Basically my strategies are Shorting Strangles/Puts on those most liquidity stocks/ETFs that prices above 50. The delta I choose are most less than 16 and the strike price is besides the recent support/resistant pos.
Since the market volatility has been stayed in a ultra low position for quite a long time, Evething seams to work pretty good. I get around 10% percent returns each month recently. The positive return days is around 80%.. But I know that Selling naked options is like picking up coins before a running train. So, what I can do to lower the potential risk during a rapid crush in the future?
What I am thinking:
1. Lower the leverage, trade small.
2. Spend some money to buy some insuracne, say long volatility products, VXX/UVXY..
3. Deversify my portofolio, decrease the correlation, not only sell US equities, but also index ETFS of other countries, commodities...etc.
I haven't been through crushs like 1987， but from the history data of crushs like 1998/2011, although the volatility reaches to a really high value, it still takes time, and it didn't get there in one day, so I wonder on that situation, do i have time to exit the market if i set a stop loss? say 3 times my premium? Or do i have enough time to play defense during a rush crush?
Or any other suggestions to lower the risk?
Since the market volatility has been stayed in a ultra low position for quite a long time, Evething seams to work pretty good. I get around 10% percent returns each month recently. The positive return days is around 80%.. But I know that Selling naked options is like picking up coins before a running train. So, what I can do to lower the potential risk during a rapid crush in the future?
What I am thinking:
1. Lower the leverage, trade small.
2. Spend some money to buy some insuracne, say long volatility products, VXX/UVXY..
3. Deversify my portofolio, decrease the correlation, not only sell US equities, but also index ETFS of other countries, commodities...etc.
I haven't been through crushs like 1987， but from the history data of crushs like 1998/2011, although the volatility reaches to a really high value, it still takes time, and it didn't get there in one day, so I wonder on that situation, do i have time to exit the market if i set a stop loss? say 3 times my premium? Or do i have enough time to play defense during a rush crush?
Or any other suggestions to lower the risk?
