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Yes the numbers just don't seem support for hedging at all because you are capping your gains, so the protection the put will offer will not overcome the cost to keep adjusting. The relationship is skewed unlike with just a regular protective put that you just hold to protect a long position.

I think its garbage...it's manipulation.

No, you are making premium in both directions, and you recover any realized losses with the ebb and flow. You are also making money when the stock gets called out, if you ignore the break even at that moment. And that money reduces the loss from the assignment. I told you I ran the entire last...

Looks like spy etc will be propped up till after the election anyway..interest rates flat probably going down...economy will thrive...jobs etc..right out of the playbook. We'll see what November brings...

What do you call dividends then? This is the same thing...oh wait are MM taking back premium now? lol

What are you asking? LOL. I get the premium...who cares about spot price? https://seekingalpha.com/article/4629850-tsly-etf-best-move-to-avoid See TSLY is doing the exact same thing but with a synthetic long. I am doing it with actual shares. I basically figured out from my basement what it...

What do you mean? All of it. IWM

Whatever the ATM or $1 OTM price is...flexible. The point is, in this framework, selling a put isn't a bullish strategy, or a bearish one...same with selling the calls. I could tweak for directional probability if I want to but typically I don't care if assigned or not...it is inconsequential...

I am selling 1 contract $1 OTM strike every day. I am taking all assignments. I am realizing all losses. I am collecting all premium. Had I launched this strategy starting Dec.22 2022 I would had the following results on Dec22 2023 (incl all fees, spread loss, realized losses, realized gains)...

Only rolling for a credit though!

I added more days to my example. I am always selling put/calls with a strike that is 1 OTM so I am always getting 1 OTM premium which is about .65/.90 last I checked. When I get assigned I am taking a paper loss. When I get called out I am realizing that loss. I take the paper loss from...

Let's say 20% over a week? Ok so if I'm doing it daily 1 otm put, I sell a 199, and price drops to 190. Ok I take a ($10*100) $-1000 paper loss on the assignment. Day 2: Sell an 1 otm call and collect $65 Day 3: Sell an 1 otm call and collect $65 Day 4: Sell an 1 otm call and collect $65 Day 5...

You completely ignore the break even. Think of it like a dividend stock...you don't cash out just because you lost some capital on a downturn. You continue to take dividends and wait it out. This is exactly the same, I sell 1 otm puts until assigned, and then I sell 1 otm calls until called...

Yeah exactly, you may get assigned at a $-500 paper loss, but then you turn around and sell a call 1 otm and collect premium, then you get called out at $200 profit, so you have only suffered a $-300 realized loss. Repeat. I was looking rolling protective puts to try to protect the break even...

Yes there is, closing the option without taking assignment performs way worse than taking the assignment and continuing to sell premium. Whether I backtest 10 days, 90 days, 365 days, 1000 days the P/L is consistent with the same amount of contracts.

Those results were during the decline from $198 on July.31 down to $162 Oct.27 I tracked every day and accounted for when I would have been assigned at 1 otm, and when I would have been called out at 1 otm, including all the premium collected along the way.

All the big gains I have made came after holding losses...you never get the bottom anyway lol..its usually a legging in/averaging down process. There is no difference in the immediate between closing the put option for a loss, and just taking the assignment. If you started the wheel on July 31...

Ok I think this is what you are talking about... https://corporatefinanceinstitute.com/resources/derivatives/put-call-parity/ https://analystnotes.com/cfa-study-notes-explain-put-call-forward-parity-for-european-options.html#:~:text=Consider the following example:,the price of the put...

Is there any need to hedge if you just keep taking assignment of shares? If you ignore your break even when selling calls it would be no different than holding a dividend stock where in a downturn, you have unrealized losses but continue to collect dividends, except your dividends will be in the...

Merry Xmas everybody! Below is a short call, and a long put. Both are to capitalize on a downtrend. If the price doesn't move by expiry then the short call P/L is $62.30 whereas the long put is $-94. The price would have to move up to 203.06 by expiry for the short call to suffer the same...