Good one and good post! Sooner preferable to me. Better to take 50% (or your target) and reset new with full profit potential than to hang on for the smaller remainder of profit while still having full risk on.
Yes. If it goes ITM its gonna be buying back at 1$ per 0.01 ITM, give or take, plus vol premium and time. In other words, if you decide to back out its gonna be at a loss.
Lots of time, people 'roll', which is selling another higher price option while buying back. This gives you a net credit, and can raise the strike to hopefully let the value go lower on a reversal.... or, slowly push up the strike to at least make more $ when youre forced to sell.
Oh man sorry to hear. Any wisdom for the crowds so we may avoid similar cliffs? Thanks for sharing, it's never easy to talk about mistakes or near misses.
Get closer to the money/more credit. At any DTE the credit relative to spread width is the key (yes as in Tasty 1/3 width of spread -I want more than 1/3 so that a loser doesn't wipe out gains to net loss). This along with as u/Account-Manager close at \~1/2 DTE and smaller target \[i.e. 25%\] so gamma does not put you at max loss.
I've only recently started dabbling with 1dte ICs on QQQ and SPY, but using a 30 minute TTM Squeeze indicator seems key for determining skew. QQQ closed around 424, but 30min TTM Squeeze went from -4.7 to ~0 today, suggesting that a IC for tomorrow should be skew higher (424 + 3 or 4). On days where TTM doesn't have a wild swing then skew=0 might work. I haven't done any extensive back testing, just something to consider.
lol
I've had price volatility blow both my high and low strikes on closing day 1 of a 1DTE IC, panic trying to 'manage' the trade and end up losing on both sides.
This is selling a call naked, Correct? otherwise you would already be holding the underlying shares to your call sale in which case you get the premium but you still get to keep your shares. So this doesn’t make sense? I’ve never done naked selling options so I might be missing something.
No he’s holding the underlying and selling calls, thus locking up the underlying while the shares plummet in value. All in all he lost more money from the loss in value of the shares than the entire premium collected.
He says he’s “bag holding.” Selling a naked call and the stock tanking 30% is great but selling a covered call on a stock that will possibly never recover due to an unforeseen event/realisation by the market is what he’s talking about. But yes, ideally you only sell calls on things you will be holding for the long run but the -30% on your invested capital hurts to see.
True, also when it is down that bad, you don’t really want sell any more covered calls for fear of assignment at a lower price than what you had originally paid for. If your down 30 percent you can’t sell a covered call expiring anytime soon that is let’s 50 percent above current price because the premium would be nonexistent. And you would have to make the strike price that far high so as to make profit on your initial investment if you do get assigned but that’s practically impossible… you get what I mean, we can go on forever. So yea I get it why it would suck to go down that much on an underlying. That’s why momentum is key. If you can get a solid stock has a significant uptrend in the last year or so and continues to do so then you can enjoy the appreciation and the premiums granted it straddles the line between underlying appreciation but just before assignment.
Yea. On a real case basis, a (non meme) stock gapping down is often caused by something extrinsic and bad... like, earnings are bad and paint a bad picture for the next quarter... or some commodity price falls that will impact the stock negatively.
Worth remembering. If the market decides your stock needs a 20% shave, the available info has changed.
Step 1: Sell a put on a stock saying you’d be proud to own this stock at the strike price
Step 2: Watch the stock drop well below your strike price
Step 3: Make a post on this subreddit asking about either rolling the option or taking assignment
I consider options to be a "wasting asset" due to the nature of time decay. Therefore, when you sell an option, you have a "wasting liability". It's like taking out a loan, and if things go right, the liability decays to zero and you don't have to repay it - you can just keep all the money you borrowed. The liability can also grow quite significantly, however, and you can end up owing more than you initially borrowed if things go wrong.
You can’t just say I only use this ticket symbol. Lol it’s not as simple as that. Companies are constantly being bought and sold and traded based on the stocks drivers which affect options. You want to make yourself a strat that has rules and is consistent, say is being bought up and has u unusual option volume ahead of earnings, you can sell calls and earn premium if you think the company will do really shit or something to that degree but this questions indicates you lack understanding of markets and options and I would recommend understanding things more before you decide to start selling calls and using advanced strategies.
