margin calls.

The media keeps referring to this as a "hedge fund." But that is NOT what it was. It was 290 separately managed accounts, all trading the same strategy. Whereas a hedge fund is an actual "company," typically a limited partnership or limited liability company, that insulates investors from losing more than they invest (unless specifically structured to make investors liable, which is VERY rarely done). The wheels started coming off here. Since these are block accounts, that means EACH client owns their own accounts and is responsible for them. So if he loses MORE than is available in the account, the account owner gets the bill....not the fund "manager."

Read more:
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Well, I can give you one example where backtesting can be very helpful.

When we buy pre earnings straddles, it is very important to buy them at the right time and the right price. IV increase is different for each stock. For some stocks, most of the increase happens 7 days before earnings, for others 14 days. There are patterns that repeat themselves. This is where we find the backtesting to be very useful - to see the price charts leading to earnings in previous cycles, and to compare the timing and the pricing to the current cycle.

This is just one example.

Well, that didn't work very well for FB or NFLX this cycle, did it?

The odds might be in your favor in the long term, but as you mentioned, the risk is still too high.