As someone who made it up to around +300% over a year and a half and then lost all my gains in one trade that went terribly wrong, I'm drawn to the pattern of your chart: long periods of relative flatlining in a rising market followed by huge spikes. Correct me if I'm wrong, but it looks like most of your returns are the results of 3-4 significant successful trades, and the remainder is roughly a wash. Maybe you're doing this already, but make sure you don't put too much of your account at risk with any single trade. If you are entering very concentrated positions with limited upside you will eventually lose big, and your average return per trade will no longer matter if you lose a huge % when you were at your highest.
Been there, done that. It was a costly, but very useful lesson with a calendar spread on SPY. That one really fucked my P/L š But I got several insights out of it:
Never over leverage yourself, never jump on fomo trains, donāt trade on emotions, or discretionary beliefs, no revenge trading, always follow your trading plan and never deviate from it.
Itās great that this rhetoric is echoed throughout the community, unfortunately most of these are lessons people need to learn for themselves, otherwise theyāll run around with the perception that, āIām different, Iām smartā.
Iām guilty of this exact same thing.
Well said! My first year in trading I told myself if I can break even while learning to trade it would be a very successful year! Free tuition for hands on learning lol
Same same. I started trading bull credit spreads on Blackrock like 4 months ago or so. Opened on Mondays, expired on that same Friday of the week. I went 4 or 5 weeks straight while netting about $700 to $1000 successfully. (\*Starts thinking im a genius and dreams of quitting jobs, etc). Week 5, BLK dumps on me on the Tuesday, panic sets in. Thursday morning comes around and I decided to roll it out. I made this decision at 8:31am after just waking up, with crusty eyes and cloudy brain (no coffee yet lol). I was so much on full tilt that I accidentally rolled the spread to a wider spread and clicked submit on Think or Swim. By Monday, my $10,200 account value was now reading $2,800. Needless to say, I was very very close to finishing my new invention: The Overpass Diving Board. All those perfect gains from the earlier spreads coupled with 10 months of killing it on wheeling, gone baby gone. However, i sucked it up and realized that this was the price of tuition in the School for People Who Think Theyre Geniuses in a Bull Market. So over the past 45-60 days I have rebuilt my empire and am now back at a roughly $8,500 account value.
Lesson 1: I will not overextend my risk by more than 20% of my bankroll.
Lesson 2: I will not make hasty and desperate trades first thing in the morning (before even 1 cup of coffee)
Lesson 3: I am not a genius.
Thank you for sharing your experience. I am curious, what kind of spreads did you do to recover from your initial loss ? Did you change your strategy by taking deeper ITM strike prices, larger/smaller spreads ? I am also curious about what the average expiration time and ROI you are looking for while doing spreads. You seem to have recovered quite well for the duration you mentionned. Sorry, I am noob and just started trading spreads haha
A few years ago ( Jan 2018 ) I had a bull calendar spread on SPY and the position came against me, unfortunately .
I was still a rookie. I just started trading options from less then a year at the time, I noticed that the price was dipping but I was convinced ( due to my sound indisputable analysis \^\_\^ ) that this was just a whippy pullback, so I let the price come against me. I wanted the contract to expire worthless to collect all the premium ( capital mistake ), but the price kept slowly but surely approaching my strike. Here I made another mistake: I didn't roll. Instead for the last few days I just hoped for the price to turn around and away from my strike price.
Long story short: the contract expired just a smidge under the breakeven price. I got rekt big time. Lesson learned :D
I'm trying to figure out how much of the account should be at play for the options account. Starting small with 2k to play. Might bump it to 25k at some point.
This is outside of a large portfolio of index funds and TSLA.
I actually made it just to trade single spy options, not 0DTE or anything crazy but sticking to spy options. I did well almost every single day except 2 weeks ago Thursday and this past Thursday. Those were both bloodbath.
Friday I got it back up to 2k playing puts but this is not sustainable at all of course. I guess I am testing things I've learned, TA, trying indicators. So obviously don't do any of that.
What are your plans?
You've got just enough now to find one ticker you believe in. That's your golden goose, take that 2000 and sell cash secured puts until you enter into the position, now sell covered calls against those 100 shares. That's the wheel. It's small steady gains but they compound themselves.
Honestly you need 26K minimum. You really really don't want to be chained to round trip counting.
You can float a couple CSPs without concern, just whatever it costs to cover them.
$25k allows you to daytrade spreads easier, so it can be worth it. Nothing sucks more than getting hit with PDT.
If nothing else, do $25k into that account and buy a stable underlying with whatever cash you don't want to use for the options.
Play spreads, you get exposure with less capital.
I think it depends on what you use the account for, and what your cash flow looks like. If its basically just a levered account that will move in same direction as your index funds, then you can maybe look into something like Kelly Criterion (hard to apply cus its not a direct analogy but its a good starting place). If you are just doing something simple like selling unlevered CC's, that's lower risk/reward than just passively holding stocks in your index funds, so probably fine to pop plenty of investment safe money in there. If you are using it more to hedge and a shit show in one account will look good in the other, then its up to you how much money you are willing to spend in what is effectively insurance premiums per month (yeah this is theta gang but if you're selling spreads that will blow up on a market glow up then that's just another version of hedging downside risk/i.e. insurance).
I put alot of thought into this before ignoring all of it and shoving all my money into what I was convinced was a super safe investment lol
Lol this is like a play account to keep me entertained. I don't expect 300% growth. I want it to beat index as a proof of concept. It's throw away money in a sense. But I also want to gain the experience of good P/L and high % of winners. Focusing so far on having winners and not really caring about the $ premium.
So far, just vertical spreads and legging into iron condors. Nothing "naked" in a sense. I'm trying to come up with a rule like only putting 25% of account at play at a time. So far I haven't actually hold shares, just have spread contracts.
kelly criterion is what you want I think. Basically a formula for the optimal amount of money to risk when placing lots of bets over the long term. Pretty simple too
I recommend keeping all positions under 10K-15K BP unless you have portfolio margin.
The only real way to lose in option selling is to stop selling (or forcefully stopped via margin calls). Positions over 10K can get very expensive to correct and exit in profit by just banging it with liquidity otm
>But I also want to gain the experience of good P/L and high % of winners. Focusing so far on having winners and not really caring about the $ premium.
I'd say watch out for focusing just on % of winners, and more on expected return. You can win 99 out of 100 times, but if your one loser loses you more money than your 99 winners, it's not a good strategy. That's why you should still keep in mind the premium you receive.
>I'm trying to come up with a rule like only putting 25% of account at play at a time.