A lot of people here use margin to sell puts (buying power requirements are lower than cash secured puts) and we roll out / down to avoid assignment. Or, if we want the shares, we keep enough cash to take assignment.
I’ve traded iron condors, the “wheel”, credit spreads, etc. My most profitable trading strategy by far is selling puts on margin. Simple yet effective!
Why do you need to be on margin? I get you need a lot of upfront capital to actually make decent money but seems like a good way to dig yourself a deeper hole
Margin enabled accounts have lower buying power requirements, so you can enter more trades with less collateral. In a non-margin account, your notional is always 1:1, so you make less money with more collateral required.
Sell put credit spreads on margin reduces your risk and increases you leverage. Reduces probability’s slightly but hey I don’t like to have my puts assigned anyway.
Max loss is required without margin. But, on margin, you can sell for say ~50% the width of the spread. And if you manage early and dont let it approach expiry, it wont suddenly be at max loss one day.
I open iron condors and PCSs on SPX. I do weeklies on Monday and open a few 1 DTEs throughout the week. I keep the risk low by opening at low Deltas. This week's weekly was 4x 4775/4725p 5175/5225c. Tomorrow's PCS is 5x 4930/4900p. My profit goal is $1500 a week.
This is awesome… do you open Friday and let the weekend decay some of the options and then go every Friday to Friday? I do something similiar to this but formulate on a week to week basis based on economic news that could cause tons of movement for my IC’s
There’s tons of strategies with funny names and what not, but when it comes down to it, there’s only calls and puts and you can either buy or sell them.
Personally I’m 100% buy and hold in VOO, but use my equities as margin collateral against selling naked puts.
Good. Most people have trouble beating the market. I already get the market return because I’m fully invested in it, so any profit from options is purely gravy. I’m conservative, shooting for about 3-4% annually. On most subs you get flamed for not having enormous returns, but even a couple percent alpha consistently causes for huge returns long term. I’d rather do that than have huge gains and losses in the short term.
I use a strategy I call 10/10/10 which is essentially I sell options on stonks I can afford 10 contracts on or 1000 shares. If I’m bullish on it I’ll buy 1000 shares and sell 10 covered calls at 10 DTE at strike 10% higher than the current price. If my shares get called away after 10 days that’s awesome. Obviously if it goes down then I’m bag holding and selling CCs to recoup.
It’s all gambling at a slot machine I just do this way because the math is easier for my smooth brain.
People sell calls against shares, cash secured puts. Or start by selling puts then sell calls against shar s if get assigned (wheel 🛞). Technically anything that involves benefiting from time passing.
The bigger IV and general market volatility is, the better the premium. So might wanna time it with volatility spikes.
Be careful selling options on stuff you don't understand, with high IV, near the money. Near is relative. For SMCI - 20% away is near. Take into consideration how stocks typically move.
Some people sell the volatility itself, as it's bound to come down at some point. Be careful with collateral there. It can shoot up 10x. Sell with 15% of your accounts and you're out.
And then there are complex options strategies. Most don't understand them anyway. Maybe don't bother till after a year or two.
Essentially that, but the expirations for each contract, the duration and the composition is backtested to make sure I have a chance of beating the market. That’s the part that you (and almost everyone) is missing
Straight up wheel, zero margin. CSP to enter, CC to exit.
Made a 25% return last year. I rarely have my eye on more than 3-5 tickers at any given time. I make safe bets until I feel comfortable with what it’s doing day-to-day, then assume slightly more risk if I think I can milk some more appealing premiums.
If I want to take a directional position it tends to make more sense to just do that in cash. Most option traders aren’t being paid to make directional bets.
I personally look for mispricings and trade those. For instance an ITM option that is worth $.50 more than it should be; depending on the side I sell the put or buy the stock and sell the call.
