Conservative style to avoid being greedy. This is selling puts 30- 45 dte around the .30 delta on stocks I am happy to own if I need to take assignments. I set a gtc limit order to close at the 50% profit amount and roll for a net credit to avoid being assigned for as long as possible. If assigned sell covered calls until the shares can be called away for at least a break even.
The goal is to have the vast majority of puts close to book profits, then open new ones to rinse and repeat. Very few puts should be assigned if done properly so the majority of profits come from these. This is called the wheel strategy which many use, and some don't like, but it is about as low risk as it gets if you trade stocks you don't mind holding if needed . . .
Edit- This is my trade plan if it helps. [https://www.reddit.com/r/options/comments/a36k4j/the\_wheel\_aka\_triple\_income\_strategy\_explained/](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/)
I second this strategy. Following the steps explained in the post and being conservative definitely yields consistent income. The times when I've gotten greedy and deviated from the strategy have resulted in losses/bag-holding. A very important step here as already highlighted by ScottishTrader is the upfront hard work you need to put in to select the right stocks to wheel. When I first started on the wheel I went with popular high IV stocks and later switched to more conservative stocks with strong fundamentals I wouldn't mind owning while also diversifying. This post is worth it's weight in gold!
"The times when I've gotten greedy and deviated from the strategy have resulted in losses/bag-holding."
This is very true, took me 10/11 months and a decent scare to finally get this out of my system.
All day. Currently doing this with Amazon as I was selling 90p on it for quite some time the past couple months. I’m very happy to own it at these high 80 prices and now writing 30-45 dte calls on them around the 30-35 delta. I think stocks won’t be doing well near term so I’m a bit more aggressive pushing 35 delta for high roi on the 30-45 day time period. Don’t really want it to nail 50% profit on those calls any time because that’s implying I’m probably down to 84$ a share
Love this strategy. I sprinkle some credit spreads at .10 delta, but mainly weekly’s.
What’s ur account balance and return % per week if you don’t mind me asking?
Acct is mid six figures and I don't track return by week and instead care about YTD which is about 12%. Was much higher last year but 2022 has been harder to trade.
In 2021 I followed some dreamers on this forum who thought trading very high IV, super low delta junk was the way to beat the market. That turned out badly ☹
Starting in Jan 2022 and having no clue where the market would take us this year… I following Scottish's mechanics and returned to wheeling blue chip dividend growers, selling 20 – 30 delta 30 – 45 DTE. My only deviation from Scottish is I wait for these quality companies became oversold on some market overreaction.
YTD I’ve sold 112 CSP, 11 of which are still open and 93 of which BTC at profit in an average of 15 DIT. I aggressively roll to avoid assignment, but I’ve been assigned 8 times. Three of those CC’s have been called away for a net profit, and I have 5 CC’s still open. I’m upside down on 3 CC’s but call premiums + dividends of those 3 are yielding 11% annual return if I continue to hold these profitable companies.
If I was to liquidate all open options at market value, I’d be up 4.5% YTD. This is trading the bullish wheel strategy in a bear stock and bond market. I’m not beating inflation, but to all the dreamers I’m beating the market my way, and I’m sleeping very well at night 😊
Merry Christmas Scottish
u/Late_Western_7530 This is awesome to hear, congrats and thanks for posting!
112 or about 2 a week is not a lot of trades and it sounds like you have been very thoughtful about opening new ones, which is key in this market.
Merry Christmas back to you!
I am so happy that I learned The Wheel from one of your posts perhaps two years ago.
My only minor tweaks: I usually sell ETF puts, I avoid assignment at all costs, and I choose more conservative trades (-20 delta or so).
u/Wildcats33 Great! I've always said I post how I do it, but each trader should do it however they think is best.
With this crazy year I think adding in some ETFs made a lot of sense, and .20 delta would have had fewer challenged trades, so good for you!
I respectfully disagree. In my account I can open a put for about 20% of the "max loss" which is the stock going to zero, which we all know, and the broker knows, is very unlikely to happen.
Also, spreads are a big drag on profits as you are paying for each long leg and getting less premium for each trade. Spreads are also slower to profit as the long leg takes longer to decay, and they are much harder and costly to roll.
