Wolf_of_Walmart
Wolf_of_Walmart t1_jdym7dq wrote
What kind of options are you trading? It’s all relative. If you’re strictly buying OTM puts and calls, you’re all but guaranteed to lose money over time.
Wolf_of_Walmart t1_jdrphr5 wrote
Reply to comment by MammothLover21 in All in FRC Roth IRA by sylphvanas
It’s not naked - Roth IRA has to be cash secured
Wolf_of_Walmart t1_jdyt0lf wrote
Reply to comment by Aimadness in What is a sucesssful rate of return for an options trader. by Aimadness
An option can either be in the money (ITM) or out of the money (OTM) which refers to the strike price of the option in relation to the market price of the stock.
Naked refers to writing call options without owning the underlying or writing put options without being cash secured. Selling naked options exposes you to unlimited risk.
If you are buying options, they aren’t naked since your max loss is your premium.
If the options you buy have low premiums, they are likely OTM. Do you pay attention to Delta, Theta, Gamma, and Vega when you look at options? If you aren’t using the Greeks or looking at ITM/OTM, whatever run that you’re currently on is unsustainable.