Has anyone tried this strategy?

Discussion in 'Options' started by Marty L, Apr 19, 2020.

  1. ironchef

    ironchef

    What is that got to do with wheeling?
     
    #11     Apr 19, 2020
  2. Turveyd

    Turveyd

    Market is too risky to sell Puts, wait for a strong market.

    If the company your $20 puts you made $2 from 3months out goes bankrupt, you'll be $1800 out of pocket for each contract.

    Odds on a few airlines going bankrupt are high at this stage.
     
    #12     Apr 19, 2020
  3. ffs1001

    ffs1001

    Airplanes have wheels and cruise lines don't.

    Come on, get with the program ironchef :D
     
    #13     Apr 19, 2020
    ironchef likes this.
  4. ironchef

    ironchef

    Very funny wise guy! :D
     
    #14     Apr 19, 2020
  5. never2old

    never2old

    no wheels, what about just naked puts, can it be a profitable strategy?

    built in decay if not waiting it out to expiry, possible to close the option early - say 3mths to expiry, rinse & repeat

    example: on SPXL last at $36.84 (low YTD ~$17.50) sell to open a deep out of the money long naked put $18 strike price October expiry pays $1.80 on money at risk, downside to break even $18-$1.80 = $16.20, at $18 buy to close the position.

    https://www.barchart.com/etfs-funds/quotes/SPXL/options?expiration=2020-10-16

    doing this with full cost, no margin, $1.8/$18, that's 10% for 6mths or 20% annualized.

    would this be a good trade?

    with enough available cash, could also add a ATM covered call October expiry.
     
    Last edited: Apr 29, 2020
    #15     Apr 29, 2020
    • Wheel is a good name for that strategy.
    • Lots of work and you don't get anywhere financially - your broker would like it though.



    [​IMG]
     
    #16     Apr 29, 2020
    systematictrader likes this.

  6. Hahahah
    Nice one
     
    #17     Apr 30, 2020

  7. Less than 1% of traders understand that, but dont forget if dividend is involved the puts are more pricey, to a noob at least it will look that way
     
    #18     Apr 30, 2020
  8. Marty L

    Marty L

    I'm investing in Delta right now but also looking at selling a put on Alaskan Airlines as well.
     
    #19     Apr 30, 2020