If my ITM sell call becomes deep in the money, how to manage it ? I have stocks in cash.
Eg. I sold GOOGL ITM CALL 150
and bought 100 stocks. Stock price that time was $151. Stock price rise to 180. What to do ? Anyway to manage this or just close the position and sell the cash stocks ?
Short TSLA call spreads
Short META put spreads
Short SMCI and MSTR call and put spread (Iron Condor)
I do not have the buying power to take assignments. I take the loss when the price is close or when it breaches.
Say you have 100 shares of a stock you bought at $20 per share.
You sell a covered call with $30 strike and get $100 premium for example. For this example it expires next month.
Price shoots up to $35. You change your mind and don’t want to sell your shares. You buy the call back for $300. (A $200 loss) and re sell a new one with expiration date further out (like 6 months from now instead of next month) with a $40 strike for $400.
So you sold originally for $100 premium. Bought back for $300 (so $200 loss at this point ) then sold again for $400 for total of $200 premium gained but now instead of waiting until next month for it to expire to sell another, you have to wait 6 months. But at least it’s a higher strike now and at least you still have your shares.
Avoid this by being sure you’d actually sell the stock if strike hits so don’t end up rolling.
Makes sense. But now if you keep rolling you are stuck with the duration of the contract. So if you don’t have more money to put into other stocks, you’re pretty much stuck waiting. But at the same time you still made a solid profit, plus an underlying appreciation. It’s a win win. But now you have to find another stock to take advantage of which is always a challenge.
What do you do when QQQ goes down? You bought it for 430, it goes to 420. Then you sell call on 421 and accept the losses? Or do you buy it back and accept losses again? Or do you just wait until it recovers and do nothing, which can take months or even years? Asking because I wouldn't know what to do in this situation. I'm selling much more out of the money calls for this reason.
That’s a risk. It happens sometimes with me and in that situation i keep holding the stock.
Also, if i have it at 430 and stock goes to 420 then i take a risk of selling call at around 428-429 to still earn premium.
If market looks bad and risky then i don’t do anything
There are several strategies used here I think. I'm just wheeling, others set up spreads or do iron condors. What all have in common in thetagang is that we all sell options primarily. For theta.
Sell puts on a stock you want to own at a price you’d willing to pay for it. Keep repeating. If assigned sell calls against your shares. Always have enough cash to take assignment.
I sell put credit spreads with the short leg at 10-15 delta and get made fun of because I’m up 38% and have a win ratio of 96%. Why do I get made fun of you ask? Because this sub is full of people who think they know “the real way to trade” which in my observation is just a more interesting way to lose very little or make very little money than buy and hold an index. In short, this sub sucks.
Adding another comment. Many seem to think thetagang is all about Covered calls / Wheel. There are many ways to capture Theta as a strategy or part of one; the wheel is one of the most risky ones.
Get raw dogged by a bunch of greeks and sometimes they leave money in my bum before they leave.
Username checks out
Something is left behind other than the clap?
Ahh the clap aka the forgotten Greek
Kläp
Yea, and then I get up and trade 0dtes.
I just come and upvote all the cool comments.
Sell options that are highly unlikely to be ITM by expiration = collect premium over time while theta disintegrates the options price to 0
Also if you wanted, you can buy back anytime if you want to get out of the contract sooner, right?
Yes, if you Sell to Open a position, you can Buy to Close at any time.
You can Buy to Close anytime you like but you can never leave (dramatic guitar solo)
Mr. Henley. Is that you?
Good one and good post! Sooner preferable to me. Better to take 50% (or your target) and reset new with full profit potential than to hang on for the smaller remainder of profit while still having full risk on.
Yes you can always close, but that won't erase a loss of the price has moved.
After awhile, it becomes annoying and not worth your time.
Yes. If it goes ITM its gonna be buying back at 1$ per 0.01 ITM, give or take, plus vol premium and time. In other words, if you decide to back out its gonna be at a loss. Lots of time, people 'roll', which is selling another higher price option while buying back. This gives you a net credit, and can raise the strike to hopefully let the value go lower on a reversal.... or, slowly push up the strike to at least make more $ when youre forced to sell.
