Re: Are naked calls/puts insanely +EV? What am I missing here?
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Please. Being naked short calls is no more deadly than selling short the common
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The deadly part comes with the leverage. Sometimes folks may sell a few more than they have the stomach for. Or they get into some sort of ratio position where they are long closer ins and short double the amount of further outs. Take yesterdays fed move for example. If some poor sap had call ratios on and the SPX blew through his ratio he was dead meat. And the ratio type position is very common.
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Yeah, you have to be careful in what you are doing. If you would normally do 1000 shares you shouldn't be doing 30 contracts. But you don't need a hundred million dollars in order to be careful.
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