Retired, 450k fun money, lets see what happens - SPY Options

[Wise Old Man]

+$1704
SOLD -12 SPY 100 19 MAR 21 387 PUT @1.42

 

[caroy]

+$1704
SOLD -12 SPY 100 19 MAR 21 387 PUT @1.42

Where are you at versus the index? Have you caught up on that 2 percent?

 

[topdog]

Where are you at versus the index? Have you caught up on that 2 percent?

Please disclose some statistics too.

 

[Wise Old Man]

Where are you at versus the index? Have you caught up on that 2 percent?

My net liq is $500,557.58, so currently up $44,439.46 or 9.7%. SPY is up 9.9% so I'm still slightly behind but closing the gap.

 

[caroy]

My net liq is $500,557.58, so currently up $44,439.46 or 9.7%. SPY is up 9.9% so I'm still slightly behind but closing the gap.

well done. thanks for the update.

 

[Wise Old Man]

+$2880

SOLD -12 DIAGONAL SPY 100 (Weeklys) 26 MAR 21/19 MAR 21 389/387 PUT @2.40

 

[qwerty11]

You will do much better than the SPX this year.

 

[Buy1Sell2]

I am confused; the wheel assumes assignment and instant calling away (weekly options). Are you saying cover the puts before they are exercised? Then it is not the wheel. Otherwise, I see your point. Even in a bear market, stocks can advance to be called away...granted one has to be a decent stock picker.

If one is a decent stock picker, then why do options?

 

[Buy1Sell2]

They are not short calls but covered calls if you have been assigned on the short puts. Then turn the wheel and sell puts if you are bullish. You need to join the theta gang. Www.Reddit.com/r/thetagang

Sounds like a simple strangle strategy with greatly reduced premium. Works 80 percent of the time.

 

[Buy1Sell2]

To clear things up - my goal is to be invested in the market and get a little premium on the side. If the market tanks, my account will tank with it. I'm bullish on the market and want correlated exposure to it.

My plan with this account is a bit different from the traditional way of running the wheel. I'm going to sell very short term premium at close to the money levels that I would want to enter if the market dipped a little bit. Once that dip happens and I get assigned, I'll sell covered calls where I want to take profits, expecting the market to bounce back up. If the market continues to fall and I can no longer sell covered calls above my strike price, I wait it out. If it doesn't recover right away, I'll be happily sitting on a beach, drinking beer and fishing.



I'm no stranger to markets and managing money. Having a goal of building wealth has always been a personal challenge of mine that I find exciting.

The problem with the wheel strategy is that once assigned, the call premium that you collect will necessarily be reduced from where it would have been had to just started out with a simple strangle.