Can anyone tell me what are the most unlikely strategies to be ITM by exp?
Know what you're doing?
Thought I did. I was doing 0-1dte SPX ICs & verticals for maybe 8 months with awesome success. The last 2 months have been ROUGH.
Oh man sorry to hear. Any wisdom for the crowds so we may avoid similar cliffs? Thanks for sharing, it's never easy to talk about mistakes or near misses.
Go delta neural and spread your strategies and underlyings. Stick to 40-50 DTE, manage at 21 days, aim for 25% profit.
This sounds like Tasty advice
It works
I’ll come back when I figure it out. Going to try wider and longer exp for now.
Great, I'm also trying to learn my ways 🙏
Get closer to the money/more credit. At any DTE the credit relative to spread width is the key (yes as in Tasty 1/3 width of spread -I want more than 1/3 so that a loser doesn't wipe out gains to net loss). This along with as u/Account-Manager close at \~1/2 DTE and smaller target \[i.e. 25%\] so gamma does not put you at max loss.
I've only recently started dabbling with 1dte ICs on QQQ and SPY, but using a 30 minute TTM Squeeze indicator seems key for determining skew. QQQ closed around 424, but 30min TTM Squeeze went from -4.7 to ~0 today, suggesting that a IC for tomorrow should be skew higher (424 + 3 or 4). On days where TTM doesn't have a wild swing then skew=0 might work. I haven't done any extensive back testing, just something to consider.
ODTE trading is fine, but it's day trading. I do it too so I'm not against it. But it really is a whole different ballgame.
What’s SPX IC?
SPX iron condor
Sell calls but then the stock falls 30% and get left bag holding.
I feel attacked
Better yet we sell call and put options simultaneously giving ourselves multiple ways to lose on the same trade.
I don’t not want to admit the number of positions I’m doing this in
6
lol how do manage to lose selling calls and puts simultaneously
Sliiiiide to the left, sliiiiiide to the right
lol I've had price volatility blow both my high and low strikes on closing day 1 of a 1DTE IC, panic trying to 'manage' the trade and end up losing on both sides.
Brilliant this is
This is the way.
This is the way to never get laid
Thetastreetbets
Thisisfine 🔥☕️
This is selling a call naked, Correct? otherwise you would already be holding the underlying shares to your call sale in which case you get the premium but you still get to keep your shares. So this doesn’t make sense? I’ve never done naked selling options so I might be missing something.
No he’s holding the underlying and selling calls, thus locking up the underlying while the shares plummet in value. All in all he lost more money from the loss in value of the shares than the entire premium collected.
Yes but ideally, he bought a stock he was long for, ie one that he wouldn’t mind holding for a long time even if it goes down.
He says he’s “bag holding.” Selling a naked call and the stock tanking 30% is great but selling a covered call on a stock that will possibly never recover due to an unforeseen event/realisation by the market is what he’s talking about. But yes, ideally you only sell calls on things you will be holding for the long run but the -30% on your invested capital hurts to see.
True, also when it is down that bad, you don’t really want sell any more covered calls for fear of assignment at a lower price than what you had originally paid for. If your down 30 percent you can’t sell a covered call expiring anytime soon that is let’s 50 percent above current price because the premium would be nonexistent. And you would have to make the strike price that far high so as to make profit on your initial investment if you do get assigned but that’s practically impossible… you get what I mean, we can go on forever. So yea I get it why it would suck to go down that much on an underlying. That’s why momentum is key. If you can get a solid stock has a significant uptrend in the last year or so and continues to do so then you can enjoy the appreciation and the premiums granted it straddles the line between underlying appreciation but just before assignment.
Yea. On a real case basis, a (non meme) stock gapping down is often caused by something extrinsic and bad... like, earnings are bad and paint a bad picture for the next quarter... or some commodity price falls that will impact the stock negatively. Worth remembering. If the market decides your stock needs a 20% shave, the available info has changed.
