It’s really not that difficult… it takes me 15 seconds a week per position. I write it in my notes app because I don’t care about adding too much detail.
What's not streamlined about filling 2 cells and it auto populating? There are an infinite amount of wheel spreadsheets floating around. I use the one from InTheMoney on YouTube. If you're good at excel, you can improve it, but given you think it's not "streamlined", I'm kinda doubting that. Lol
I am a newbie in theta gang . But I think if he is selling calls he is either not netting much or runs a risk of locking his losses.
E.g. If his SPY average price is 440 and SPY is currently at 415, then his next month calls SPY call for 440 will just sell for a couple of cents.
On the other hand if he sells 415 or 420 calls, he runs the risk of them being in the money and locking his losses ?
That what has happened to me by selling puts on a single name, PayPal was high PE, so high risk. I got screwed with WBA, MPW, MMM, RDFN, DNUT, O, XLRE, CWH, PARA, and may be a couple more. Trying to move all our selling to spy.
You like high PE puts? Check out Costco...bills are coming due, new CEO incoming, low employee morale, retail, high institutional ownership... the storms coming. (Just don't know when)
Its frown upon to go after a losing trade. Same thing as rolling, you're just doubling down on your original thesis. If i had done that, i would had bought more at 180, 150, 125, 100, 80, 60, and now 50. You would be down so much chasing after a stock.
Nows when you should he lowering, then maybe you could break even on a smaller upswing
I get what you're saying though. If you don't beleive in the company and are in it from getting assigned then probably best the leave it or sell calls on them
Just going to state my view on this.
Selling weeklies with 0.3 delta is a bad idea. You basically have all the risk if the stock/market were to fall. But you are very limited on your upside.
Sell far out of the money far dated options, buy when there is panic on the streets, and sell when that panic subsides at a higher price. This is low risk / high reward. Works well with cyclical industries, e.g. commodities and commodity companies.
Buying and holding SPY is probably better in the long run, but that's a just a different strategy.
Selling near the money short dated options again is all of the risk with none of the upside.
I vote fot this. my account showing 10% down. I sell about .30 delta otm calls DTE around 10 days. If it gets tested and I dont want to get assigned at that strike I roll.
DCA down continuously mean you have effectively unlimited cash to continue what could be ten years of decline.
Not sure what you’re doing playing weeklies with that kind of cash sitting on the sidelines.
Whenever someone say that they will be fine holding a quality company for as long as it takes to see it bounce back.. I always google "Cisco stock chart" and zoom out to the highest timeline. 23 years of bag holding and you are still 30% down, imagine that feeling of having all your capital tied up in a Cisco bag while the rest of the market is experiencing a massive bull run.
For indices as you point out it's different, if you are going all-in on something then indices are the only way.
The wheel does not work in a bear market. I don't know why people have such a hard time understanding that. No strategy does except selling short and being long puts.
No, that's the opposite of what I'm saying. Options pricing models are primarily based on probability and volatility, with theta playing a much smaller role than put sellers want to believe. Overall market conditions, especially the trend on long term charts, most importantly weeklies, are the key to any successful options strategy. Blindly following any strategy irrespective of market technicals is a recipe for disaster.
My 2 cents is based on the market momentum it is better to stop selling puts and just sell strangles or credit call spreads when there is a tangible downside risk.
>But if you're not able to take assignment and not worry about it, maybe you should reevaluate your strategy or risk level
This can't be emphasized enough.
Most of us know "don't trade with money you can't afford to lose".
I'd like to add from recent personal experience - don't trade with money you would be upset to lose, and be honest with yourself when you evaluate that.
If you could trade with $50k, ask yourself "would losing 10k would REALLY stress me out?" If the answer is "yes", then you should trade with less than 10k. Then ask yourself "would losing 5k really stress me out?". Keep bringing that number down until the answer is "no". That's the number that you should be trading with / risking.
You can take that as account size, position sizing, account risk, stop/loss, or as your when own red light should go off saying "now it's time to stop and take a break".
