Selling Premium - Strategy Never Discussed

robertSt said:
I don't really care if the stock drops below the strike, so long as the drop is within limits. The only thing I care about is whether there is enough premium on future contracts to roll down profitably. I will often sell contracts at or even in the money to capture the greatest premium. If I need to adjust, fine, that's part of the plan.

But going against the conventional wisdom, I almost never want to hold the stock or take assignment. This is where I differ with the popular "wheel" strategy. I don't like being stuck in a stock that has dropped far below the assignment price. It's too hard to sell calls and then have to play defense on that side when the stock begins to rise.
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Don't have to get upset and thanks for sharing. Folks who cautioned you were well intentioned as there are more loser than winners in this game so it is helpful to hear them out.

I found there is a different mindset between professionals (money managers, IB, hedge funds) and retails. For example a drawdown of >50-60% doesn't bother me as a retail and I had quite a few such events happened to me (March 2020 was one by the way).

Someone I know very well trades full time for 15 years using a strategy similar to yours except he is even more concentrated: Only traded options on one stock, selling puts and calls on it over and over for 15 years.

There is more than one way to skin a cat. If it works for you and you are happy, it is your money, go for it.
 
ironchef said:
Don't have to get upset and thanks for sharing. Folks who cautioned you were well intentioned as there are more loser than winners in this game so it is helpful to hear them out.

I found there is a different mindset between professionals (money managers, IB, hedge funds) and retails. For example a drawdown of >50-60% doesn't bother me as a retail and I had quite a few such events happened to me (March 2020 was one by the way).

Someone I know very well trades full time for 15 years using a strategy similar to yours except he is even more concentrated: Only traded options on one stock, selling puts and calls on it over and over for 15 years.

There is more than one way to skin a cat. If it works for you and you are happy, it is your money, go for it.
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Who is the chosen one?
Is the stock AAPL?
 
ironchef said:
Don't have to get upset and thanks for sharing. Folks who cautioned you were well intentioned as there are more loser than winners in this game so it is helpful to hear them out.

I found there is a different mindset between professionals (money managers, IB, hedge funds) and retails. For example a drawdown of >50-60% doesn't bother me as a retail and I had quite a few such events happened to me (March 2020 was one by the way).

Someone I know very well trades full time for 15 years using a strategy similar to yours except he is even more concentrated: Only traded options on one stock, selling puts and calls on it over and over for 15 years.

There is more than one way to skin a cat. If it works for you and you are happy, it is your money, go for it.
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robertSt said:
Trade 3 - Sold to open 10 FUBO Feb 19 43 puts @ 1.40 credit
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Over the weekend I did some analysis, simulation using BSM and did some backtest with AAPL, GOOGL.

Under certain conditions (one of which is high IV), rolling up and out can work very well for covered calls provided you don't do it mechanically and you watch/manage your trade so the underlying won't run away from you.
 
I said this strategy works best if you are well-capitalized. I would never place anything like my whole account into one trade. Or even 10%. I didn't have so much when I started, and that's why I know that if you are forced to take chances by taking on only a couple or three positions, when they inevitably go against you and go long term, your account can become paralyzed.
 
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