Thanks longandshort. I understand if you have a low volatility but positive expectancy trade you can lever up on it, but can you explain how you can lever up more than 200% of your cash buying power in stocks, ETFs, etc.? Thanks!
Yet you forgot to advise the OP how to do it. Not to mention he wants an automatic approach. I don't know, buying SPX weekly calls on Mondays with 10% AUM does seem to do the trick...
Actually the goal of the strategy would be to harvest the returns of dividend payers. You’re right in that the portfolio value would not grow that much y/y — perhaps in the 2-4% range, which on 4-8x leverage, would translate into a neat return. Is this actionable/feasible for an ET trader? Nope. The structure is true, but the hard part is actually finding a portfolio worth levering up on.
Here is another one: Sell Cash Covered Puts on AMC 4-5 strikes away. Stock is at 14.9, the 10.5 puts a month out sell for 60 cents. If you get the stock somehow, just sell calls on it.
There's an ETF that has a very similar strategy, PUTW. Unfortunately over the last 5 years it hasn't done all that well.
%% 5% or 7% per month can be done/SPXL/tqqq has done that plenty; but the BIG probleM is SPXL/tqqq has never been that good for 3 years/5 years/10 years........ And even SPXL % since inception is good but they managed to start it almost @ end of 2008 bear. Rule of 72 may help you, work 6 days a week 12 hours a day=72 I have lowered my risk on that same trade SPY+ SPXL , spy related @ same time. The good news is 50 trades /bid \ask, easy to beat that,per month\ dont trade anywhere near that much. With that plan , for sure withdraw 5% per month, because most likely account will not grow as you planned. Strange\ sometmes SPY, or sso, will beat SPXL/strange.................................................
In the last 14 months it worked. Probably time for another drop. Or wait for the drop and then start the strategy.