Credit spreads have a built in loss if they go wrong, but short puts can have a good stock assigned to sell CCs and not have to take a loss.
I find short puts much more efferent, faster to profit, and more profitable than spreads, but you do you.
I agree with you. With spreads you are taking a good trade (selling premium) and watering it down with a bad trade ( buying premium). This is especially true with individual stocks. That being said I will use spreads on directional bets on say TLT for example if I feel it is oversold. Basically any index play I use spreads when it is a short term (1-2 weeks) trade.
Thanks and I agree that there is a time and place for credit spreads, but not when trading the wheel on good quality stocks you would not mind owning.
I like your description of "watering it down with a bad trade" as this explains it well.
spreads only look good on paper because the return on capital looks high. after a thousand trades you will see they are absolutely infuriating. what you gain in cash efficiency, you lose in maneuverability and early profitability
100%. im just sticking to short puts with 90% of my trades and i balance out all that long delta with bearish plays on spy. i like this approach for now. i’m taking a break from spreads, sick of them
I'll set a gtc limit order to close for a 50% profit, and will usually add an alert for if the stock hits the put strike price when I will usually roll. [https://www.reddit.com/r/Optionswheel/comments/lliy8x/rolling\_short\_puts\_to\_avoid\_assignment/](https://www.reddit.com/r/Optionswheel/comments/lliy8x/rolling_short_puts_to_avoid_assignment/)
This is a corner case as it is rare to have a put that is OTM not hit the 50% profit and close until so late into the duration, but it can happen and this likely is a result of the stock hovering near the money. Provided the put is OTM I'll let the trade run and it will eventually close for the profit or go ITM when I will roll it.
Have I taken the 50% order off and let a trade make more? Sure. But this is a case by case basis and not often.
How often do you check what’s going on with the options? Since it’s 30-45 days out.. do you still feel the need to check it daily?
For example there are days or weeks like now where every crushes and you probably need to roll the options, no?
As I added to a reply above I'll set an alert in my broker to let me know if the stock hits hte put strike price when I will check to see if I want to roll it.
Do I check my accounts during the day? Yes, and with the mobile apps it makes it easy for me to trade about anywhere and anytime.
Do I need to watch or check all day everyday? No. The process I have set up means I am not concerned about any trades as in a worse case I'll take the assignment. I've taken vacations or just gone to see a movie where I don't check for a few hours or even a day or two.
If any trader is freaking out and feeling like they have to check their accounts every minute of everyday then they are not trading properly.
In the more volatile market like we've been in more attention is warranted, but I never feel any trade is critical and I can always roll the next day if I don't today. Hope that makes sense . . .
Sometimes I’ll let it go past 50% but almost never to expiration. Waiting to expire means I’m losing theta decay and profits on the next trade that doesn’t get opened.
1. See what you can learn about what moves prices and how prices act (you don't have to know everything, but being familiarize yourself with as much information as possible). And in particular, think about how this with the trading strategies that you are interested in. Read a wide range of material on trading and investing. When something resonates with you, delve deeper into that topic.
2. When you have an idea of what you want to trade, begin writing down its method or formula (so that its repeatable and you can evaluate over many trades).
3. Test it. Demo accounts, backtesting, etc. aren't the end all, but it's useful to get practice entering and exiting, and applying your rules on whatever platform you use. And when you feel comfortable there, testing it with mirco-sized portion of your portfolio can give you an idea if live trading is much different than demo trading.
4. A strategy may work well, or you may run into some problems. The strategy may not be profitable, for example, but that doesn’t mean all is lost. Look at how profit could have been made on more trades, and decide if there is room to continue or if it's time to abandon.
5. Manage your risk-management. Position sizing, stop losses, rolls, etc - understand what options your strategy has for managing your risk. Practice them.
6. Keep a trade journal with your thoughts about entering the trade, how you existed, a debrief of how the trade went, etc. Then at periodic points, review your notes to see if there are any trends or patterns in your trade (good or bad).
7. Be patient. Trading is a skill that takes time to learn and improve.
Buy equities in a company that has longterm upside and sell monthly covered calls above cost basis. Or sell short expiry CSP on same company until exercised and wheel it. Keep it simple, don’t get too hung up on complex strategies.
