LD Lossdog Research
strategy

naked puts

4 matching records.

Trade idea

Trade idea Naked Puts

The speaker suggests that selling naked puts can yield a 20% annual return in a bull market, provided the market continues to perform well. They emphasize the importance of maintaining a consistent approach and not changing the size or strategy. The speaker also notes that while spreads can be used, naked puts are preferred due to their simplicity and the ability to know the break-even point. However, the speaker acknowledges that larger positions may be needed for spreads to achieve similar returns.

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StrategyNaked Puts
Time horizonLong-term, with periodic adjustments
Entry / triggerMarket continues to treat the trader well and remains in a bull market
Target / exit20% annual return
Invalidation / stopMarket downturn or failure to maintain bull market conditions
SpeakerTom
Risks
  • Market downturn
  • Failure to maintain bull market conditions
  • Potential for large losses if the market moves against the position
naked puts
medium confidenceVerify in video at 31:00 ↗
Trade idea

ES naked puts

The trade idea involves using naked puts on the ES index, with the expectation of a significant down day followed by a snap back. The strategy is to close the trade at 25% of the position, with the entry condition being the occurrence of a large down day. The trade is based on the historical performance of similar trades and the expectation of a market rebound.

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Strategynaked puts
Assetindex
Expiration45 to 60 days out
Time horizon45 to 60 days
Entry / triggerWatch for a big down day and a snap back
Target / exitClose the trade at 25%
Invalidation / stopMarket conditions that invalidate the trade premise
SpeakerNick Batista
Structure / legs
  • naked puts on ES
Risks
  • Market volatility
  • Failure to predict the down day and snap back
  • Liquidity issues
longindexlongnaked putsES
medium confidenceVerify in video at 1:12:43 ↗
Trade idea

Trade idea naked puts

The speaker suggests that selling naked puts has been a profitable strategy over the past 18 years, offering better returns than passive longs. This strategy is described as 'no pain, huge returns' and is compared to covered calls, which are less capital-efficient. The effectiveness of this strategy is attributed to the market environment where short-lived down moves are followed by snapback rallies.

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Strategynaked puts
Time horizonLong-term, with periodic adjustments
Entry / triggerMarket environment with short-lived down moves and snapback rallies
Target / exitProfit from premium collected and potential price increases
Invalidation / stopIf the market environment changes significantly, the strategy may not work as well
SpeakerSpeaker
Risks
  • Market environment changes could reduce effectiveness
  • Potential for large losses if the market moves significantly against the position
naked puts
high confidenceVerify in video at 46:23 ↗