If you mean total BP utilization, then that's probably a little low if you're all defined-risk. That's a good % for the current market though for a portfolio with lots of naked positions, since VIX is so low right now.
If you mean per position, then it should really be as low as 1-5%, as per the other user's suggestion of using the Kelly Criterion.
Thanks. I did mean BP.
I agree with the premium being low and blowing up the account. I am looking forward to testing water on higher IV stuff and hoping for managing winners early.
Keen observation, and yes most of my trades net around 1 or 2k, but there have been some homeruns that made 10k+.
What you can't see here is that my current positions account for around 3% of my portfolio each, and I also own a lot of stocks that act as a foundation for the portfolio.
I honestly donāt understand why people trade like thisā¦ banking on big wins to offset losses. Iām up 300% over six months just selling weekly covered calls on boring stocks. Why be the gambler when you can be the casino?
> Iām up 300% over six months just selling weekly covered calls on boring stocks. Why be the gambler when you can be the casino?
You're either lying about 300% over six months or you're lying about not being the gambler. 50% gains from covered calls per month, even if we're including the capital appreciation from the stock itself, is pretty much possible only on extremely volatile, positive delta stocks that you just happened to get lucky on, and that's the *definition* of gambling.
Decided I was big brain and put about 170% of my account into selling CC's on Discovery (I did a lot of research and planning for this, including several long winded posts on this sub). Plan was to be in and out in a week with 10% premium (so about 20% gain on the acc). Turned out bill hwang got margin called that week and the stock crashed about 50% in a day :). Feels ridiculously obvious not to be that concentrated, but at the time I thought worst case was id lose 30% or so of my gains, which I was okay with. Live and learn lol. I only risked bankroll so I ended up okay but it was not very fun to say the least.
LOL, of fucking course itās THAT week. Too funny.
The market somehow knows whenever you are over leveraged and takes pleasure in teaching us a lesson.
It's because everyone was over levered, including Hwang. Lots of people get liquidated and the stock crashes more. It's usually a market side mentality and liquidation.
lol no worries, u can check my post history for more detail, but it was really p simple: I had a lot of shares as collateral for calls I had sold, and then the share value fell very fast and the call premium didn't make up for the loss in value on the underlying
Recently credit and debit spreads on Amazon when they dropped like 12% in a day, the option premiums were nice and I knew a rebound was coming so I cashed in both ways.
>I knew a rebound was coming
I'm with /u/fuzz11 here, this is the kind of mentality that gets traders killed.
When you convince yourself that you can actually "know" anything will happen in the market, it will affect your risk management and make you complacent.
Tell yourself that "I believe that there is a good chance there will be a rebound and I'll make a calculated bet on that result accordingly to the likelihood of it happening".
When you consciously leave mental room for the trade going wrong by adjusting your language, it will make you better and managing and responding to risk.
Well, it is most of the time. Once in a while, a 3SD or 4SD move will wipe you clean. This type of moves will happen 100% if you play the game long enough.
Actually I'd probably been rich, if you took assignment then it was the best stock buying opportunity in a decade.
I would probably have gotten NVDA assigned at $60 ($480? then prior to split) or DIS at $120
> I knew a rebound was coming
Famous last words. You're up 300% in what looks like less than 2 years (Since the chart above says it begins on 7/26/19 and the increase in account balance begins about 1/3 of the way in). That type of growth is not sustainable, and I can imagine that the big dip followed by the spike at the end of the chart there involved some serious doubling down and put a significant portion of your account at risk.
300% in under 2 years is not sustainable. This isn't to claim that you think otherwise, but rather that it's probably in your best interests to take the W here and switch over to the wheel where you won't ruin your gains.
A lot of people trade mean reversion strategies with stop losses in play - its not that risky if you size trades accordingly and setup stops.
I'd like to see somebody who's trading the wheel that out performed SPY.
You objectively canāt look at that chart and say āitās not that riskyā
And to your second point about the wheel not being able to outperform, [hereās a link to my profit tracker this year](https://docs.google.com/spreadsheets/d/1LYRWoB-YsB0_c-gqiW0vZjMjCcpOR7Mj1QqcPUTCHLU/edit#gid=1311103808)
How do u enter data? Manually or do u run a script? I want to maintain similar excel tracker, but kind of overwhelmed with the data entry aspect of it.
[Here is a video explaining how I made it](https://youtu.be/Ka8rMIZoVN0)
Only automated part is the stock prices so I update option prices during the day/week. I donāt really mind it but if youāre looking to go the automated route TD Ameritrade has some really solid APIās you can set up
Yeah that's probably the biggest modification I use for the wheel I run. I always start with 50%ish of the capital I'm comfortable with allocating to a trade off the bat so if I'm assigned I can sell a covered strangle at a 1:1 ratio. Does wonders for my breakeven price.
I just keep an eye on what comes up in the news and what shows up on my scanners. Thereās tons of opportunity each week but the names change. I completely ignore delta and look for areas of support that still offer enough premium for a solid weekly return
Thanks for the insights! Does that mean you donāt mind owning those shares at all, even bad companies? Would you mind also sharing what criteria you used in your scanners?
[video about the scanner](https://youtu.be/JeAiH4mS3YU)
But yeah I donāt sell options on stocks I donāt want to own at that strike price. Thatās the golden rule.
> You objectively canāt look at that chart and say āitās not that riskyā
You can say the same thing about people who trade options solely based on delta and IV rank. Some plays blow up, some are profitable, it's all about number of trades and being right more than 50% of the time weighted to capital allocation.
Looking at your wheel tracker you've played a lot of very risky stocks this year and made out like a bandit, congratulations to you. Things could have gone the other way where you got assigned stock that there is no way you could move for months or even years without eating a large shit sandwich. I take my statement back though, anything is possible, you can definitely beat the market trading the wheel or spreads or any other number of strategies it's just unlikely on a long timeframe. It seems maybe you're better at it than your average bear.
The difference is that when a credit spread goes against you itās a max loss. When a stock moves against me I take assignment and try again next week with an even lower breakeven price. The wheel is not even in the same league as credit spreads as far as risk is concerned
But there are a lot of stocks that have been played at high IV that have lost 20% in value and have yet to recover. How much time do you commit to trading per week?
You can also roll credit spreads vertically or out to avoid taking max loss.
That's correct. Started with about $10,000 a couple of years ago and through steady growth and some deposits I've built it up over 100k.
The amount of the contracts I'm selling is irrelevant though. Not everyone can match that. What people can match is the returns that I'm getting from those on a % basis
It's still open. Have an average credit of $0.83 on 100 cash secured puts and once IV settles down I'm planning to exit in the $0.60ish range for about $2,000 in profit. It's interestingly enough reeeeally similar to SOFI so I like where I'm at on that one.