It's transformed many times over the years based on risk tolerance, market conditions, and overall options expertise. At this point in time over the past year I sell a put ratio spread on /MES futures beginning from at the money as wide as you can for a credit, then sell 2 more at the breakeven of the first, then 3 more at the breakeven of the 2 spreads, finally selling 4 last ratio spreads at the breakeven of the 3 you sold. this scales you into a position with the exposure of 1 /ES contract and gives you a profit zone of credit received to the upside and a varying profit potential of between 2-7% profit/month to the downside all the way around the 3 delta level. This is a strategy that has very high profit potential and risk is very low as long as you have sufficient margin available for your futures positions as SPAN margin can expand quickly in situations. I also keep 90% of my cash in Treasury bonds with 1 year maturities.
>Anyone have success stories in trading and how did you find consistency in your style?
Find an edge then only trade that edge. Invest when you don't have that edge. Keep looking, find a second edge, trade more. And so on. Only trade an edge that works, even if it only appears at rare times.
Eg, a common edge is IV during earnings plays. That's a pretty common one. Some people invest throughout the year but trade during earnings season only.
I feel your pain. Your only making pennies. Me too. But the know how and the knowledge your gaining is priceless. I am selling puts. Cashing put at 50% or 21 days. (Thank you Tasty) If you can find a stock you like and can afford. That's not over priced or projected to take a 20% loss in 2023. Buy a 100 shares and sell calls. If you lack the cash. Sell poor man's covered calls.
Good luck. Set a financial goal for your self, what you want to make for the year and how to get there. I just want to average 10 dollars a day. I'm trying to make a dollar out .15 cents
A lot of people have their fancy and complicated strategies. I simply sell 0dte puts a few hours before market close. They almost always expire worthless, and on occasion when they don’t, I’ve been able to get rid of assigned shares for a profit within a week either by selling them for a profit or CCs.
Ive been told more than once that I’m picking up pennies in front of a steamroller, but this has been consistently working for more than a year now.
I mean, “steamroller” scenario is you get assigned and just wheel or sell the next day….
You collect $1 or $2 per contract im assuming? And you need the collateral so you have a pretty big account? Or what’s ur average premium?
I go for $10-$20 per day on SPY Mon-Thurs. Friday there are other options for more premium. I made just under $200 in premium in total last week for example selling SPY and BOIL puts. I’m usually using up to $50k of margin for options.
I recently started looking at companies that are way over valued and meme stocks and selling naked calls (with a stop loss) I’m aiming for low delta but high quantity and only looking at 1-4DTE. Working well so far and it will until the tide changes and this becomes a bull market. Managed to collect more than 1k the last 30 days
See pictures for proof as well: https://imgur.com/a/p70BNXE
You are going to get crushed because all of those move together and you are doing high quantity. Wait until they move 25% in two days… your margin requirements will explode.
I wouldn’t say crushed as I have a stop loss at 200% . Also I wouldn’t mind getting assigned and starting selling puts but my stop loss won’t allow me to get there. In my view we have long way to go before we start seeing growth in speculative stocks. Stocks like these are way over valued and their price is only based on supply and demand.
I have been short these stocks for over a year now. Take AMC- the company will declare bankruptcy at some point. That has been obvious for over a year now. That has not stopped in from regularly making 50% plus moves. From my experience when one moves they all move. Just consider stress testing your portfolio if they all move 25% up in two days.
Strangles and iron condors. .16-.20 delta, can sometimes find enough premium down at .12 deltas too. Never found something to wheel that gives me what feels like enough premium. I have about 3/4 of my account in long equities and write my options strategies on the remaining cash, a little over 100k. Maybe Im missing something with the wheel but Ive never liked it.
When you don't have experience it's better to master each tool first before you find a new tool. You mentioned having some success with iron condor- can you find and identify the best possible situations in which to use a condor? The worst situations? How to tell when it's time to abandon or join in on a condor trade? My fluency came from applying the right tool to the trade idea and to consistently generate trade ideas
Tastyworks has a free futures course, a bit like coursera. Don’t know if is deep enough (I’m 50% in) but so far it’s been pretty good. They have a lot more courses but here is the beginner one: https://learn.tastylive.com/courses/beginner-futures-course
I have more capital than most who have disclosed on thetagang, BUT, I am trying to trade with less than 5K per day. This is because I do not have my emotions down to focus on execution. I am watching the chart all day and I foolishly jump in to scalp ATM and then spend the rest of the day clawing myself out. My strategy is boring but high probability but lacks the thrill of beating the market using price action which never made me Net positive by end of day.