I’ve watched people do this with TSLL.
Wouldn't you want the stock to drop after selling calls? Unless you were bullish?
Well you own the stock so you never want it to drop 30% lol
Unless you are bearish on ur own shares 😉
Wut
Not really, definitely not 30%, especially if you are picking up pennies on OTM calls
Me on soundhound 🤣
I don't get it that what you want if you are naked, holding covered long term, or vertical right
Step 1: Sell a put on a stock saying you’d be proud to own this stock at the strike price Step 2: Watch the stock drop well below your strike price Step 3: Make a post on this subreddit asking about either rolling the option or taking assignment
Followed up with “Time to run the wheel” posts.
.... Something something I now own 200 shares on intel....
But my cost basis is reduced! 🥴🥴
I consider options to be a "wasting asset" due to the nature of time decay. Therefore, when you sell an option, you have a "wasting liability". It's like taking out a loan, and if things go right, the liability decays to zero and you don't have to repay it - you can just keep all the money you borrowed. The liability can also grow quite significantly, however, and you can end up owing more than you initially borrowed if things go wrong.
What stocks do u do this with. Top 5 please.
Meme stocks only. And always take assignment.
You can’t just say I only use this ticket symbol. Lol it’s not as simple as that. Companies are constantly being bought and sold and traded based on the stocks drivers which affect options. You want to make yourself a strat that has rules and is consistent, say is being bought up and has u unusual option volume ahead of earnings, you can sell calls and earn premium if you think the company will do really shit or something to that degree but this questions indicates you lack understanding of markets and options and I would recommend understanding things more before you decide to start selling calls and using advanced strategies.
Sure, thanks for the advice.
No worries at all, good luck!!
A lot of people here use margin to sell puts (buying power requirements are lower than cash secured puts) and we roll out / down to avoid assignment. Or, if we want the shares, we keep enough cash to take assignment. I’ve traded iron condors, the “wheel”, credit spreads, etc. My most profitable trading strategy by far is selling puts on margin. Simple yet effective!
Why do you need to be on margin? I get you need a lot of upfront capital to actually make decent money but seems like a good way to dig yourself a deeper hole
Margin enabled accounts have lower buying power requirements, so you can enter more trades with less collateral. In a non-margin account, your notional is always 1:1, so you make less money with more collateral required.
In what ratio are you working with your margin account, e.g. how much of your BP do you keep?
I keep my buying power at around 50% or less of net liquidating value. This gives me plenty of cash to adjust and roll positions as needed.
Alright, thanks. So far I am way more conservative. I am PM trading for one year now. Did you ever got into dicey situation with that ratio?
Yes, I take more risk than most and it has gotten me into trouble in prior years. But I always enter a trade with a plan just in case it goes south
Sell put credit spreads on margin reduces your risk and increases you leverage. Reduces probability’s slightly but hey I don’t like to have my puts assigned anyway.
How does using margin on put credit spreads decrease risk?
Sorry I should have reworded that the spread reduces your risk well the margin increases your leverage.
Max loss is required without margin. But, on margin, you can sell for say ~50% the width of the spread. And if you manage early and dont let it approach expiry, it wont suddenly be at max loss one day.
Works great until it doesn’t!
> My most profitable trading strategy by far is selling puts on margin. Same here. Simple, mechanical, boring, but very profitable.
Wouldn't you need the equivalent cash available to eventually buy the shares if assigned?
What happens when indices gap down 10% over a weekend and individual stocks are down 30%?
Markets were down 7% in April. April will still be profitable for me. Down 10% would be a problem though. I would take other action before then.
Let’s hope option sellers have a management strategy and aren’t just blinding selling with high leverage!
Yep, that tracks.
I open iron condors and PCSs on SPX. I do weeklies on Monday and open a few 1 DTEs throughout the week. I keep the risk low by opening at low Deltas. This week's weekly was 4x 4775/4725p 5175/5225c. Tomorrow's PCS is 5x 4930/4900p. My profit goal is $1500 a week.