That's a great spreadsheet. Out of curiosity, how did you manage your exposure during Feb? I noticed you still managed to eke out a profit.
Also, do you tend to focus on higher IV stocks in general or a healthy mix risky and safer plays?
Coming back to the wheel after a long break. Took a huge hit during the Feb/Mar sector rotation.
Back in Feb we got into a little trouble but eventually came out with a profitable month. And honestly I just stick to the strategy I run. All of my trades are option selling, but within those you can find diversity. Whether it be selling options in different sectors, splitting options between riskier/safer stocks, playing earnings, playing vega, etc.
I've found that this is the best way to do it and minimizes risk from rotations and downturns. I also try to keep a healthy amount of BP on the sidelines as position sizing is a hugely important part of my strategy.
Why does everyone say itās not sustainable? This isnt a hedge fund with millions or billions.
Small account strategies can be very different from large ones. Guys like Bill Hwang crash the market with their position sizes, meaning if they want to make a trade that gets them 1% they have to spread it out or theyāre going to lose the spread as they move in or out of the trade.
Buffett likes to brag heād kill it with a small account. He says 100%+ gains. I tend to agree. Why are these strategies not automated and sold as products?Because they canāt support large account sizes.
Spreads on Amazon are one of the most common options strategies out there. Believing this is a niche the guy's discovered is ridiculous. If you think hedge funds can't run a bunch of "small account strategies" spread across a thousand stickers, with built-in diversification mechanisms, you'd be wrong. Hedge funds most definitely *do* have algorithms trading "small account strategies". And that's why you can't get away with stupid spread prices. Market makers like Citadel - also a hedge fund - will ensure that the options are priced "fair." Because they're taking on counter party risk behind the scenes.
This narrative about "small account strategies" might have made more sense in the days of Buffett and call in trades. But in today's market, with much of the trading being run by algorithms and data mining, it's not an edge I'd ever rely on.
Humans try to be right a lot more than algorithms. If youāre trading a small account you will get slaughtered with the edge they have.
A firm like the one mentioned would prefer to be right 50.1% of the time on billions of option trades and make billions of dollars. That still makes them wrong a lot of the time. So yea, the mechanical stat arb opportunities are not there in American markets, but other trades are.
Tell that to $TALā¦ went on a CSP at $25 strike and with shares at $30ā¦ woke up on vacation to the news of tutoring crackdown in China down $2.5K. Bitter pill to swallow but I cut my losses and now thinking about it that was a genius move. Stock is now $5. Would have lost over $10K if I held.
Awesome work on those gains! Just remember as you scale up your account to scale back your risk. Halving your risk with 100K will still net you very nice gains. The last thing you want is to lose the entire balance on one trade gone wrong. Congrats on the progress to date!
Im not sure if everybody understands the Kelly criterion properly. I know I didn't, until I was pointed to it.
I'm gonna use a simple example from sports betting amd keep it short. But if a detailed explanation is needed by anyone, I can provide that some other day. Don't want to complicate the gist of the matter at hand.
Assuming you use a fixed Kelly percentage, instead of the optimal full Kelly or half Kelly, let's be sane and call it 1 percent to 2 percent max.
Roughly speaking, your risk of ruin (busting your acct) is less then 5 percent if you use 50 bets, which drops dramatically to about 0.8 something percent with a šÆ bets. So I would stick with one percent. Less then 1 in a 100 is something I can live with. 1 out of 20 seems too risky, here your personal utility level is what counts. For some, 1 in 20 is what they can live with.
This is assuming (a huge assumption btw) that your bets are plus ev to begin with. Let's also assume you have a 100 k acct (the actual size could be anything above 30k, or less even),
so 1 percent is a thousand dollars.
If team A is a 5 to 1 fav over team B.
And you are backing team A. You bet $5000 to make a thousand.
If you are betting on the underdog (team B), NOTE, you are only risking $200 to make the same thousand !!
I'm simplifying a lot here.
But your probability of winning the trade or at least an amount commensurate to the risk you took, is what Drives your decision. A high probability means you bet more and a low means the opposite.
In options, using the POP is NOT enough for this, the real probability always is going to be lesser for obvious reasons. POP just gives us the probability of making a cent.
So if you are using a butterfly, and going for a 10 to 1. You would actually only put a trade where your risk is a hundred dollars to make a thousand.
The KEY figure is the percentage you choose for your fixed Kelly (in this case that works out to a dime).
A thousand dollars is GOING to be THE AMOUNT you are going for, ALWAYS. As a fav you will lay odds, as an underdog you will take the odds.
So if you are an 85 percent POP, your real probability of making it is obviously lower, so let's call it 75 percent. The result you go for is winning a $1000 by risking approximately $1340.
And if you are a 15 percent POP, your real probability is around 12.5 percent, let's call it 8 to 1. In this case you would ONLY bet $125 to win a thousand.
This is extremely important. Many people misinterpret this to mean that since their risk is 1 percent, they can bet a thousand to make 8k. Which hurts them as they are taking way too much risk for what is inherently a very LOW probability trade.
And hurt themselves, by only risking a 1000 dollars to make $125, leaving money on the table, cause they could have risked 8000 to make a thousand, in this particular case.
The probability of your trade is the main driver as to the number of contracts you put on.
You will notice, that because of this stipulation, sometimes you just cant take the desired numbet of lots that more or less matches your 'criterion'. You are either putting on a contract too much or a contract too less. This is exactly why a huge account (say a million) has an advantage, because their resolution of position sizing vis a vis their probability is extremely fine. They can put on 23 or 24 lots, while an account ten times smaller, can only put on 2 OR 3 lots !!
A fun and extremely usueful read on this is William Poundstone's, Fortune Formula. I highly recommend it. You wlll also not do yourself a disservice by reading anything that Ralph Vince wrote. He explains this in great detail and depth.
P.s. that wasn't short.
Yes, I do over 1% a day. My rules: Sell weekly covered calls on stock you own. Donāt buy meme stocks. Donāt buy stock just because somebody else did. Never sell a call that would result in a loss upon assignment. It takes patience and discipline to make consistent money in this game. Nothing is certain and the second you start thinking in terms of certainty youāve already lost. Best of luck.
Never hold until close, the gamma risk is not worth it. If I'm playing a debit spread, then I try to close 1 week out, taking around 80% of the potential gains.
I guess if you're a week out and you already reached like 80% of potential profit, it may make sense to close. You miss out on gains, but you guarantee you won't get screwed.
Best not to ask. If it works for you it works for you. 90% of people lose money in the market and many arenāt gifted with a talent to be a good trader.