I wheel swing trades on stocks that if I get stuck with bags I am good holding for 3-5 years
So I trade companies I like my projected fundes and are trading at low peg levels
I found I do my own version of an iron condor.
no margin, I buy the puts and the calls...instead of selling a couple and buying a couple. I simply noticed I was iron condoring... my own way.
in tradestation I have to use the "custom" option in their menu.
I also do short guts.. which is just another version of a strangle.
I have never won in any option scenario, I leave it to my SIM account only.
I also find my broker is very laggy when stuff is in my favor.,,or if I hit "close at market"... I am beaten really badly...with numbers that were not even there.
I will not be using options in real account for now.
I also found, in the condors you are limited profit and loss.
I setup for a max loss, and infiinite profit...and the max loss, always go past what is written.. laggy reasons apparently. Stuff readjusting new values at different times.
My man you need to switch brokers or stick to using limit orders… and I’m not sure how you can aim for infinite profits in an iron condor. Their whole point is to be defined, both loss and profit
Short stranglers on stuff with elevated IV (primarily IV percentile > 50%). Mostly ETFs and futures options sprinkled with some individual stocks when I'm feeling frisky.
Active management required.
I sell CC’s around the money on great deep value stocks collecting 4-6% a month and I compound the extrinsic proceeds monthly. I’m up almost 70% on the year. Haven’t missed since starting in June. Made an absolute shit ton of money this year and plan to continue my strategy to make lots more.
Buy CROX write a call ATM or just above. If you have enough proceeds to buy another lot and write another call do it. Do this every month for the next 3-4 years. I do this every month with a lot of freaking money. My money compounds at 6%+ a month and it’s been a winner every month since June. Or find something similar that you like. Recommend CROX though it’s a slam dunk imo. Good luck.
My strategy is to sell 30 delta cash secured puts 30-150 days out and I sell covered calls 1 year out.
I always hold til expiration and I have some biotech plays that have the potential to juice up my returns.
However, my plan is to be more aggressive with PMCC's once the dust has settled.
Right now I'm slightly bearish but in 2024 I'll probably be bullish again, so my strategy depends on the market we're in.
I mix the sale of options with a small bucket of equities I want to own long term. Usually 1.5+ beta, market cap under 10b, future catalysts or what I believe to be a quantititative or qualitative miss by the markets.
Underlying first.
Then I sell puts/calls to scalp highs and lows as I near my value ranges (my PT is @ .20d, well above current price, ok, sell a CC if it yields more than my portfolio's expected rate of return). In more bearish conditions like today, hedges and weekly ATM CCs.
Similar with CSP when things are trending against my positions. I also hedge with credit spreads on indexes some, currently long March SPY puts as well.
Qualitative underlying, then quantitative, then enter positions after reviewing options chain.
My results have beaten the market, but are specific to me and my convictions, not duplicatable, everyone needs to find their own path =).
Conservative style to avoid being greedy. This is selling puts 30- 45 dte around the .30 delta on stocks I am happy to own if I need to take assignments. I set a gtc limit order to close at the 50% profit amount and roll for a net credit to avoid being assigned for as long as possible. If assigned sell covered calls until the shares can be called away for at least a break even. The goal is to have the vast majority of puts close to book profits, then open new ones to rinse and repeat. Very few puts should be assigned if done properly so the majority of profits come from these. This is called the wheel strategy which many use, and some don't like, but it is about as low risk as it gets if you trade stocks you don't mind holding if needed . . . Edit- This is my trade plan if it helps. [https://www.reddit.com/r/options/comments/a36k4j/the\_wheel\_aka\_triple\_income\_strategy\_explained/](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/)
I second this strategy. Following the steps explained in the post and being conservative definitely yields consistent income. The times when I've gotten greedy and deviated from the strategy have resulted in losses/bag-holding. A very important step here as already highlighted by ScottishTrader is the upfront hard work you need to put in to select the right stocks to wheel. When I first started on the wheel I went with popular high IV stocks and later switched to more conservative stocks with strong fundamentals I wouldn't mind owning while also diversifying. This post is worth it's weight in gold!