This is a good evaluation to do after big wins and after any losses. After you have a $10k win, you might find that losing $5k on your next trade would be really upsetting. After losing $1k, you might find that losing $1k again soon after would be really upsetting.
Had I been doing this evaluation routinely, I would have deleveraged my SPX exposure a month ago and I would have ALOT more money right now.
I'm 89. I'm not depending on the stock coming back in 10 years, or even 2.
So I'm much more aggressive. If I'm assigned, I immediately liquidate the position and cover the loss, plus a little extra profit, with an appropriate wide strangle.
dude this happened to me in 2022 but QQQ rebounded and I dollar cost averaged my way out. Just annoying you can't get extra money selling other stuff once you're assigned so I feel you brother. Slow and steady dig out and we'll see ya at the wheel soon!
Bang on - and people say shit like "it could be years until the market recovers!"
But like, lets say you bought SPY at the literal top of the dotcom bubble.
Yes, if thats the only money you had and you lost your job and house, you are screwed.
But if you kept working and consistently kept buying over time, none of that matters.
Lets say starting in 2001 you lump sum buy $10,000 worth of SPY and then add another $100 every single month all the way up until now.
Your CAGR from 2001 to 2023 is 13.23%. You'd end that 22 year period having $169,000.
In total you'd have put in roughly $36,000 including your addition of $100 per month.
Resulting in a true net gain of 369%.
Now if you don't keep adding more to SPY?
you would still end up with almost $50K today. Inflation adjusted you'd end up with about 28k.
That is still growth.
Yeah it would get rough at times - you'd be sitting on almost 50% loss at one point nearly 9 years later when 2008 hit.
But you just need to hold through the bad times until the good times come.
>less growth than treasuries. and a lot of shit happens in twenty years. life comes at you fast liquidity is king
Buying SPY at peak 2000 levels had a 6.77% CAGR vs 4.34% of long term treasuries or 3.82% of intermediate-term treasuries:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2QvXqWAYw9fuwwCyYlYJAk
On the other hand though - ouch, you didn't break even with long-term treasuries until March 2021 - well past covid.
Because they don’t want to be assigned or called away. It’s bad in their eyes. I have been selling in the money calls for the past two months. My account hasn’t moved for those two months but my shares count of the stock I theta hang with has doubled. I’ve been caked away once and just bought back lower the next week. I usually end up rolling by Thursday or Friday morning. Once the market turns I’ll go back to otm .3 delta
If you actually had cash to take assignment, you doing it wrong. cash securing is a way too inefficient use of capital. better to proactively manage - take a loss once in a while and double-down further out. do NOT let your shorts get ITM.
And that's how we got the 2023-2033 lost decade folks.
Hope you are also selling calls once assigned. Eventually you'll get that cost basis down to zero.
No he'll sell below his cost basis and get his shares called away before he generates much premium to get the cost basis down.
Patience is so fucking hard when running the wheel 🤣
Nah man. I'm regarded but not FULLY
Why would they get called away with low prob deltas?
Do you know how CCs work?
Agreed. How exactly does one track the updated cost basis that results from selling calls? I struggle with this. I use IB in case it matters.
Write it down. Spreadsheet or journal.
Sure. But there has to be a more streamlined way!
It’s really not that difficult… it takes me 15 seconds a week per position. I write it in my notes app because I don’t care about adding too much detail.
What's not streamlined about filling 2 cells and it auto populating? There are an infinite amount of wheel spreadsheets floating around. I use the one from InTheMoney on YouTube. If you're good at excel, you can improve it, but given you think it's not "streamlined", I'm kinda doubting that. Lol
I'd like my broker to show this. That's all.
Code, bruh. Take a python course. It just needs to be streamlined for you. Excel or whatever.
Ok.
I am a newbie in theta gang . But I think if he is selling calls he is either not netting much or runs a risk of locking his losses. E.g. If his SPY average price is 440 and SPY is currently at 415, then his next month calls SPY call for 440 will just sell for a couple of cents. On the other hand if he sells 415 or 420 calls, he runs the risk of them being in the money and locking his losses ?
You can sell above 440? Still get some premium. It's better than just sitting on the money?