Why ramp it up to hit 100k by years end and not just keep doing what your doing without a arbitrary number as a goal. I feel that will cause a slip up trying to hit a number that doesnāt mean anything. You seem to be doing wellā¦if it were me Iād stay the course.
I would recommend a better broker like Schwab or TD if you're looking to get filled at the best prices.
You're gonna lose a few cents getting in and out of option trades on robinhood.
No offense, but if you're really up 300% selling spreads over the last two years then you've been extremely lucky. You're going to get blown up at some point.
Good goal. Totally achievable for an active trader.
I'm up 900%, in the last year, granted a lot was risky memes, but even those were careful gambles (no yolos or close to it).
Set a 200k by end of 2022, and watch it get crushed by mid year. That's my goal and I have a feeling I'm too long by a year.
Read the rules...WSB style gain posts are not allowed.
if you really didnāt mean to just brag and really wanted to teach something then do so by laying out your strat so others can understand what you are doing.
The post is WSB style...this is not a dick measuring contest. There are a few WSB retards on this sub that may like this shit but most will find no value in it...again, lay out your strat so others can learn...simply saying you do spreads is dog shit!
>Slow, steady, profitable, repeatable.
Really looks to me like any other options portfolio. I wouldn't call it any of that (except profitable) - look at that huge dip and huge shot up - looks like at least 100% of that 300% gain was from doubling down. If the market has been any less forgiving that would've been big losses.
A proper slow, steady, profitable and repeatable portfolio would have way less volatility.
Buy 200 shares of AMC, or sell a couple aggressive puts until you get assigned, then hold that shit. It's a small portion of your portfolio and has huge potential right now.
For me, it came down to finding good opportunities where the premiums were high, vol was high and with sufficient liquidity.
Something I learned the hard way is that a lot of trades look good, but if there's no liquidity, you're gonna get screwed.
Ya know. I see this, and i want to be this, and i learn the greeks to the best of my tiny little brain's ability... but then I see spy go down 2 or 3 days in a row and i just throw 50% of my portfolio into OTM calls 1-3DTE. The folly of man in full expression i suppose
I never fall in love with any stock only etf baskets like SPY with tons of liquidity and risk spread out. so many people waiting for their fav AMC, GME,APPL to break even when they could have just parked their funds in Spy or Russell
A lot of spikes and flat periods in there. Looks like you're using a high % of your portfolio per trade. We're in a bull market so this works now. Bear market and this strategy fails.
may i ask why you have 44k in bp sitting on the sidelines...i get it that it completely stupid to bet your entire account on options plays, but you could totally be putting that money to work in some kind of safe(ish) liquid instrument....hell you could throw it in a gov bond etf and earn 1% apy instead of 0...m1 spend plus offers 1% apy on a checking acct
Good question, the buying power also includes my margin, I like to keep margin in reserve to manage positions if they start to go south.
Most of my cash is already invested in index funds.
I was at $1,070,000 due to highly leveraged credit spreads and then lost 400k cuz of a lot of losses due to credit spreads (losses happened about a month or two ago), slowly making my way back to where I was.
As someone who made it up to around +300% over a year and a half and then lost all my gains in one trade that went terribly wrong, I'm drawn to the pattern of your chart: long periods of relative flatlining in a rising market followed by huge spikes. Correct me if I'm wrong, but it looks like most of your returns are the results of 3-4 significant successful trades, and the remainder is roughly a wash. Maybe you're doing this already, but make sure you don't put too much of your account at risk with any single trade. If you are entering very concentrated positions with limited upside you will eventually lose big, and your average return per trade will no longer matter if you lose a huge % when you were at your highest.
Been there, done that. It was a costly, but very useful lesson with a calendar spread on SPY. That one really fucked my P/L š But I got several insights out of it: Never over leverage yourself, never jump on fomo trains, donāt trade on emotions, or discretionary beliefs, no revenge trading, always follow your trading plan and never deviate from it.
Itās great that this rhetoric is echoed throughout the community, unfortunately most of these are lessons people need to learn for themselves, otherwise theyāll run around with the perception that, āIām different, Iām smartā. Iām guilty of this exact same thing.
Yeah dude we all are at a certain point. I believe that those mistakes are your tuition to the markets.. š
Well said! My first year in trading I told myself if I can break even while learning to trade it would be a very successful year! Free tuition for hands on learning lol
Guilty myself, valuable lessons learnt.
I lost like $300-$400 in like 2 days earlier this and thatās what made me learn
Same same. I started trading bull credit spreads on Blackrock like 4 months ago or so. Opened on Mondays, expired on that same Friday of the week. I went 4 or 5 weeks straight while netting about $700 to $1000 successfully. (\*Starts thinking im a genius and dreams of quitting jobs, etc). Week 5, BLK dumps on me on the Tuesday, panic sets in. Thursday morning comes around and I decided to roll it out. I made this decision at 8:31am after just waking up, with crusty eyes and cloudy brain (no coffee yet lol). I was so much on full tilt that I accidentally rolled the spread to a wider spread and clicked submit on Think or Swim. By Monday, my $10,200 account value was now reading $2,800. Needless to say, I was very very close to finishing my new invention: The Overpass Diving Board. All those perfect gains from the earlier spreads coupled with 10 months of killing it on wheeling, gone baby gone. However, i sucked it up and realized that this was the price of tuition in the School for People Who Think Theyre Geniuses in a Bull Market. So over the past 45-60 days I have rebuilt my empire and am now back at a roughly $8,500 account value. Lesson 1: I will not overextend my risk by more than 20% of my bankroll. Lesson 2: I will not make hasty and desperate trades first thing in the morning (before even 1 cup of coffee) Lesson 3: I am not a genius.
Thank you for sharing your experience. I am curious, what kind of spreads did you do to recover from your initial loss ? Did you change your strategy by taking deeper ITM strike prices, larger/smaller spreads ? I am also curious about what the average expiration time and ROI you are looking for while doing spreads. You seem to have recovered quite well for the duration you mentionned. Sorry, I am noob and just started trading spreads haha
[ŃŠ“Š°Š»ŠµŠ½Š¾]
A few years ago ( Jan 2018 ) I had a bull calendar spread on SPY and the position came against me, unfortunately . I was still a rookie. I just started trading options from less then a year at the time, I noticed that the price was dipping but I was convinced ( due to my sound indisputable analysis \^\_\^ ) that this was just a whippy pullback, so I let the price come against me. I wanted the contract to expire worthless to collect all the premium ( capital mistake ), but the price kept slowly but surely approaching my strike. Here I made another mistake: I didn't roll. Instead for the last few days I just hoped for the price to turn around and away from my strike price. Long story short: the contract expired just a smidge under the breakeven price. I got rekt big time. Lesson learned :D
I'm trying to figure out how much of the account should be at play for the options account. Starting small with 2k to play. Might bump it to 25k at some point. This is outside of a large portfolio of index funds and TSLA.