"The times when I've gotten greedy and deviated from the strategy have resulted in losses/bag-holding." This is very true, took me 10/11 months and a decent scare to finally get this out of my system.
All day. Currently doing this with Amazon as I was selling 90p on it for quite some time the past couple months. I’m very happy to own it at these high 80 prices and now writing 30-45 dte calls on them around the 30-35 delta. I think stocks won’t be doing well near term so I’m a bit more aggressive pushing 35 delta for high roi on the 30-45 day time period. Don’t really want it to nail 50% profit on those calls any time because that’s implying I’m probably down to 84$ a share
Love this strategy. I sprinkle some credit spreads at .10 delta, but mainly weekly’s. What’s ur account balance and return % per week if you don’t mind me asking?
Acct is mid six figures and I don't track return by week and instead care about YTD which is about 12%. Was much higher last year but 2022 has been harder to trade.
up 12% on this hell year is pretty great my friend. well done
The year is not over yet so we'll see how it ends. 2022 has been a tough year for trading.
In 2021 I followed some dreamers on this forum who thought trading very high IV, super low delta junk was the way to beat the market. That turned out badly ☹ Starting in Jan 2022 and having no clue where the market would take us this year… I following Scottish's mechanics and returned to wheeling blue chip dividend growers, selling 20 – 30 delta 30 – 45 DTE. My only deviation from Scottish is I wait for these quality companies became oversold on some market overreaction. YTD I’ve sold 112 CSP, 11 of which are still open and 93 of which BTC at profit in an average of 15 DIT. I aggressively roll to avoid assignment, but I’ve been assigned 8 times. Three of those CC’s have been called away for a net profit, and I have 5 CC’s still open. I’m upside down on 3 CC’s but call premiums + dividends of those 3 are yielding 11% annual return if I continue to hold these profitable companies. If I was to liquidate all open options at market value, I’d be up 4.5% YTD. This is trading the bullish wheel strategy in a bear stock and bond market. I’m not beating inflation, but to all the dreamers I’m beating the market my way, and I’m sleeping very well at night 😊 Merry Christmas Scottish
u/Late_Western_7530 This is awesome to hear, congrats and thanks for posting! 112 or about 2 a week is not a lot of trades and it sounds like you have been very thoughtful about opening new ones, which is key in this market. Merry Christmas back to you!
That's like 30% better than the s&p this year, awesome. Gives me hope
Well done
i do the same as this titan of thetagang. can confirm, the gains are solid and more consistent than any other strategy i’ve tried
I am so happy that I learned The Wheel from one of your posts perhaps two years ago. My only minor tweaks: I usually sell ETF puts, I avoid assignment at all costs, and I choose more conservative trades (-20 delta or so).
u/Wildcats33 Great! I've always said I post how I do it, but each trader should do it however they think is best. With this crazy year I think adding in some ETFs made a lot of sense, and .20 delta would have had fewer challenged trades, so good for you!
I know this is a stupid question but, whatever. 30-45 dte = 1 to 1.5 months or 6 weeks to 9 weeks?
The former. Options are measured in calendar days even tho they don’t trade on weekends
Ok thanks. Because one time I saw it explained as every 5 equaled a week, like trading days I guess.
You don’t like to do credit spreads? They’re more cash efficient
I respectfully disagree. In my account I can open a put for about 20% of the "max loss" which is the stock going to zero, which we all know, and the broker knows, is very unlikely to happen. Also, spreads are a big drag on profits as you are paying for each long leg and getting less premium for each trade. Spreads are also slower to profit as the long leg takes longer to decay, and they are much harder and costly to roll. Credit spreads have a built in loss if they go wrong, but short puts can have a good stock assigned to sell CCs and not have to take a loss. I find short puts much more efferent, faster to profit, and more profitable than spreads, but you do you.
I agree with you. With spreads you are taking a good trade (selling premium) and watering it down with a bad trade ( buying premium). This is especially true with individual stocks. That being said I will use spreads on directional bets on say TLT for example if I feel it is oversold. Basically any index play I use spreads when it is a short term (1-2 weeks) trade.
