Options premium income. How much is too little?

beerntrading said:
There are so many dimensions to that question. If you're a market maker, even tiny premiums might make sense. As a retail investor however looking to turn 20% on a credit spread in a week is very possible.

It depends on what your strategy is and your risk tolerance.

Options are a really complex thing, and there's no such thing as a simple pre packaged answer.
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Nailed it. (":thumbsup:")

In particular, the OP does not mention actual liability -- what dollars are put up for risk?
Is this a sold naked option? Or a spread of $____ width?
The question in not answerable as it stands.

Howsomeever, I used to describe selling vertical spreads like this:
5%/week -- Heart Attack City
4%/week -- CBOE
3%/week -- Indianapolis (for the hometown crowd)
2%/week -- Asheville (roughly 500 miles SSE Indianapolis, vacation-y, but still connected)
1%/week -- Key West (another leg SSE, describing a nice straight line spectrum...straight to Margaritaville)

That was back in the day when a VIX below 13 was a big deal.

In 2017, 1% (what I've done this past year) feels really freaking AGGRESSIVE. (":wtf::vomit::wtf::wtf::vomit::wtf:").
As a measure of prudence vs engagement, how many times can you roll troubled positions?
If you start with $32,000, but only engage $1,000, you can double 5 times. 5 "parachutes". It doesn't take much imagination to turn that little metric into ~1% weekly return which, in a land of sub10 VXSTs, is........ really freaking AGGRESSIVE. [":wtf::vomit::wtf:"]²

"...Back in the day," weeklys provided fairly reliable income.
In 2017, I have learned to let some weeks "go by" (i.e., go unwritten); I have dipped into (debit) calendars; I have worked on analytic tools, ordered math books off eBay, written to old friends, GONE OUT TO LUNCH.

In 2017, you've got to understand that 1% is a pretty fair return.

{wiping brow, stuffing hanky into pocket, stepping down off stump...}
 
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