Selling Premium on ES

ES stuck at 4220. Think we can have a 10-15% correction soon, but should be at ath by year end. Wake me up when vol returns.

Plan is to stay the course...keep selling these 1-2 dte 50d puts equal to ~40% notional value of the portfolio if we get assigned. Once vol returns, I will sell some longer term vol in size. Even if vix continues to collapse, I should be able to return 10% with very low volatility.

Ideally with this type of strategy, it works great for people with a credit line or some kind of asset they can tap like a heloc or whole life insurance. Annual dd unlevered is about half of equities, but a few times per decade, it needs extra margin to hold positions through extreme volatility with a 2x leverage. Unlevered like I am trading now will have max drawdowns similar to equities, but with a lower break even point. By taking out a heloc and accessing it when needed can allow you to pump the returns without an increase in risk of total ruin. This is something to look into...
 
Sold a 4230 put earlier in the day expiring on Friday. Got assigned the 4220 put and sold the 4220 calls expiring Fri. As long as we stay above or near 4205, 2 contracts is enough for me to keep writing calls against. If we get a big expansion in IV, I can finally sell some longer term vol as planned. Maybe 10k in gains for June is back in the cards...

On the 12th or 13th, I'll post a chart of my returns and will do that the second weekend of each month.
 
Looking good so far, but there should be a correction soon. A lot of complacency means a 5-10% correction to resume climbing the wall of worry. Currently holding a short 4240 put expiring Monday.

Chart below shows my unlevered performance vs an equally weighted portfolio of the iShares Core Allocation family of funds, tickers: AOK, AOM, AOR, AOA. Only things I care about is having a better sharpe/sortino as I view the benchmark as the alternative way of passively investing my capital. Will update this every second weekend of each month.

I need to buy a house for my folks when they retire in a year or two. Afterwards, I will lever this strategy x2 and get a heloc on it to basically back my portfolio 100% when the extra capital is needed a few times per decade.

a=benchmark
U=my portfolio

upload_2021-6-13_21-47-51.png
 
ES stuck around the 4240s or maybe it's moving normally and I'm used to bigger and bigger moves like an addict needing a bigger hit.

Sold the 4240 put exp Wednesday. Vol will be here soon right...

On track for a 10k profit in June.
 
4240 put got assigned and was able to sell the 4240 calls against it for 11.5 expiring in 2 days so that's a good deal. Need a bigger dip for me to add another put; I don't like how far above we are from the moving averages. Rubber band is real stretched over here and would love to see some fear in the upcoming weeks.
 
Calls expired otm and the covered call essentially got cash settled due to quarterly expiration. Some nice vol coming in, but still paranoid about how far we are from the long term moving averages. Still wanted to add exposure so sold the Sep 17 4240 put for 162.5 and 3 3330 puts for 18.75.

RIP 10k June. Official tally $3312, time for the dollar menu.
 
So much for rangebound markets. Looks like we will keep grinding higher, distance from longer term MAs be damned. I knew I had to add delta but hate how risky we feel up here so I split the difference and sold another 25d put expiring on Sep 17. So current portfolio got:

0


Will for sure add more before Sep, but conservatively looking at 8% annualized (Jun 14 - Sep 17)if we stay at these price levels.
 
tnatrader said:
So much for rangebound markets. Looks like we will keep grinding higher, distance from longer term MAs be damned. I knew I had to add delta but hate how risky we feel up here so I split the difference and sold another 25d put expiring on Sep 17. So current portfolio got:

0


Will for sure add more before Sep, but conservatively looking at 8% annualized (Jun 14 - Sep 17)if we stay at these price levels.
More...

Don't add delta by shorting more garbage. You don't hedge by adding exposure. lol it feels risky so you short more puts. Brilliant. Truly champion stuff here.
 
Oh god Dest is here making me feel dumb as bricks. Let me clarify that it's risky relative to shorting a 50d put. Essentially, I'm using these as limit orders at laddered price levels and write more as the delta rolls off.

I get your point that it may be dumb to sell prem after IV has contracted and it's cheap. Maybe I should've bought a call or did some kind of spread. Time will tell.

I can also see why there's so much drama surrounding you LOL. It's all good though, thanks for dropping by.
 
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