The Wheel on ETFs
- Thread starter Pekelo
- Start date
I saw this post on Reddit, but it seems quite flawed and I’m really not sure what new it brings to thousands of wheel variants already discussed and used out there.
It also doesn’t explain that a covered call is identical to selling a naked put at the same strike, so the whole strategy is identical to selling naked puts at all times.
But the main issue is that he takes an approach from 20 years ago when people could only theorize because they couldn’t perform backtests. Now anyone is free to provide results of a backtest with very specific results/metrics. Why talk and speculate instead of actually testing the theory over at least a 10 year period.
It also doesn’t explain that a covered call is identical to selling a naked put at the same strike, so the whole strategy is identical to selling naked puts at all times.
But the main issue is that he takes an approach from 20 years ago when people could only theorize because they couldn’t perform backtests. Now anyone is free to provide results of a backtest with very specific results/metrics. Why talk and speculate instead of actually testing the theory over at least a 10 year period.
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True. Here's a backtester that's fun to play around with, from ET sponsor: https://info.orats.com/backtest?hsC...baec0ad3|43fc7a53-de80-4f54-a526-2a7e1637be00
There are several etfs that probably come close to duplicating this strategy. As you can see from PBP it tends to out perform during flat/down markets, but lags during strong up markets.
You might get better results if you were somehow able to predict large downturns and bull runs and wrote farther ITM or OTM at the right times. But if you could do that then there are more profitable methods.
You might get better results if you were somehow able to predict large downturns and bull runs and wrote farther ITM or OTM at the right times. But if you could do that then there are more profitable methods.
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