Selling Premium - Strategy Never Discussed

Trade 4 - I didn't like the way PLTR was dropping into the close, so I gave back .62 and came down a point to 27. Now the idea would be to roll down for Feb 26 to strike 26 for a .30 or so credit, if need be, still yielding over 1% per week.

BTC 10 PLTR Feb 19 puts @ 1.88 debit
STO 10 PLTR Feb 19 puts @ 1.26 credit

Cumulative credit = .42
 
Bob, why don't you go long delta in short straddles? The PLTR Feb26 28 combo is trading 4.55. I realize you'll always roll losses, but you can achieve better results with the combo over the short put.
 
destriero said:
Bob, why don't you go long delta in short straddles? The PLTR Feb26 28 combo is trading 4.55. I realize you'll always roll losses, but you can achieve better results with the combo over the short put.
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Hey Dest so I can see how you are going to get better results with the Straddle above the market but what if the stock rockets higher well past the call. I presume he puts these trades on cause he is bullish.
 
getthatintoya said:
Hey Dest so I can see how you are going to get better results with the Straddle above the market but what if the stock rockets higher well past the call. I presume he puts these trades on cause he is bullish.
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Therein lies the rub, but he's rolled down three times. I would use a rule stating that the extrinsic prem on the combo must be =/> the put prem. IOW, the OTM callprem =/> 0.5(putprem). Say you're short $4.5 on that PLTR straddle. I don't have my screens up, but you stress it at neutrality and I'd bet the thing beats the short put at the combo strike (neutrality). obv the expected return will always be higher.
 
Trade 2 - Thread #258 - Rolled 10 GME Feb 19 to Feb 26 @ .52 credit. Cumulative two week credit = 2.03

I've made a boatload on GME over the past few weeks, so I can't complain now that it's behaving like a normal stock.
 
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