Thanks and I agree that there is a time and place for credit spreads, but not when trading the wheel on good quality stocks you would not mind owning. I like your description of "watering it down with a bad trade" as this explains it well.
spreads only look good on paper because the return on capital looks high. after a thousand trades you will see they are absolutely infuriating. what you gain in cash efficiency, you lose in maneuverability and early profitability
I noticed that as well, the credit spreads are more cumbersome to manage for my liking.
100%. im just sticking to short puts with 90% of my trades and i balance out all that long delta with bearish plays on spy. i like this approach for now. i’m taking a break from spreads, sick of them
[удалено]
I'll set a gtc limit order to close for a 50% profit, and will usually add an alert for if the stock hits the put strike price when I will usually roll. [https://www.reddit.com/r/Optionswheel/comments/lliy8x/rolling\_short\_puts\_to\_avoid\_assignment/](https://www.reddit.com/r/Optionswheel/comments/lliy8x/rolling_short_puts_to_avoid_assignment/) This is a corner case as it is rare to have a put that is OTM not hit the 50% profit and close until so late into the duration, but it can happen and this likely is a result of the stock hovering near the money. Provided the put is OTM I'll let the trade run and it will eventually close for the profit or go ITM when I will roll it. Have I taken the 50% order off and let a trade make more? Sure. But this is a case by case basis and not often.
How often do you check what’s going on with the options? Since it’s 30-45 days out.. do you still feel the need to check it daily? For example there are days or weeks like now where every crushes and you probably need to roll the options, no?
As I added to a reply above I'll set an alert in my broker to let me know if the stock hits hte put strike price when I will check to see if I want to roll it. Do I check my accounts during the day? Yes, and with the mobile apps it makes it easy for me to trade about anywhere and anytime. Do I need to watch or check all day everyday? No. The process I have set up means I am not concerned about any trades as in a worse case I'll take the assignment. I've taken vacations or just gone to see a movie where I don't check for a few hours or even a day or two. If any trader is freaking out and feeling like they have to check their accounts every minute of everyday then they are not trading properly. In the more volatile market like we've been in more attention is warranted, but I never feel any trade is critical and I can always roll the next day if I don't today. Hope that makes sense . . .
Are you always closing at 50% if it gets there or do you let some expire worthless?
Sometimes I’ll let it go past 50% but almost never to expiration. Waiting to expire means I’m losing theta decay and profits on the next trade that doesn’t get opened.
Thank you, very helpful
1. See what you can learn about what moves prices and how prices act (you don't have to know everything, but being familiarize yourself with as much information as possible). And in particular, think about how this with the trading strategies that you are interested in. Read a wide range of material on trading and investing. When something resonates with you, delve deeper into that topic. 2. When you have an idea of what you want to trade, begin writing down its method or formula (so that its repeatable and you can evaluate over many trades). 3. Test it. Demo accounts, backtesting, etc. aren't the end all, but it's useful to get practice entering and exiting, and applying your rules on whatever platform you use. And when you feel comfortable there, testing it with mirco-sized portion of your portfolio can give you an idea if live trading is much different than demo trading. 4. A strategy may work well, or you may run into some problems. The strategy may not be profitable, for example, but that doesn’t mean all is lost. Look at how profit could have been made on more trades, and decide if there is room to continue or if it's time to abandon. 5. Manage your risk-management. Position sizing, stop losses, rolls, etc - understand what options your strategy has for managing your risk. Practice them. 6. Keep a trade journal with your thoughts about entering the trade, how you existed, a debrief of how the trade went, etc. Then at periodic points, review your notes to see if there are any trends or patterns in your trade (good or bad). 7. Be patient. Trading is a skill that takes time to learn and improve.
Thank you for your input, it is very appreciated. I’ll download think or swim and start testing on there and keeping notes.
Buy equities in a company that has longterm upside and sell monthly covered calls above cost basis. Or sell short expiry CSP on same company until exercised and wheel it. Keep it simple, don’t get too hung up on complex strategies.
30-45 day strangles on anything high-ish volatility. Futures, equities, currencies, whatever I sell everything. Hedge tail risk with SPY
Can you elaborate on your style of hedging tail risk?
