I think puts are becoming risky. You are right to be concerned. Writing calls seem to be the safe bet in the short term. I really value your input. Thank you so much.
I'd say we are due for a sharp correction. With the above setup, which has been successful in this period, it has not undergone a sharp sell-off. A sharp sell-off or black swan event would lose a lot of capital if not all of it. I think selling calls spreads out of the money is much safer witha lot less risk. Just my take. But who knows?
It’s not that puts are “bad” and calls are “good” in general — it’s about risk asymmetry given the current context.
When volatility is compressed and markets are extended, downside moves tend to be faster and more disorderly than upside continuation. That makes short puts more vulnerable to gap risk, even if the long-term trend is up.
Short calls, on the other hand, benefit from mean reversion and stalled momentum when upside starts to slow. The edge isn’t directional — it’s structural.
That’s why I’ve been shifting focus toward bearish or neutral verticals recently, while being more selective with short puts.
I think puts are becoming risky. You are right to be concerned. Writing calls seem to be the safe bet in the short term. I really value your input. Thank you so much.
What makes you say this? I’d think just the opposite but, curious to learn what shapes your perspective (I’m new and learning)
I'd say we are due for a sharp correction. With the above setup, which has been successful in this period, it has not undergone a sharp sell-off. A sharp sell-off or black swan event would lose a lot of capital if not all of it. I think selling calls spreads out of the money is much safer witha lot less risk. Just my take. But who knows?
This really resonates with me — you’ve put into words what’s been sitting in the back of my mind as well.
Good question.
It’s not that puts are “bad” and calls are “good” in general — it’s about risk asymmetry given the current context.
When volatility is compressed and markets are extended, downside moves tend to be faster and more disorderly than upside continuation. That makes short puts more vulnerable to gap risk, even if the long-term trend is up.
Short calls, on the other hand, benefit from mean reversion and stalled momentum when upside starts to slow. The edge isn’t directional — it’s structural.
That’s why I’ve been shifting focus toward bearish or neutral verticals recently, while being more selective with short puts.
Great work!
Thanks for sharing the results and feedback