If you are assigned to turn the wheel and sell calls.
Retired, 450k fun money, lets see what happens - SPY Options
- Thread starter Wise Old Man
- Start date
If you are assigned to turn the wheel and sell calls.
What if the wheel turns again and your short calls start to get ITM? Worse, with differences larger than what your long position(s) can cover? Better to take/fork over the money and start anew.
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
I don’t get it, your idea of enjoying retirement is to actively manage money? Why not just buy and hold?
Buy and hold is for the young, we do not have the time to wait for some bear market to recover. Plus this is a reason to get out of bed, I do not golf...
Discussion
The “Wheel” is a three-part option strategy that involves:
Despite the promise of three revenue streams and the promise of lower volatility associated with options strategies, not a single strategy outperformed the “single income” strategy of buy/hold on either a total or risk-adjusted return perspective. In fact, one strategy even went negative! Let’s take a look under the hood to see what’s happening.
https://spintwig.com/spy-wheel-45-dte-cash-secured-options-backtest/#Days_Till_Expiration
The “Wheel” is a three-part option strategy that involves:
- Selling cash-secured puts on an underlying.
- If/when one gets put shares, hold the long shares, and sell covered calls against them.
- If/when one’s shares get called away, return to selling cash-secured puts.
Despite the promise of three revenue streams and the promise of lower volatility associated with options strategies, not a single strategy outperformed the “single income” strategy of buy/hold on either a total or risk-adjusted return perspective. In fact, one strategy even went negative! Let’s take a look under the hood to see what’s happening.
https://spintwig.com/spy-wheel-45-dte-cash-secured-options-backtest/#Days_Till_Expiration
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.
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.
Keep in mind that SPY options expire Monday, Wednesday and Friday.
How about you just burn it man.