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Poor performance, eh ?
Try backtesting this period: Nov 1998 -> June 2000
You could have practically picked <any> stock symbol or index and applied
that strat with great success.
> -----Original Message-----
> From: cwest [mailto:cwest@xxxxxxxxxxxx]
> Sent: Thursday, October 24, 2002 9:16 PM
> To: 'Trading_Systems'; omega-list@xxxxxxxxxx
> Subject: RE: options terminology questions
>
>
> Thanks to everyone who confirmed that a short Put can be
> considered the same
> as a synthetic covered call. My post was to check terminology as
> someone who
> is way into options was "arguing" that they're not the same.
> Arithmetically
> they can be slightly different in respect to the same stock or
> underlying as
> Farid pointed out.
>
> Some people who responded denigrated short PUTs as "poor performers."
> Although I didn't seek that kind of advice or response I believe
> it's worth
> noting for those who may have or accepted such an impression, that short
> PUTs imo are a more efficient strategy than a covered call,
> particularly as
> the extrinsic component of the premium disappears considerably one strike
> otm.
>
>
> -----Original Message-----
> From: Leslie Walko [mailto:l.walko@xxxxxxxxxxx]
> Sent: Thursday, October 24, 2002 6:08 PM
> To: cwest
> Cc: 'Trading_Systems'; omega-list@xxxxxxxxxx
> Subject: Re: options terminology questions
>
> Colin:
> The usual terminology of option traders for a short put is "Naked
> put".
> You need level 3 option approval to write one.
>
> Leslie
>
> p.s. There are plenty of clowns who promote this strategy.
> In a study done by Value Line Option Survey, this worked pretty
> good
> until about 1990. Average annual return on equity was close to
> 10%.
> Since then, it has been a reliable money LOOSER.
> Beware of 'free advice'.
>
>
> cwest wrote:
> >
> > Given that a synthetic long stock is a long call and a short put (at the
> > same strike), and a covered call is long a stock and short a call, is it
> > a misnomer to say that a short put is a synthetic covered call?
> >
> > Thanks in advance
> > Colin West
>
> --
> Regards,
> Leslie Walko
> 610-688-2442
> --
> "Life is a tragedy for those who feel, a comedy for those who
> think"
> Horace Walpole, 4th earl of Orford, in a letter dated about 1770
>
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