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Supplement retirement income
- Thread starter aplino
- Start date
Thank you for the link.
Age old question: All his wheels had worse performance than buy and hold SPY but the returns were all positive. His wheels did have better Sharpe (if I just eyeball the curves as I didn't want to join to get actual Sharpe)? Do I go for absolute return buy and hold SPY or better Sharpe but lower return doing wheel?
I am no money manager, so I would go for absolute return, least amount of effort, commissions, and fees. But if you try to time the market anyway(active investing), then the wheel becomes a natural way to combine “best of both worlds.” Of course adding discretion adds more uncertainty. Personal choice I guess.Do I go for absolute return buy and hold SPY or better Sharpe but lower return doing wheel?
The day before expiration trader sells a 10 delta out of the money SPX put (about 60 points away of the current value) and buys the next strike for a $25 credit. He does that twice a week, he wins 90% of the time and he doubles his money in 10 weeks. Not bad at all.
Now the expected value of the trade is 25*0.9-475*.10 = -25. Trader would loose 500 in 10 weeks. Does not look good anymore.
Is the opposite trade possible?
except in the real world the The prob is 96perxdnt, or it is 94
Try 80/20: Buy and hold the underlying using 80% of the fund and use 20% to trade options around it.I am no money manager, so I would go for absolute return, least amount of effort, commissions, and fees. But if you try to time the market anyway(active investing), then the wheel becomes a natural way to combine “best of both worlds.” Of course adding discretion adds more uncertainty. Personal choice I guess.