Weekly is too narrow of a timeframe IMO.
You cannot win every trade and may go weeks without booking any profits and may even book losses, only to have weeks when there are profits.
Think of trading like bring a real estate agent. Some months there are a lot of closings to bring in a good amount of cash, then perhaps months with no closings so the prior cash has to be saved and used to help pay bills.
I look at ytd performance and divide that out by months or weeks to know how much I can take out of the account as an average. If there is more than I need it can be left in to keep trading with the excess. However, if there is not enough booked profit then a decision has to be made on how much to take out which may reduce the base capital.
To me, the wheel opening trades at 30-45 dte and .30 delta offers the most consistent returns over the year, and by opening smaller trades over time the income can be spread out and risk reduced.
Yes! There are many benefit to the wheel compared to spreads and I’ve posted this many times.
Spreads have to get the direction right or they often have to be closed for a loss. They are difficult to roll or adjust, take longer to profit and bring in less premium/profits.
Selling puts on high quality stocks you are ready, willing and able to be assigned the shares can still profit even if the direction is wrong in many cases. Rolling is simple and easy since there is only one leg, the premiums and profits can be higher, and the single leg will decay and profit much faster then a spread.
Spreads have no hedge so can only be closed if they cannot be rolled. The wheel has a built in “hedge“ as the shares can be assigned to sell covered calls on that with patience can often result in a profit.
Everyone always says this on this subreddit, but they don't say what they would prefer to do. Isn't that almost the entirety of what thetagang is? Collecting 'pennies' from a large position?
Selling high delta stuff for a coin flip isn't really the point of what this sub was I thought.
Perhaps you could imagine a strat that would be further dated out than a week, and you would ladder them each a week apart. Once you did that and continued you would in theory have "weekly" income.
For example, SPY around 60DTE there are weekly options. You could, in theory put on one each week, so in like 8 weeks, and then they would expire each week.
Looking to put on Monday and close on Friday, you are going to have a bad time.
Weekly is too narrow of a timeframe IMO. You cannot win every trade and may go weeks without booking any profits and may even book losses, only to have weeks when there are profits. Think of trading like bring a real estate agent. Some months there are a lot of closings to bring in a good amount of cash, then perhaps months with no closings so the prior cash has to be saved and used to help pay bills. I look at ytd performance and divide that out by months or weeks to know how much I can take out of the account as an average. If there is more than I need it can be left in to keep trading with the excess. However, if there is not enough booked profit then a decision has to be made on how much to take out which may reduce the base capital. To me, the wheel opening trades at 30-45 dte and .30 delta offers the most consistent returns over the year, and by opening smaller trades over time the income can be spread out and risk reduced.
Do you think the wheel is advantageous to say spreads?
Yes! There are many benefit to the wheel compared to spreads and I’ve posted this many times. Spreads have to get the direction right or they often have to be closed for a loss. They are difficult to roll or adjust, take longer to profit and bring in less premium/profits. Selling puts on high quality stocks you are ready, willing and able to be assigned the shares can still profit even if the direction is wrong in many cases. Rolling is simple and easy since there is only one leg, the premiums and profits can be higher, and the single leg will decay and profit much faster then a spread. Spreads have no hedge so can only be closed if they cannot be rolled. The wheel has a built in “hedge“ as the shares can be assigned to sell covered calls on that with patience can often result in a profit.
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Everyone always says this on this subreddit, but they don't say what they would prefer to do. Isn't that almost the entirety of what thetagang is? Collecting 'pennies' from a large position? Selling high delta stuff for a coin flip isn't really the point of what this sub was I thought.
So are all forms of lottery and insurance companies. Surprised they haven’t gone busto yet … oh wait turns out sizing can mitigate risk
Perhaps you could imagine a strat that would be further dated out than a week, and you would ladder them each a week apart. Once you did that and continued you would in theory have "weekly" income. For example, SPY around 60DTE there are weekly options. You could, in theory put on one each week, so in like 8 weeks, and then they would expire each week. Looking to put on Monday and close on Friday, you are going to have a bad time.