Wheel strategy un hedged

[taowave]

You are using margin for the denominator in calculating percent return??

D...see below.








I tallied up every transaction on a spreadsheet for last year and these are the results. There was a huge drawdown last year from $199 to $162 so that is baked in the results.

Margin account, but have the cash on hand to receive assignment.

Max overnight drawdown see my quote above.

 

[wxytrader]

You are using margin for the denominator in calculating percent return??

I'm using the actual capital I am putting at risk.

 

[taowave]

As in the margin requirement

I'm using the actual capital I am putting at risk.

 

[Slow Learning Elf]

As in the margin requirement

Yeah. It’s a reasonable approach since you could never lose more than the margin.

 

[wxytrader]

As in the margin requirement

The cash capital at risk in the trade is around 18k and any given time. The margin is irrelevant because I have not exceeded my cash available...it's a cash trade.

 

[destriero]

D...see below.








I tallied up every transaction on a spreadsheet for last year and these are the results. There was a huge drawdown last year from $199 to $162 so that is baked in the results.

Margin account, but have the cash on hand to receive assignment.

Max overnight drawdown see my quote above.

I ignore anything longer than 20 words.

 

[taowave]

When you tell someone what your return is,the denominator is very relevant

The cash capital at risk in the trade is around 18k and any given time. The margin is irrelevant because I have not exceeded my cash available...it's a cash trade.

 

[wxytrader]

I ignore anything longer than 20 words.

OK I'll write it like you would. The worst week last year would have been:

Max 1 week DD 191 Mar6, 175 Mar15, loss $-1482, Premium $631, realized gains $116 results in net realized loss $-735

Premium calculated from date assigned to date called out.

 

[wxytrader]

When you tell someone what your return is,the denominator is very relevant

No it isn't. All margin means when you actually have the capital to cover your trades is how much extra money you have to trade with. Until you have used up your cash it is irrelevant.

The cash at risk was about 18k.
The profits were 16k.

Do what you want with it. Honestly capital at risk is a misnomer. Capital at risk is only relevant when there is substantial risk...it's more return on capital.

 

[taowave]

So its return on notional...

No it isn't. All margin means when you actually have the capital to cover your trades is how much extra money you have to trade with. Until you have used up your cash it is irrelevant.

The cash at risk was about 18k.
The profits were 16k.

Do what you want with it. Honestly capital at risk is a misnomer. Capital at risk is only relevant when there is substantial risk...it's more return on capital.