News for hackers. Stuff that matters.

A comment on Offline Algorithms in Low-Frequency Trading. Parent comment

Re:Offline Algorithms in Low-Frequency Trading by im3w1l on Saturday January 30, 2021 @09:53AM (#25969530)
Selling a deep in the money put behaves like owning the stock (probably with margin, but it depends on how many puts you are selling compared to your reserves of cash and short term "safe" bonds) except that you are capping your gains.

The further towards out of the money you go the more it behaves like picking up pennies in front of a steamroller. But an interesting quirk of selling puts compared to calls is that the downside is limited. The stock can't go below 0.

[ Parent | on HN ]
Re:Offline Algorithms in Low-Frequency Trading by hntrader on Saturday January 30, 2021 @01:49PM (#25971754)
That gives me a good intuitive picture. I'd really love a basic online simulator where I can plug in portfolio characteristics (eg percent of calls Vs puts, ATM Vs OTM) and simulate an equity curve over the last ten years. I could build my own of course but I think a tool like this would be generally useful for investors.
[ Parent | on HN ]