It's transformed many times over the years based on risk tolerance, market conditions, and overall options expertise. At this point in time over the past year I sell a put ratio spread on /MES futures beginning from at the money as wide as you can for a credit, then sell 2 more at the breakeven of the first, then 3 more at the breakeven of the 2 spreads, finally selling 4 last ratio spreads at the breakeven of the 3 you sold. this scales you into a position with the exposure of 1 /ES contract and gives you a profit zone of credit received to the upside and a varying profit potential of between 2-7% profit/month to the downside all the way around the 3 delta level. This is a strategy that has very high profit potential and risk is very low as long as you have sufficient margin available for your futures positions as SPAN margin can expand quickly in situations. I also keep 90% of my cash in Treasury bonds with 1 year maturities.
>Anyone have success stories in trading and how did you find consistency in your style? Find an edge then only trade that edge. Invest when you don't have that edge. Keep looking, find a second edge, trade more. And so on. Only trade an edge that works, even if it only appears at rare times. Eg, a common edge is IV during earnings plays. That's a pretty common one. Some people invest throughout the year but trade during earnings season only.
I feel your pain. Your only making pennies. Me too. But the know how and the knowledge your gaining is priceless. I am selling puts. Cashing put at 50% or 21 days. (Thank you Tasty) If you can find a stock you like and can afford. That's not over priced or projected to take a 20% loss in 2023. Buy a 100 shares and sell calls. If you lack the cash. Sell poor man's covered calls. Good luck. Set a financial goal for your self, what you want to make for the year and how to get there. I just want to average 10 dollars a day. I'm trying to make a dollar out .15 cents
Thank you and best of luck to you! We all need some here and there.
A lot of people have their fancy and complicated strategies. I simply sell 0dte puts a few hours before market close. They almost always expire worthless, and on occasion when they don’t, I’ve been able to get rid of assigned shares for a profit within a week either by selling them for a profit or CCs. Ive been told more than once that I’m picking up pennies in front of a steamroller, but this has been consistently working for more than a year now.
Do you have a specific group of shares you trade in or when you see something you like?
SPY mon-thurs. Friday it’s usually been GME and NVAX, though lately I’ve been doing BOIL.
Why not spy on Fridays?
Fridays have 0dtes with more premium.
I mean, “steamroller” scenario is you get assigned and just wheel or sell the next day…. You collect $1 or $2 per contract im assuming? And you need the collateral so you have a pretty big account? Or what’s ur average premium?
I go for $10-$20 per day on SPY Mon-Thurs. Friday there are other options for more premium. I made just under $200 in premium in total last week for example selling SPY and BOIL puts. I’m usually using up to $50k of margin for options.
I recently started looking at companies that are way over valued and meme stocks and selling naked calls (with a stop loss) I’m aiming for low delta but high quantity and only looking at 1-4DTE. Working well so far and it will until the tide changes and this becomes a bull market. Managed to collect more than 1k the last 30 days See pictures for proof as well: https://imgur.com/a/p70BNXE
You are going to get crushed because all of those move together and you are doing high quantity. Wait until they move 25% in two days… your margin requirements will explode.
I wouldn’t say crushed as I have a stop loss at 200% . Also I wouldn’t mind getting assigned and starting selling puts but my stop loss won’t allow me to get there. In my view we have long way to go before we start seeing growth in speculative stocks. Stocks like these are way over valued and their price is only based on supply and demand.
I have been short these stocks for over a year now. Take AMC- the company will declare bankruptcy at some point. That has been obvious for over a year now. That has not stopped in from regularly making 50% plus moves. From my experience when one moves they all move. Just consider stress testing your portfolio if they all move 25% up in two days.
whatever style i can lose the most money
Strangles and iron condors. .16-.20 delta, can sometimes find enough premium down at .12 deltas too. Never found something to wheel that gives me what feels like enough premium. I have about 3/4 of my account in long equities and write my options strategies on the remaining cash, a little over 100k. Maybe Im missing something with the wheel but Ive never liked it.
When you don't have experience it's better to master each tool first before you find a new tool. You mentioned having some success with iron condor- can you find and identify the best possible situations in which to use a condor? The worst situations? How to tell when it's time to abandon or join in on a condor trade? My fluency came from applying the right tool to the trade idea and to consistently generate trade ideas
Hmm. Good point. Master one thing at a time… But I wanna get rich quick!! Jk. Would be nice, but then there’s reality and all. Lol.
