Jun 27 Options Writing Trades Update

Dow plunge to 21-month low & surge in oil price rattles Asia investors. Japan's Nikkei share average was on course for the worst first-half performance since 1995. In the current strangle strategy that I employ (where I sell to both sides of the market i.e calls & puts), the calls premiums are "decaying" nicely. It's the puts that are moving against the portfolio. But for anyone who has ever "rode out" a naked option sale moving against him, the ride can get bumpy at times. Regardless of ones ultimate conviction, and aside from the fact the option is nowhere near going in the money, a continued sharp move in the underlying towards the strike can make one quite uncomfortable, both margin-wise and from a psychological level as one watches the option value rise. Keeping a close tab on the market is in order this period.