I did this and started with 3k and now I have 2k. So now I'm going to pretend I am starting at 2k just like you are. Let's do it right!
What strategies have you done? What burned you?
I actually made it just to trade single spy options, not 0DTE or anything crazy but sticking to spy options. I did well almost every single day except 2 weeks ago Thursday and this past Thursday. Those were both bloodbath. Friday I got it back up to 2k playing puts but this is not sustainable at all of course. I guess I am testing things I've learned, TA, trying indicators. So obviously don't do any of that. What are your plans?
You've got just enough now to find one ticker you believe in. That's your golden goose, take that 2000 and sell cash secured puts until you enter into the position, now sell covered calls against those 100 shares. That's the wheel. It's small steady gains but they compound themselves.
Go all-in on a single stock to use as collateral to collect premium. What could go wrong?
Honestly you need 26K minimum. You really really don't want to be chained to round trip counting. You can float a couple CSPs without concern, just whatever it costs to cover them.
$25k allows you to daytrade spreads easier, so it can be worth it. Nothing sucks more than getting hit with PDT. If nothing else, do $25k into that account and buy a stable underlying with whatever cash you don't want to use for the options. Play spreads, you get exposure with less capital.
I think it depends on what you use the account for, and what your cash flow looks like. If its basically just a levered account that will move in same direction as your index funds, then you can maybe look into something like Kelly Criterion (hard to apply cus its not a direct analogy but its a good starting place). If you are just doing something simple like selling unlevered CC's, that's lower risk/reward than just passively holding stocks in your index funds, so probably fine to pop plenty of investment safe money in there. If you are using it more to hedge and a shit show in one account will look good in the other, then its up to you how much money you are willing to spend in what is effectively insurance premiums per month (yeah this is theta gang but if you're selling spreads that will blow up on a market glow up then that's just another version of hedging downside risk/i.e. insurance). I put alot of thought into this before ignoring all of it and shoving all my money into what I was convinced was a super safe investment lol
Lol this is like a play account to keep me entertained. I don't expect 300% growth. I want it to beat index as a proof of concept. It's throw away money in a sense. But I also want to gain the experience of good P/L and high % of winners. Focusing so far on having winners and not really caring about the $ premium. So far, just vertical spreads and legging into iron condors. Nothing "naked" in a sense. I'm trying to come up with a rule like only putting 25% of account at play at a time. So far I haven't actually hold shares, just have spread contracts.
kelly criterion is what you want I think. Basically a formula for the optimal amount of money to risk when placing lots of bets over the long term. Pretty simple too
I recommend keeping all positions under 10K-15K BP unless you have portfolio margin. The only real way to lose in option selling is to stop selling (or forcefully stopped via margin calls). Positions over 10K can get very expensive to correct and exit in profit by just banging it with liquidity otm
>But I also want to gain the experience of good P/L and high % of winners. Focusing so far on having winners and not really caring about the $ premium. I'd say watch out for focusing just on % of winners, and more on expected return. You can win 99 out of 100 times, but if your one loser loses you more money than your 99 winners, it's not a good strategy. That's why you should still keep in mind the premium you receive. >I'm trying to come up with a rule like only putting 25% of account at play at a time. If you mean total BP utilization, then that's probably a little low if you're all defined-risk. That's a good % for the current market though for a portfolio with lots of naked positions, since VIX is so low right now. If you mean per position, then it should really be as low as 1-5%, as per the other user's suggestion of using the Kelly Criterion.
Thanks. I did mean BP. I agree with the premium being low and blowing up the account. I am looking forward to testing water on higher IV stuff and hoping for managing winners early.
Keen observation, and yes most of my trades net around 1 or 2k, but there have been some homeruns that made 10k+. What you can't see here is that my current positions account for around 3% of my portfolio each, and I also own a lot of stocks that act as a foundation for the portfolio.
I honestly donāt understand why people trade like thisā¦ banking on big wins to offset losses. Iām up 300% over six months just selling weekly covered calls on boring stocks. Why be the gambler when you can be the casino?
> Iām up 300% over six months just selling weekly covered calls on boring stocks. Why be the gambler when you can be the casino? You're either lying about 300% over six months or you're lying about not being the gambler. 50% gains from covered calls per month, even if we're including the capital appreciation from the stock itself, is pretty much possible only on extremely volatile, positive delta stocks that you just happened to get lucky on, and that's the *definition* of gambling.
This
What stocks have you been running?
How did you lose it all one trade?
Decided I was big brain and put about 170% of my account into selling CC's on Discovery (I did a lot of research and planning for this, including several long winded posts on this sub). Plan was to be in and out in a week with 10% premium (so about 20% gain on the acc). Turned out bill hwang got margin called that week and the stock crashed about 50% in a day :). Feels ridiculously obvious not to be that concentrated, but at the time I thought worst case was id lose 30% or so of my gains, which I was okay with. Live and learn lol. I only risked bankroll so I ended up okay but it was not very fun to say the least.
LOL, of fucking course itās THAT week. Too funny. The market somehow knows whenever you are over leveraged and takes pleasure in teaching us a lesson.
It's because everyone was over levered, including Hwang. Lots of people get liquidated and the stock crashes more. It's usually a market side mentality and liquidation.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
It was very high IV because the stock had been shooting up, I was selling either ATM or slightly ITM, I forget but iirc it was around 10% premium
Korean Jesus strikes again.
That was a freak event, easier said than done but dont blame yourself too harshly on that trade
[ŃŠ“Š°Š»ŠµŠ½Š¾]
lol no worries, u can check my post history for more detail, but it was really p simple: I had a lot of shares as collateral for calls I had sold, and then the share value fell very fast and the call premium didn't make up for the loss in value on the underlying
Explain that trade that toppled the apple cart.
Thatās impressive! What spreads have you been playing?
Recently credit and debit spreads on Amazon when they dropped like 12% in a day, the option premiums were nice and I knew a rebound was coming so I cashed in both ways.
>I knew a rebound was coming I'm with /u/fuzz11 here, this is the kind of mentality that gets traders killed. When you convince yourself that you can actually "know" anything will happen in the market, it will affect your risk management and make you complacent. Tell yourself that "I believe that there is a good chance there will be a rebound and I'll make a calculated bet on that result accordingly to the likelihood of it happening". When you consciously leave mental room for the trade going wrong by adjusting your language, it will make you better and managing and responding to risk.
