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

[vinc]

I've been waiting for this day for a long time. After 40 years work, I threw in the towel to enjoy retirement. I've got a nice 450k saved as I have more than enough savings and passive income from real estate to pay my bills.

I'll be running the wheel on SPY. I've never made one of these journals before...

how did you manage to come into possesion of any real estate with a gambling menatlity??
this is more interesting than this BS journal..how did you arrive at 450k of 'fun' money again with gambling mentality? people who work hard never refer to any money they made as 'fun' money.. did you inherit this or win a lottery?
and if you for real than a sreenshot of bank acc. would be in place since you already mentioned
the amount.. but we won't see it, right? mostly because of an old age you don't know how to make one
quit trolling,man !

 

[MarkBrown]

There’s more than one way to skin a cat. Assignment isn’t always a bad thing. For someone who worked for the “worlds biggest options trader”, I’m surprised you don’t understand this.

it's not like you laid a plan out for us - i can only go by what you post here.

i'm sure you will let us know how you navigated out of it and saved the day after the fact.

and oh btw i did post when you sold those puts you should have sold the calls the timing was perfect and you did the opposite. perry kaufman's book smarter trading page 140 the efficiency ration will tell you when a move has run out of steam.

the pink bars are option expiration day.

the band is the 21 day moving average with a 2.5% above and 2.5% below band

rules when the close is above or below the upper or lower band you start counting days.

it tells you how long on average you can expect the price to float above the center average.

the lower indicator is perry kaufman's efficiency ratio it clearly shows you strength of whatever your trading and you can see you sold on a high spike. you have to learn to do the opposite of what your feeling tell you, if you going to sell options.

here is the print out of the band results

and yea i did really work for the worlds largest option trader the late Stan Finney.

 

[TimtheEnchanter]

Owning SPY at the top of its trading range is not wise. If you are planning to dump it right away, you may or may not be able to as it is Friday, and the aftermarket trading is not as efficient. Should we have a big sell-off on our hands by Friday, your SPY position could be in trouble, I am not saying it will happen but I had $50000 in covered calls right before July mini-crash. I took a $5000 haircut. Granted if I just stayed the course all would have been better. Will you stay the course? You'd be long much more than 50k.

 

[Wise Old Man]

it's not like you laid a plan out for us - i can only go by what you post here.

i'm sure you will let us know how you navigated out of it and saved the day after the fact.

and oh btw i did post when you sold those puts you should have sold the calls the timing was perfect and you did the opposite. perry kaufman's book smarter trading page 140 the efficiency ration will tell you when a move has run out of steam.

the pink bars are option expiration day.

the band is the 21 day moving average with a 2.5% above and 2.5% below band

rules when the close is above or below the upper or lower band you start counting days.

it tells you how long on average you can expect the price to float above the center average.

the lower indicator is perry kaufman's efficiency ratio it clearly shows you strength of whatever your trading and you can see you sold on a high spike. you have to learn to do the opposite of what your feeling tell you, if you going to sell options.

and yea i did really work for the worlds largest option trader the late Stan Finney.

I'm primarily looking for unleveraged growth correlated to the SPY. That's why I'm okay with assignment. As I said in the beginning, if the market tanks, my account tanks with it. But given the fact that all the trades are covered or cash secured, I don't have the same consequences as I could from selling naked.

If we see another selloff like we did in March, this journal will be very inactive. If things go against me, I can wait it out as long as I need to. If I'm selling naked and get a margin call, it's impossible to meet that in an IRA. That's why brokers don't allow uncovered options in IRAs.

Again, we're comparing apples to oranges here. I'm not saying your strategy is wrong for you, but it's definitely wrong for me, given my risk tolerance.

 

[Wise Old Man]

SOLD -13 DIAGONAL SPY 100 (Weeklys) 27 NOV 20/20 NOV 20 346/348 PUT @.76

I rolled the puts forward 1 week and down 2 bucks for a $988 credit, less commissions. Had I waited until the end of the day to sell the puts, I would have taken in about $1200. But I'm not here to time the market. Hindsight is 20/20.

 

[horizon]

Thanks the update.

 

[deltaf0rce]

SOLD -13 DIAGONAL SPY 100 (Weeklys) 27 NOV 20/20 NOV 20 346/348 PUT @.76

I rolled the puts forward 1 week and down 2 bucks for a $988 credit, less commissions. Had I waited until the end of the day to sell the puts, I would have taken in about $1200. But I'm not here to time the market. Hindsight is 20/20.

I like it... weekly in here suggests you may get a range for a couple weeks which is kind of in line with current events.

 

[Wise Old Man]

Rolled forward another week to the 12/4 347 puts for a $949 credit
SOLD -13 DIAGONAL SPY 100 (Weeklys) 4 DEC 20/27 NOV 20 347/346 PUT @.73

 

[qlai]

Have you thought of splitting up your sells? For example selling 1/4 worth of 30 DTE puts every week(or 1/8 60DTE, etc). This way you have puts at different strikes as the market moves around. I think it gives a bit more flexibility.

 

[Wise Old Man]

Have you thought of splitting up your sells? For example selling 1/4 worth of 30 DTE puts every week(or 1/8 60DTE, etc). This way you have puts at different strikes as the market moves around. I think it gives a bit more flexibility.

I've thought of it but decided to keep it all about a week out to take advantage of the short term swings in the market. From most of my backtesting, I will earn more in premium selling short term than pushing the expiration further out in time. I gain more exposure to downswings in the market but my goal is to have market exposure, so I don't mind that downside risk.

My whole basis of this strategy is get long shares on a small 3-4% pullback and take advantage of market appreciation. Right now the entry that I'm comfortable with is right around 346-348 in the SPY. If I get the pullback I'm looking for and get assigned shares, my plan will be to sell covered calls at around 364 (the prior high). While I'm waiting for the market to pull back and I get assigned shares, I'll be happily collecting $900 a week in premium.