R.O.P. (Return on Premium) is a marker I create myself in order to measure my performance on writing option. The max value is 100% because the premium received on writing option is all the potential profit you can get from the position. That will happen if you let the option expire worthless. Usually I will close my trade earlier than expiration so that I can remove myself from the risk of getting exercise and also use my capital in other trade. The cut off I use is usually 70%. If I can get a ROP of 70% or higher I will close my position.
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congraduation to your harvest.
ReplyDeleteI looked http://www.aastocks.com/TC/stock/DetailChart.aspx?&symbol=00023
and see 23 breakout today. some premium around 32-34 souring up surprisingly . Just on paper, Do u think it is a fit time to make a short call . (bet the chance reverse the trend)
my position not good much ah, 1800 $8.5 , no momentum it seemed. hope the great time value decline.
Thanks thanks ... I had a look on the chart for 1800, it seems it is in a downtrend but it does have support at 8.2-8.3, so if your strike is at 8.5, you might be able to go ok if it continue to consolidate.. just stay tight and see la....and for 23 it is actually in a uptrend... there must be some news causing the breakout... as true for are uptrending stock I think is it better not to do short call..as you really don't know when is the highest...
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