Do you mean to say that you are selling naked straddles on the SPX?
Pardon the bluntness, but if that is the case you must be absolutely
mad. For $66 you are in what is for all practical purposes an unlimited
risk trade. A lot of money has been lost by folks selling naked options
on indexes like the SPX. You are essentially acting as an insurance
carrier for the market. One big move could wipe you out completely.
Christopher Smith
TheOptionClub.com
--- In OptionClub@yahoogroups.com, "paul7313" <paul7313@...> wrote:
>
> first off the index was spx. I sold a call and a put at 1120 for $66.
expire in feb 2010.
>
> Since the index is moving, is it better to buy back the position
before expiration or let it expire on its own? What is the cutoff
before I must worry?
>
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