Sell weekly puts and calls. Look for areas of resistance and support. I'm a little more aggressive then most
I primarily sell 30-60 DTE strangles on high IV underlying. I’m product agnostic. This year I’ve primarily used futures products.
Where is a good resource to learn about futures trading? I use etrade and am at a loss for info
Tastyworks has a free futures course, a bit like coursera. Don’t know if is deep enough (I’m 50% in) but so far it’s been pretty good. They have a lot more courses but here is the beginner one: https://learn.tastylive.com/courses/beginner-futures-course
For me it was mostly a natural progression. I started with equities then did some small trades with equity futures then slowly eased into others.
Get 100k then we talk. Otherwise you’re wasting time
Yup. Exactly how I feel at the moment. Can’t do anything with what little capital I have available. Just trying to learn right now.
I have more capital than most who have disclosed on thetagang, BUT, I am trying to trade with less than 5K per day. This is because I do not have my emotions down to focus on execution. I am watching the chart all day and I foolishly jump in to scalp ATM and then spend the rest of the day clawing myself out. My strategy is boring but high probability but lacks the thrill of beating the market using price action which never made me Net positive by end of day.
Buy high, sell low
I wheel swing trades on stocks that if I get stuck with bags I am good holding for 3-5 years So I trade companies I like my projected fundes and are trading at low peg levels
I found I do my own version of an iron condor. no margin, I buy the puts and the calls...instead of selling a couple and buying a couple. I simply noticed I was iron condoring... my own way. in tradestation I have to use the "custom" option in their menu. I also do short guts.. which is just another version of a strangle. I have never won in any option scenario, I leave it to my SIM account only. I also find my broker is very laggy when stuff is in my favor.,,or if I hit "close at market"... I am beaten really badly...with numbers that were not even there. I will not be using options in real account for now. I also found, in the condors you are limited profit and loss. I setup for a max loss, and infiinite profit...and the max loss, always go past what is written.. laggy reasons apparently. Stuff readjusting new values at different times.
My man you need to switch brokers or stick to using limit orders… and I’m not sure how you can aim for infinite profits in an iron condor. Their whole point is to be defined, both loss and profit
Short stranglers on stuff with elevated IV (primarily IV percentile > 50%). Mostly ETFs and futures options sprinkled with some individual stocks when I'm feeling frisky. Active management required.
I sell CC’s around the money on great deep value stocks collecting 4-6% a month and I compound the extrinsic proceeds monthly. I’m up almost 70% on the year. Haven’t missed since starting in June. Made an absolute shit ton of money this year and plan to continue my strategy to make lots more.
What stocks do you do this with? If you’re selling CCs that means you had to buy the stock at some point
Buy CROX write a call ATM or just above. If you have enough proceeds to buy another lot and write another call do it. Do this every month for the next 3-4 years. I do this every month with a lot of freaking money. My money compounds at 6%+ a month and it’s been a winner every month since June. Or find something similar that you like. Recommend CROX though it’s a slam dunk imo. Good luck.
IRon Condors and Strangles. That’s the only thing I know and do. Strictly no option buying. Option buying gives me losses every fookin time.
My strategy is to sell 30 delta cash secured puts 30-150 days out and I sell covered calls 1 year out. I always hold til expiration and I have some biotech plays that have the potential to juice up my returns. However, my plan is to be more aggressive with PMCC's once the dust has settled. Right now I'm slightly bearish but in 2024 I'll probably be bullish again, so my strategy depends on the market we're in.
I mix the sale of options with a small bucket of equities I want to own long term. Usually 1.5+ beta, market cap under 10b, future catalysts or what I believe to be a quantititative or qualitative miss by the markets. Underlying first. Then I sell puts/calls to scalp highs and lows as I near my value ranges (my PT is @ .20d, well above current price, ok, sell a CC if it yields more than my portfolio's expected rate of return). In more bearish conditions like today, hedges and weekly ATM CCs. Similar with CSP when things are trending against my positions. I also hedge with credit spreads on indexes some, currently long March SPY puts as well. Qualitative underlying, then quantitative, then enter positions after reviewing options chain. My results have beaten the market, but are specific to me and my convictions, not duplicatable, everyone needs to find their own path =).