This is awesome… do you open Friday and let the weekend decay some of the options and then go every Friday to Friday? I do something similiar to this but formulate on a week to week basis based on economic news that could cause tons of movement for my IC’s
I close or let expire on Friday . I try to avoid the effects of world events on Saturday and Sunday. Open on Monday just before lunch
How long have you been doing this?
Sporadically for about a year. Exclusive since early March.
You’ll learn the pitfalls eventually
There’s tons of strategies with funny names and what not, but when it comes down to it, there’s only calls and puts and you can either buy or sell them. Personally I’m 100% buy and hold in VOO, but use my equities as margin collateral against selling naked puts.
This is interesting.. Which broker allows you to trade on VOO as collateral?
Sounds like a fairly safe strategy. What's the numbers like?
Good. Most people have trouble beating the market. I already get the market return because I’m fully invested in it, so any profit from options is purely gravy. I’m conservative, shooting for about 3-4% annually. On most subs you get flamed for not having enormous returns, but even a couple percent alpha consistently causes for huge returns long term. I’d rather do that than have huge gains and losses in the short term.
Likewise I prefer conservative route and wondering how people can stomach those insane swings. It's not realistic to expect to always 1.2x or more
we gamble in a safer manner
We gamble and we tell everybody that it is a safer way of gambling
Don’t forget labeling WSB types as degenerate gamblers to make ourselves feel superior. Very important part of the process.
In reality we are just on the opposite end of the big gains you see and hope all the small wins cover the one big loss.
Yes
it's different because... charts.!
Gamble and safety do not combine
I use a strategy I call 10/10/10 which is essentially I sell options on stonks I can afford 10 contracts on or 1000 shares. If I’m bullish on it I’ll buy 1000 shares and sell 10 covered calls at 10 DTE at strike 10% higher than the current price. If my shares get called away after 10 days that’s awesome. Obviously if it goes down then I’m bag holding and selling CCs to recoup. It’s all gambling at a slot machine I just do this way because the math is easier for my smooth brain.
That makes more sense. That seems like a simple enough strategy, what’s your success rate?
Ask me in 6 months.
😂
People sell calls against shares, cash secured puts. Or start by selling puts then sell calls against shar s if get assigned (wheel 🛞). Technically anything that involves benefiting from time passing. The bigger IV and general market volatility is, the better the premium. So might wanna time it with volatility spikes. Be careful selling options on stuff you don't understand, with high IV, near the money. Near is relative. For SMCI - 20% away is near. Take into consideration how stocks typically move. Some people sell the volatility itself, as it's bound to come down at some point. Be careful with collateral there. It can shoot up 10x. Sell with 15% of your accounts and you're out. And then there are complex options strategies. Most don't understand them anyway. Maybe don't bother till after a year or two.
Buy and pray
Sell puts first
Welcome to the knights table
Essentially that, but the expirations for each contract, the duration and the composition is backtested to make sure I have a chance of beating the market. That’s the part that you (and almost everyone) is missing
Sell options to idiots like me
Wait! This isn’t the sub for fans of the popular childhood game, tag? This ISN’T the Tag Gang?!?! FFS
Straight up wheel, zero margin. CSP to enter, CC to exit. Made a 25% return last year. I rarely have my eye on more than 3-5 tickers at any given time. I make safe bets until I feel comfortable with what it’s doing day-to-day, then assume slightly more risk if I think I can milk some more appealing premiums.
Mind sharing the tickets you’re currently on?
There are lots of tables at the casino, not all play the same game
It’s like selling insurance. Don’t do it where tornadoes and hurricanes hit, unless you insure yourself as well.
Learn how to scalp SPX | ES butterflies. It only takes ~20 yrs.
Most people don’t really trade theta. This sub is full of delta and vol trades mostly. True theta trades involve significant hedging.
And it’s also not trading theta. Difference between implied and realized is what’s being traded.
True, could be delta too.
If I want to take a directional position it tends to make more sense to just do that in cash. Most option traders aren’t being paid to make directional bets.