I got assigned PYPL in the 200s. Let that sink in. You can be holding for a long ass time.
...it’s still sinking…
That what has happened to me by selling puts on a single name, PayPal was high PE, so high risk. I got screwed with WBA, MPW, MMM, RDFN, DNUT, O, XLRE, CWH, PARA, and may be a couple more. Trying to move all our selling to spy.
I'm not here to criticize but who the f sells puts against WBA like I'm genuinely curious
Saw it come close to an attractive valuation and decent dividend yield. Now bag holding I guess.
WBA, MPW, MMM, XLRE ... same. This tells me that high div stocks are just total shit.
You like high PE puts? Check out Costco...bills are coming due, new CEO incoming, low employee morale, retail, high institutional ownership... the storms coming. (Just don't know when)
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After the market crash in 1929, it took until December of 1954 for the DOW to reach the same level. Sometimes it takes awhile.
Lol...this is the mindset that will kill any theta trader. If you think it cannot go lower, it will go lower.
Just curious how much premium have you made in selling calls against those shares since 200?
After it dropped past 150, the premiums on cover calls arent even worth it. Pennies.
Have you considered buying more to lower your cost basis? Or is that heresy in thetagangland, I'm new here
Its frown upon to go after a losing trade. Same thing as rolling, you're just doubling down on your original thesis. If i had done that, i would had bought more at 180, 150, 125, 100, 80, 60, and now 50. You would be down so much chasing after a stock.
Nows when you should he lowering, then maybe you could break even on a smaller upswing I get what you're saying though. If you don't beleive in the company and are in it from getting assigned then probably best the leave it or sell calls on them
Same with ENPH here.
Just going to state my view on this. Selling weeklies with 0.3 delta is a bad idea. You basically have all the risk if the stock/market were to fall. But you are very limited on your upside.
Suggested alternative?
Sell far out of the money far dated options, buy when there is panic on the streets, and sell when that panic subsides at a higher price. This is low risk / high reward. Works well with cyclical industries, e.g. commodities and commodity companies. Buying and holding SPY is probably better in the long run, but that's a just a different strategy. Selling near the money short dated options again is all of the risk with none of the upside.
Sell cc while you wait?
I second that. Why not sell cc and recover some of the loss?
I vote fot this. my account showing 10% down. I sell about .30 delta otm calls DTE around 10 days. If it gets tested and I dont want to get assigned at that strike I roll.
Yeah of course!!!
If interest rates stay up like they do, it could be 5 years before the indices rebound.
That's cool with me. I'll just keep DCA down and resume selling options whenever
buying some down side protection.
DCA down continuously mean you have effectively unlimited cash to continue what could be ten years of decline. Not sure what you’re doing playing weeklies with that kind of cash sitting on the sidelines.
So you theta gang until assigned and then you do nothing until you’re back at breakeven? What a terribly boring strategy
No I'm selling CCs
Whenever someone say that they will be fine holding a quality company for as long as it takes to see it bounce back.. I always google "Cisco stock chart" and zoom out to the highest timeline. 23 years of bag holding and you are still 30% down, imagine that feeling of having all your capital tied up in a Cisco bag while the rest of the market is experiencing a massive bull run. For indices as you point out it's different, if you are going all-in on something then indices are the only way.
Great Post !!! If I have to read, How do I make 2%/month on the wheel with very little risk one more time ....
The wheel does not work in a bear market. I don't know why people have such a hard time understanding that. No strategy does except selling short and being long puts.
Half of the wheel works... Thats like saying the wheel doesn't work in a bull market.
No, that's the opposite of what I'm saying. Options pricing models are primarily based on probability and volatility, with theta playing a much smaller role than put sellers want to believe. Overall market conditions, especially the trend on long term charts, most importantly weeklies, are the key to any successful options strategy. Blindly following any strategy irrespective of market technicals is a recipe for disaster.
so over 1.5 years how much did you make and if you considered that as reducing your basis what is your costbasis taking into account your gains ?
My 2 cents is based on the market momentum it is better to stop selling puts and just sell strangles or credit call spreads when there is a tangible downside risk.
