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No problem. :) So what's the play here? Short it? Bear call spread? Bear put spread? Long puts? Some vols thing? Parity? If I read the Option volatility and pricing can I get an invite? ;)

OK so how do you manage the long puts? Do you wait for your shares to be called away and close them? Do you adjust them along the way? Stock trading at $20 Sell a put at $19 Buy 2 protective puts at $19 (3 months out) (.50 delta) Get assigned at $19 Get called away at $10 Position lost $9...

I'm "taking" assignment because its my choice whether to accept the shares, or close out the position...unless I get an early assignment. If I say, "sell puts and get assigned" doesn't stress the fact that I am planning to accept the shares as an integral part of the strategy. Same difference...

I will have to double check these results, but this is what I got when selling 1 OTM starting on DEC30 2022. IWM 1 contract (Weekly) Funds allocated $17,436.00 Total Premium $5,755.00 Total Realized losses -$6,600.00 Total -$1,223.48 Total Spread loss/fees -$437.25 Net Income -$1,660.73...

When I look at IV on tos it only ever gets as high as 30%? Yes I would basically just sell ATM spreads with the idea that they will finish otm, but will take assignment versus closing for a loss. How about selling puts on IWM and RWM and just collect both premium, then turn around and sell...

Well basically you can't hedge a wheel strategy whether with an inverse etf or a protective put, the numbers just don't work...at least according to my spreadsheet. The problem is with either strategy, you are realizing losses when you have your shares called away. You just can't over come this...

hang on I'm going to run the numbers again rolling a weekly 80-90 delta put option.

Geez did Santa leave you coal in your stocking or something? Options aren't cost effective as a hedge for the wheel strategy because of the delta...I want 1:1. I don't think they would even work for the wheel strategy because you are realizing losses daily or weekly, so would have to keep...

Should it be settled daily and opened again to reset the hedge? Apparently there is risk of inverse and leveraged ETFs underperforming their daily return targets when held longer.

Why go through all the hassle? Just take 100% of the premium by taking assignment and hedge it.

Ok so turns out the above results are unsustainable since the system breaks down if you go out far enough. (D was correct) So here are the new results I get with hedging if I started the wheel strategy on DEC30 2022 ending DEC27 2023: Selling 1 weekly put 1 OTM taking all assignments and...

I don't know man...the notational value I use for returns is how many 2008 Lambo's they will get me. :)

No it isn't. All margin means when you actually have the capital to cover your trades is how much extra money you have to trade with. Until you have used up your cash it is irrelevant. The cash at risk was about 18k. The profits were 16k. Do what you want with it. Honestly capital at risk is a...

OK I'll write it like you would. The worst week last year would have been: Max 1 week DD 191 Mar6, 175 Mar15, loss $-1482, Premium $631, realized gains $116 results in net realized loss $-735 Premium calculated from date assigned to date called out.

The cash capital at risk in the trade is around 18k and any given time. The margin is irrelevant because I have not exceeded my cash available...it's a cash trade.

I'm using the actual capital I am putting at risk.

D...see below. I tallied up every transaction on a spreadsheet for last year and these are the results. There was a huge drawdown last year from $199 to $162 so that is baked in the results. Margin account, but have the cash on hand to receive assignment. Max overnight drawdown see my...

Ok here the results if you ran the wheel strategy starting Dec.30 2022 - Dec.22 2023 selling 1 contract OTM weekly versus daily, taking all assignments. Weekly results: Realized losses = $-3257 Premium collected: $11,150 Net profit: $7893 Monthly income: $614.38 Return on capital: 43%...

I suggest getting really familiar with the platform before doing live trades.

Yes, because if you are selling everyday you will not suffer a huge drawdown all at once, and are collecting premium and called out profits all the way down to offset the losses from assignment. I ran the entire year and the net from assignment losses + called away gains was -$1200...plus all...