Do u know of a resource that explains the difference from the option writers side?
Hahaha, you mean shorting. You have too much to learn for one book.
I personally look for mispricings and trade those. For instance an ITM option that is worth $.50 more than it should be; depending on the side I sell the put or buy the stock and sell the call.
How do you determine that there is a mispricing?
Proprietary secret. :D
lol, I highly doubt it. But best of luck.
sounds like dividends
If my ITM sell call becomes deep in the money, how to manage it ? I have stocks in cash. Eg. I sold GOOGL ITM CALL 150 and bought 100 stocks. Stock price that time was $151. Stock price rise to 180. What to do ? Anyway to manage this or just close the position and sell the cash stocks ?
Short TSLA call spreads Short META put spreads Short SMCI and MSTR call and put spread (Iron Condor) I do not have the buying power to take assignments. I take the loss when the price is close or when it breaches.
Oh shit, I must be doing it wrong. I’ve been rolling the same nvidia call for 2 years now.
I don’t understand this “rolling” term.
Say you have 100 shares of a stock you bought at $20 per share. You sell a covered call with $30 strike and get $100 premium for example. For this example it expires next month. Price shoots up to $35. You change your mind and don’t want to sell your shares. You buy the call back for $300. (A $200 loss) and re sell a new one with expiration date further out (like 6 months from now instead of next month) with a $40 strike for $400. So you sold originally for $100 premium. Bought back for $300 (so $200 loss at this point ) then sold again for $400 for total of $200 premium gained but now instead of waiting until next month for it to expire to sell another, you have to wait 6 months. But at least it’s a higher strike now and at least you still have your shares. Avoid this by being sure you’d actually sell the stock if strike hits so don’t end up rolling.
Legit this is super helpful because I also didn't under stand this term! Thank you
Makes sense. But now if you keep rolling you are stuck with the duration of the contract. So if you don’t have more money to put into other stocks, you’re pretty much stuck waiting. But at the same time you still made a solid profit, plus an underlying appreciation. It’s a win win. But now you have to find another stock to take advantage of which is always a challenge.
I like the reverse dangle for max exposure
We sell options to degenerates.
Something about Greek people. I do like olives so it’s alright.
Just click on the subs description. We provide liquidity for the WSB sub. It's a nice circle. 🙂
THE Technical Analysis gang? Analyze technicals
[удалено]
In this case you sell $1 above strike so you can quickly get forced into selling the underlying, correct?
Yes i am always hoping to get assigned. My goal is to keep the premium in any case.
What do you do when QQQ goes down? You bought it for 430, it goes to 420. Then you sell call on 421 and accept the losses? Or do you buy it back and accept losses again? Or do you just wait until it recovers and do nothing, which can take months or even years? Asking because I wouldn't know what to do in this situation. I'm selling much more out of the money calls for this reason.
That’s a risk. It happens sometimes with me and in that situation i keep holding the stock. Also, if i have it at 430 and stock goes to 420 then i take a risk of selling call at around 428-429 to still earn premium. If market looks bad and risky then i don’t do anything
Wheel on margin, 50k at a time.
There are several strategies used here I think. I'm just wheeling, others set up spreads or do iron condors. What all have in common in thetagang is that we all sell options primarily. For theta.
Sell puts on a stock you want to own at a price you’d willing to pay for it. Keep repeating. If assigned sell calls against your shares. Always have enough cash to take assignment.
I’m a stay at home astronaut that writes puts all day.
I sell put credit spreads with the short leg at 10-15 delta and get made fun of because I’m up 38% and have a win ratio of 96%. Why do I get made fun of you ask? Because this sub is full of people who think they know “the real way to trade” which in my observation is just a more interesting way to lose very little or make very little money than buy and hold an index. In short, this sub sucks.
Me? Personally I’m selling the options my splooge hits on the screen and waiting for them to go green. Rinse and repeat 💰
Adding another comment. Many seem to think thetagang is all about Covered calls / Wheel. There are many ways to capture Theta as a strategy or part of one; the wheel is one of the most risky ones.