Wolf_of_Walmart t1_jdym7dq wrote on March 28, 2023 at 3:23 AM

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.

Aimadness OP t1_jdypzdp wrote on March 28, 2023 at 3:57 AM

I think it is called naked call or puts. I purchase other a bunch of calls or outs. Nothing else.

Wolf_of_Walmart t1_jdyt0lf wrote on March 28, 2023 at 4:27 AM

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.

Aimadness OP t1_jdytnmw wrote on March 28, 2023 at 4:33 AM

I do this. I don’t completely understand the language I need to explain it. But I’m understanding itm otm and the implications with the Greeks (somewhat). I will look into this more.