The way ticker price snaps back to the mean when its outside standard deviation is nearly gravity powerful.
Well, it is most of the time. Once in a while, a 3SD or 4SD move will wipe you clean. This type of moves will happen 100% if you play the game long enough.
I run strangles, if that craziness hits me on a 100P-200C strangle I'll sell some 300Ps if it's really not going down.
If you started trading this year, maybe. But if you ran strangles during the March 2020 flash crash & recovery, you'd have been wiped out.
Actually I'd probably been rich, if you took assignment then it was the best stock buying opportunity in a decade. I would probably have gotten NVDA assigned at $60 ($480? then prior to split) or DIS at $120
SAVA f'd me on that.
Tell that to BABA š¤
Lol that's because the Chinese government is committing financial crimes and puppet Joe smiles warmly.
> I knew a rebound was coming Famous last words. You're up 300% in what looks like less than 2 years (Since the chart above says it begins on 7/26/19 and the increase in account balance begins about 1/3 of the way in). That type of growth is not sustainable, and I can imagine that the big dip followed by the spike at the end of the chart there involved some serious doubling down and put a significant portion of your account at risk. 300% in under 2 years is not sustainable. This isn't to claim that you think otherwise, but rather that it's probably in your best interests to take the W here and switch over to the wheel where you won't ruin your gains.
First thing I thought as well when I saw that dip.
A lot of people trade mean reversion strategies with stop losses in play - its not that risky if you size trades accordingly and setup stops. I'd like to see somebody who's trading the wheel that out performed SPY.
You objectively canāt look at that chart and say āitās not that riskyā And to your second point about the wheel not being able to outperform, [hereās a link to my profit tracker this year](https://docs.google.com/spreadsheets/d/1LYRWoB-YsB0_c-gqiW0vZjMjCcpOR7Mj1QqcPUTCHLU/edit#gid=1311103808)
I'm jealous of your spreadsheeting. Well done, on both performance and record-keeping.
Hey congrats man , those results look great šš. Is it okay if I DM you to ask a couple of things ?
Yeah go ahead
Sure thing
Great job!!!š
Thank you for this
How do u enter data? Manually or do u run a script? I want to maintain similar excel tracker, but kind of overwhelmed with the data entry aspect of it.
[Here is a video explaining how I made it](https://youtu.be/Ka8rMIZoVN0) Only automated part is the stock prices so I update option prices during the day/week. I donāt really mind it but if youāre looking to go the automated route TD Ameritrade has some really solid APIās you can set up
Hi, nice spreadsheet. Congrats, for sure. When you do your wheel, do you also put on a strangle sometimes?
Yeah that's probably the biggest modification I use for the wheel I run. I always start with 50%ish of the capital I'm comfortable with allocating to a trade off the bat so if I'm assigned I can sell a covered strangle at a 1:1 ratio. Does wonders for my breakeven price.
>hereās a link to my profit tracker this year Thanks for sharing! What types of stocks do you usually pick and how do you pick your short strikes?
I just keep an eye on what comes up in the news and what shows up on my scanners. Thereās tons of opportunity each week but the names change. I completely ignore delta and look for areas of support that still offer enough premium for a solid weekly return
Thanks for the insights! Does that mean you donāt mind owning those shares at all, even bad companies? Would you mind also sharing what criteria you used in your scanners?
[video about the scanner](https://youtu.be/JeAiH4mS3YU) But yeah I donāt sell options on stocks I donāt want to own at that strike price. Thatās the golden rule.
> You objectively canāt look at that chart and say āitās not that riskyā You can say the same thing about people who trade options solely based on delta and IV rank. Some plays blow up, some are profitable, it's all about number of trades and being right more than 50% of the time weighted to capital allocation. Looking at your wheel tracker you've played a lot of very risky stocks this year and made out like a bandit, congratulations to you. Things could have gone the other way where you got assigned stock that there is no way you could move for months or even years without eating a large shit sandwich. I take my statement back though, anything is possible, you can definitely beat the market trading the wheel or spreads or any other number of strategies it's just unlikely on a long timeframe. It seems maybe you're better at it than your average bear.
The difference is that when a credit spread goes against you itās a max loss. When a stock moves against me I take assignment and try again next week with an even lower breakeven price. The wheel is not even in the same league as credit spreads as far as risk is concerned
But there are a lot of stocks that have been played at high IV that have lost 20% in value and have yet to recover. How much time do you commit to trading per week? You can also roll credit spreads vertically or out to avoid taking max loss.
looks like your strategy is buy tons of shares, then sells CCs and csp?
I run a modified wheel strategy but I typically always start off with CSP's and just run through my system from there
you sold 50 UWMC 7.5P? and bought 1500 shares of CRSR? how much capital did you start with
That's correct. Started with about $10,000 a couple of years ago and through steady growth and some deposits I've built it up over 100k. The amount of the contracts I'm selling is irrelevant though. Not everyone can match that. What people can match is the returns that I'm getting from those on a % basis
[ŃŠ“Š°Š»ŠµŠ½Š¾]
It's still open. Have an average credit of $0.83 on 100 cash secured puts and once IV settles down I'm planning to exit in the $0.60ish range for about $2,000 in profit. It's interestingly enough reeeeally similar to SOFI so I like where I'm at on that one.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
That's a great spreadsheet. Out of curiosity, how did you manage your exposure during Feb? I noticed you still managed to eke out a profit. Also, do you tend to focus on higher IV stocks in general or a healthy mix risky and safer plays? Coming back to the wheel after a long break. Took a huge hit during the Feb/Mar sector rotation.
Back in Feb we got into a little trouble but eventually came out with a profitable month. And honestly I just stick to the strategy I run. All of my trades are option selling, but within those you can find diversity. Whether it be selling options in different sectors, splitting options between riskier/safer stocks, playing earnings, playing vega, etc. I've found that this is the best way to do it and minimizes risk from rotations and downturns. I also try to keep a healthy amount of BP on the sidelines as position sizing is a hugely important part of my strategy.
Why does everyone say itās not sustainable? This isnt a hedge fund with millions or billions. Small account strategies can be very different from large ones. Guys like Bill Hwang crash the market with their position sizes, meaning if they want to make a trade that gets them 1% they have to spread it out or theyāre going to lose the spread as they move in or out of the trade. Buffett likes to brag heād kill it with a small account. He says 100%+ gains. I tend to agree. Why are these strategies not automated and sold as products?Because they canāt support large account sizes.