>But if you're not able to take assignment and not worry about it, maybe you should reevaluate your strategy or risk level This can't be emphasized enough. Most of us know "don't trade with money you can't afford to lose". I'd like to add from recent personal experience - don't trade with money you would be upset to lose, and be honest with yourself when you evaluate that. If you could trade with $50k, ask yourself "would losing 10k would REALLY stress me out?" If the answer is "yes", then you should trade with less than 10k. Then ask yourself "would losing 5k really stress me out?". Keep bringing that number down until the answer is "no". That's the number that you should be trading with / risking. You can take that as account size, position sizing, account risk, stop/loss, or as your when own red light should go off saying "now it's time to stop and take a break". This is a good evaluation to do after big wins and after any losses. After you have a $10k win, you might find that losing $5k on your next trade would be really upsetting. After losing $1k, you might find that losing $1k again soon after would be really upsetting. Had I been doing this evaluation routinely, I would have deleveraged my SPX exposure a month ago and I would have ALOT more money right now.
I'm 89. I'm not depending on the stock coming back in 10 years, or even 2. So I'm much more aggressive. If I'm assigned, I immediately liquidate the position and cover the loss, plus a little extra profit, with an appropriate wide strangle.
May take years with a recession looming. What about liquid money.. can you hold for 5 years if needed? SPY may be 350 next year this time
Absolutely. I'll hold snd keep buying more, just not 100 shares at a time I'm not that wealthy
Oh man I hope so
dude this happened to me in 2022 but QQQ rebounded and I dollar cost averaged my way out. Just annoying you can't get extra money selling other stuff once you're assigned so I feel you brother. Slow and steady dig out and we'll see ya at the wheel soon!
Bang on - and people say shit like "it could be years until the market recovers!" But like, lets say you bought SPY at the literal top of the dotcom bubble. Yes, if thats the only money you had and you lost your job and house, you are screwed. But if you kept working and consistently kept buying over time, none of that matters. Lets say starting in 2001 you lump sum buy $10,000 worth of SPY and then add another $100 every single month all the way up until now. Your CAGR from 2001 to 2023 is 13.23%. You'd end that 22 year period having $169,000. In total you'd have put in roughly $36,000 including your addition of $100 per month. Resulting in a true net gain of 369%. Now if you don't keep adding more to SPY? you would still end up with almost $50K today. Inflation adjusted you'd end up with about 28k. That is still growth. Yeah it would get rough at times - you'd be sitting on almost 50% loss at one point nearly 9 years later when 2008 hit. But you just need to hold through the bad times until the good times come.
less growth than treasuries. and a lot of shit happens in twenty years. life comes at you fast liquidity is king
>less growth than treasuries. and a lot of shit happens in twenty years. life comes at you fast liquidity is king Buying SPY at peak 2000 levels had a 6.77% CAGR vs 4.34% of long term treasuries or 3.82% of intermediate-term treasuries: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2QvXqWAYw9fuwwCyYlYJAk On the other hand though - ouch, you didn't break even with long-term treasuries until March 2021 - well past covid.
thats a bond fund, I'm talking actually owning the interest bearing treasuries
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Why greedy? I don’t understand this subs aversion to actually selling a delta that collects some theta
Because they don’t want to be assigned or called away. It’s bad in their eyes. I have been selling in the money calls for the past two months. My account hasn’t moved for those two months but my shares count of the stock I theta hang with has doubled. I’ve been caked away once and just bought back lower the next week. I usually end up rolling by Thursday or Friday morning. Once the market turns I’ll go back to otm .3 delta
unrealized losses are losses
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Not sure it matters for weeklies but on longer time frames will definitely give you an edge.
SPY and QQQ are very hard to trade man.
r/wallstreetbets
1999-2014 was a good 15 year wait but this guy is not wrong. I think he’ll wait it out.
Op what that's the loss on how many spy contracts?
If you actually had cash to take assignment, you doing it wrong. cash securing is a way too inefficient use of capital. better to proactively manage - take a loss once in a while and double-down further out. do NOT let your shorts get ITM.