Selling OTM CSPs and wheeling very high IV stocks

[tonyf]

This seems to be Reddit's favourite option play, closely followed by credit spreads.

How profitable is the CSP/wheeling strategy? People seem to allocate money across the board without looking at the underlying. Are option traders actually taking a view on liquidation risk?

 

[Bastion_01]

lol, 99% of the guys at reddit/options have no idea how vol trading works. They're gonna get slowly bled to death by their brokers, who probably love the trade since it racks up plenty of commissions.

 

[tonyf]

loads of winners like this one are behind that buzz:

https://www.reddit.com/r/path%3D%252Fr%252Fthetagang%252Fcomments%252Fpeg388%252F

 

[newwurldmn]

Stick to what you are doing. It’s been earning.

 

[tonyf]

Stick to what you are doing. It’s been earning.

It's been dry for 3 months now when this guy is killing it: https://www.elitetrader.com/et/threads/my-awesome-trading.360906/

 

[ajacobson]

When I worked at oX/Schwab it was the most popular credit trades for accounts open 12M+. Could only track openings. Irons got loaded in with them.

 

[qlai]

How profitable is the CSP/wheeling strategy? People seem to allocate money across the board without looking at the underlying.

Is this a rhetoric question coming from you?

 

[JSOP]

This seems to be Reddit's favourite option play, closely followed by credit spreads.

How profitable is the CSP/wheeling strategy? People seem to allocate money across the board without looking at the underlying. Are option traders actually taking a view on liquidation risk?

Oh so this is why ET is now littered with traders who think the wheel strategy is the Holy Grail. It's all Reddit's fault. LOL

 

[qlai]

Oh so this is why ET is now littered with traders who think the wheel strategy is the Holy Grail.

Well, selling CSP and the wheel are essentially a buy-the-dip strategies which has been working quite well.

 

[JSOP]

Well, selling CSP and the wheel are essentially a buy-the-dip strategies which has been working quite well.

buy-at-highter-than-the-dip-and-don't-give-a-shit-if-it-falls-to-abyss strategy, yes. It is working well now because the Feds is printing money to keeping it from falling. Once it stops printing and it is starting to think about tapering, then I hope this is not going to trigger another financial crisis in 2008.