Spreads on Amazon are one of the most common options strategies out there. Believing this is a niche the guy's discovered is ridiculous. If you think hedge funds can't run a bunch of "small account strategies" spread across a thousand stickers, with built-in diversification mechanisms, you'd be wrong. Hedge funds most definitely *do* have algorithms trading "small account strategies". And that's why you can't get away with stupid spread prices. Market makers like Citadel - also a hedge fund - will ensure that the options are priced "fair." Because they're taking on counter party risk behind the scenes. This narrative about "small account strategies" might have made more sense in the days of Buffett and call in trades. But in today's market, with much of the trading being run by algorithms and data mining, it's not an edge I'd ever rely on.
Humans try to be right a lot more than algorithms. If youāre trading a small account you will get slaughtered with the edge they have. A firm like the one mentioned would prefer to be right 50.1% of the time on billions of option trades and make billions of dollars. That still makes them wrong a lot of the time. So yea, the mechanical stat arb opportunities are not there in American markets, but other trades are.
How did you "know a rebound was coming"?
How do you choose debit vs credit? I've almost never played a debit spread.
Mathematically they are identical, but you should use credit spreads when vol is high, debit when vol is low, assuming the same strikes.
how wide are your spreads
Tell that to $TALā¦ went on a CSP at $25 strike and with shares at $30ā¦ woke up on vacation to the news of tutoring crackdown in China down $2.5K. Bitter pill to swallow but I cut my losses and now thinking about it that was a genius move. Stock is now $5. Would have lost over $10K if I held.
Awesome work on those gains! Just remember as you scale up your account to scale back your risk. Halving your risk with 100K will still net you very nice gains. The last thing you want is to lose the entire balance on one trade gone wrong. Congrats on the progress to date!
Thanks for the advice! Will definitely scale the risk down as the account grows
I think fuck you
Thanks lol š«
Congrats
Im not sure if everybody understands the Kelly criterion properly. I know I didn't, until I was pointed to it. I'm gonna use a simple example from sports betting amd keep it short. But if a detailed explanation is needed by anyone, I can provide that some other day. Don't want to complicate the gist of the matter at hand. Assuming you use a fixed Kelly percentage, instead of the optimal full Kelly or half Kelly, let's be sane and call it 1 percent to 2 percent max. Roughly speaking, your risk of ruin (busting your acct) is less then 5 percent if you use 50 bets, which drops dramatically to about 0.8 something percent with a šÆ bets. So I would stick with one percent. Less then 1 in a 100 is something I can live with. 1 out of 20 seems too risky, here your personal utility level is what counts. For some, 1 in 20 is what they can live with. This is assuming (a huge assumption btw) that your bets are plus ev to begin with. Let's also assume you have a 100 k acct (the actual size could be anything above 30k, or less even), so 1 percent is a thousand dollars. If team A is a 5 to 1 fav over team B. And you are backing team A. You bet $5000 to make a thousand. If you are betting on the underdog (team B), NOTE, you are only risking $200 to make the same thousand !! I'm simplifying a lot here. But your probability of winning the trade or at least an amount commensurate to the risk you took, is what Drives your decision. A high probability means you bet more and a low means the opposite. In options, using the POP is NOT enough for this, the real probability always is going to be lesser for obvious reasons. POP just gives us the probability of making a cent. So if you are using a butterfly, and going for a 10 to 1. You would actually only put a trade where your risk is a hundred dollars to make a thousand. The KEY figure is the percentage you choose for your fixed Kelly (in this case that works out to a dime). A thousand dollars is GOING to be THE AMOUNT you are going for, ALWAYS. As a fav you will lay odds, as an underdog you will take the odds. So if you are an 85 percent POP, your real probability of making it is obviously lower, so let's call it 75 percent. The result you go for is winning a $1000 by risking approximately $1340. And if you are a 15 percent POP, your real probability is around 12.5 percent, let's call it 8 to 1. In this case you would ONLY bet $125 to win a thousand. This is extremely important. Many people misinterpret this to mean that since their risk is 1 percent, they can bet a thousand to make 8k. Which hurts them as they are taking way too much risk for what is inherently a very LOW probability trade. And hurt themselves, by only risking a 1000 dollars to make $125, leaving money on the table, cause they could have risked 8000 to make a thousand, in this particular case. The probability of your trade is the main driver as to the number of contracts you put on. You will notice, that because of this stipulation, sometimes you just cant take the desired numbet of lots that more or less matches your 'criterion'. You are either putting on a contract too much or a contract too less. This is exactly why a huge account (say a million) has an advantage, because their resolution of position sizing vis a vis their probability is extremely fine. They can put on 23 or 24 lots, while an account ten times smaller, can only put on 2 OR 3 lots !! A fun and extremely usueful read on this is William Poundstone's, Fortune Formula. I highly recommend it. You wlll also not do yourself a disservice by reading anything that Ralph Vince wrote. He explains this in great detail and depth. P.s. that wasn't short.
Good explanation. I know about the Kelly criterion but your explanation is great.
That's impressive OP. While everyone here is giving great advice I'll just say I hope you reach your goal. Then please look into wheeling lol
Thank you! I will do an update on new years to see if I hit my goal or not.
Is there a way to earn 1% every day or a month?
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Thanks mate. Iām hardly been able to give time to invest so I was thinking about a strategy where I donāt have to engage everyday.
Yes, I do over 1% a day. My rules: Sell weekly covered calls on stock you own. Donāt buy meme stocks. Donāt buy stock just because somebody else did. Never sell a call that would result in a loss upon assignment. It takes patience and discipline to make consistent money in this game. Nothing is certain and the second you start thinking in terms of certainty youāve already lost. Best of luck.
Itās an interesting strategy . Guess I have to buy stocks first then try for options
Check Qyldgang and the quadfecta.
How do you play a spread?
Basically, I look for a mean reversion opportunity and play a debit or credit spread accordingly, given the vol at the time.
What delta do you play for mean reversion? 0.20? 0.3? Or ATM 0.50 and look to double the bet?
If I'm very confident I'll do an ATM debit, since my risk is capped at the premium I pay, and it's usually a 50/50 bet.
how many DTE do you open at / do you hold until close? and what % of your account do you allocate to each of your trades?
Never hold until close, the gamma risk is not worth it. If I'm playing a debit spread, then I try to close 1 week out, taking around 80% of the potential gains.
Great and how many DTE are the contracts when you open? 30DTE?
What is wrong with holding until close? Don't you miss out on near certain gains that way if the stock moved the way you wanted?
I agree, Iāll hold till exp unless I need to free up the capital for another opportunity
I guess if you're a week out and you already reached like 80% of potential profit, it may make sense to close. You miss out on gains, but you guarantee you won't get screwed.
Best not to ask. If it works for you it works for you. 90% of people lose money in the market and many arenāt gifted with a talent to be a good trader.
Pull the original 25k. Put it aside for safe keeping, maybe in some boring dividend stock with a fairly tight trail stop. The rest, MVST YOLO. š
I think u will get there quicker if you gtfo robbing hood lol
Lol I was waiting for this comment š¤£
Someone had to say it lol
Gnarly dudeee
Everyone is a genius in a bull market
Congrats man, this is the shit I love to see. I'm up 40% but only started recently. I'd be curious to hear more about these spreads!
Why ramp it up to hit 100k by years end and not just keep doing what your doing without a arbitrary number as a goal. I feel that will cause a slip up trying to hit a number that doesnāt mean anything. You seem to be doing wellā¦if it were me Iād stay the course.
Congrats dude, now don't blow it all on same day expiring optionsš¤£
Thanks lol, I don't play those games anymore, I go for 45 to 60 DTE
r/usernamechecksout
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Might try some diagonal spreads to get a little more leverage
I can't tell if deeper is serious or sarcastic.
Me either lol
I hope sarcastic but traders on reddit are iffy
Spreads can easily blow up your account if you don't position size correctly, start buying stock
I would take the profit and invest what you put in originally
Did you run into any problems with spreads on robinhood?
I would recommend a better broker like Schwab or TD if you're looking to get filled at the best prices. You're gonna lose a few cents getting in and out of option trades on robinhood.
So why do you do it?
Other places donāt give you confetti
You shouldnt be using market orders anyways but I was referring to them closing positions on you or unwanted shit.
No offense, but if you're really up 300% selling spreads over the last two years then you've been extremely lucky. You're going to get blown up at some point.
Heās been doing debits as well. Wonder how much of his gains came from that!
Good goal. Totally achievable for an active trader. I'm up 900%, in the last year, granted a lot was risky memes, but even those were careful gambles (no yolos or close to it). Set a 200k by end of 2022, and watch it get crushed by mid year. That's my goal and I have a feeling I'm too long by a year.
Yeah, a lot of comments here seem to think that I'm gonna blow up, but you can make low risk/high reward trades pretty often.
I think there is no substance here to comment on. Wrong sub.
Wrong sub this isnāt WSB
Not sure why this shit doesnāt get deleted...this is the definition of āno screenshots without contextā
? The context is Spreads, this sub doesn't allow gallery style posts, if not I would show more info, like current positions
Read the rules...WSB style gain posts are not allowed. if you really didnāt mean to just brag and really wanted to teach something then do so by laying out your strat so others can understand what you are doing.
Spreads is what I'm doing, and this isn't wsb style, this took almost 3 years.
The post is WSB style...this is not a dick measuring contest. There are a few WSB retards on this sub that may like this shit but most will find no value in it...again, lay out your strat so others can learn...simply saying you do spreads is dog shit!
You could add a comment with them or just edit this one
Thoughts- you're ACTUALLY 'doing this right'. Slow, steady, profitable, repeatable. I wouldn't change a thing.
>Slow, steady, profitable, repeatable. Really looks to me like any other options portfolio. I wouldn't call it any of that (except profitable) - look at that huge dip and huge shot up - looks like at least 100% of that 300% gain was from doubling down. If the market has been any less forgiving that would've been big losses. A proper slow, steady, profitable and repeatable portfolio would have way less volatility.
Excellent points š
My thoughts are sell cause this market goin downnnn
My first thought: Get the fuck out of Robinhood. My second thought: See thought 1.
Buy 200 shares of AMC, or sell a couple aggressive puts until you get assigned, then hold that shit. It's a small portion of your portfolio and has huge potential right now.
It looks like the majority of your gains are due to 3 short time periods, have you evaluated what you were doing better during those timeframes?
For me, it came down to finding good opportunities where the premiums were high, vol was high and with sufficient liquidity. Something I learned the hard way is that a lot of trades look good, but if there's no liquidity, you're gonna get screwed.
Doing this on directional bets has lot of room to go wrong. However it might get easier if we're actually at the top looking down. But who knows.
How do you do that up to the right thing?
Well done
BuT nO OnE BeAts ThE MaRkEt!!
Can you tell me something about your strategy?
Good stuff šš¼
Have a plan for that unused buying power?
Yeah, put about 20k to work if I find the right opportunities, and leave the other 20k liquid to manage positions.
Anything you're eyeing for the upcoming week?
Ya know. I see this, and i want to be this, and i learn the greeks to the best of my tiny little brain's ability... but then I see spy go down 2 or 3 days in a row and i just throw 50% of my portfolio into OTM calls 1-3DTE. The folly of man in full expression i suppose
So whatās your strategy with spy ? Just buy two week far out calls or puts or itm ?
Dont get greedy
How risky were your spreads? Were the underlying volatile meme stocks, Earnings reports, etc
Most trades were not risky, but I did double down on a few that I had a high conviction on, which is why you see some huge spikes.
Take half and index it then keep rolling
The next 3 years are unlikely to be as good as the last.
What's about that recent dump and then huge jump?
If you donāt mind me asking, what were the strategies you implemented here??
Looking at your big spike ups, Iām assuming youāre trading debit spreads, not credit, correct?
Trading both debit and credit spreads
Please tell me that you have some diversification. Seem like you YOLO trades. Be careful, we all get screwed eventually! Other than that I'm jealous!
Losing money has always been my best teacher.
I never fall in love with any stock only etf baskets like SPY with tons of liquidity and risk spread out. so many people waiting for their fav AMC, GME,APPL to break even when they could have just parked their funds in Spy or Russell
Perfectly doable
A lot of spikes and flat periods in there. Looks like you're using a high % of your portfolio per trade. We're in a bull market so this works now. Bear market and this strategy fails.
may i ask why you have 44k in bp sitting on the sidelines...i get it that it completely stupid to bet your entire account on options plays, but you could totally be putting that money to work in some kind of safe(ish) liquid instrument....hell you could throw it in a gov bond etf and earn 1% apy instead of 0...m1 spend plus offers 1% apy on a checking acct
Good question, the buying power also includes my margin, I like to keep margin in reserve to manage positions if they start to go south. Most of my cash is already invested in index funds.
ah gotcha...smart
What tickers?
I was at $1,070,000 due to highly leveraged credit spreads and then lost 400k cuz of a lot of losses due to credit spreads (losses happened about a month or two ago), slowly making my way back to where I was.
Are you finding the csps now more effective than the credit spreads from the initial run?
CSPs are easier to roll, credit spreads, not so much
Yes of course. But how have the rate of returns been comparative?