You might be overthinking this. Here is the trading plan. 1. I'll sell cash secured weekly puts on the 3x bull index etf TQQQ at a 30 Delta strike. I'll sell when the market dips on mid day Monday. If there isn't a dip mid/late day Monday, the risk of assignment is too high and I'll wait till the next week. I'll repeat this process each week until I get assigned. The object here is to simply collect the premium credit without getting assigned. I'll generally hold till they expire at the end of the week. 2. If I was assigned, I'll open a short position in MNQ at the rate of, as of now, 1 contract for every $60k (5 x $11,958) of TQQQ I'm now holding from the assignment. This is then a 0 Delta balance to 'lock' the position so if the market continues to drop, my position will hold value, within reason. I 'locked' the position so I can now sell covered calls against my TQQQ holdings. If TQQQ rises to near my cost basis, the price I was assigned at, I'll buy back the MNQ short at nearly what I sold it for. I'll set a standing order to automatically buy back MNQ if the P/L hits 0. I'll never hold the MNQ short if TQQQ is at or above my cost basis. The point here is to collect the premium credit from selling 30 Delta weekly calls. If the market falls, the MNQ short allows me to sell calls at a strike below my cost basis by offsetting the difference between my assignment price and the strike I'm selling. I'll sell the calls Monday mornings when the market is peaking for max credit. The latest I'll sell is Tuesday because I don't want to give up too much Theta. I'll generally hold till these expire. I'll keep doing this until my TQQQ gets called away. 3. If my TQQQ got called away, go to step 1. The idea is to make money from the credits without really caring what the 'price' is doing. This all sounds like chasing pennies, but it actually adds up faster than you think. 2% per week is a 100% per year. And yes, I know we've all trophy trades where we make bazillions, but I'll bet you gave most of it back over the time that followed.
This won’t work the way you intend it to. You cannot collect vol premium without taking price risk. There are also a ton of moving parts that you don’t understand. Finally you are fixated on being right vs making money. It’s an easy trap to fall into.
My last response. I've stated why this is dumb, but you're stubborn and watched a youtube on The Wheel or are a proponent of the capital markets success/abject degen trading failure: Sosnoff. You're going to time the market; wait a week if you don't get this qualitative drop? Doesn't seem like much of a system. lol 2% per week. Anyway, GL to you.
Less confusion if you close your long TQQQ position and keep MNQ out of your plan. You're short a naked call either way.
Can you elaborate on this? It sounds like a sort of "would you rather be right or happy?" which is what my narcissist mother says to me to try and agree with her when she is wrong. Whenever I hear this my bs detector screams. I do not understand how this is applicable in trading. How can you make money if you're wrong? How do you make money being long if value is dropping? Trading is predicting. How can you make money wrong?
Since you based it on relationship dynamic terms, I'll give you an example: taking the risk of trusting people in your life to whatever degree your perception says to has a huge positive return - that's what it takes to find love, friendship, and every other sort of good relationship (not doing so leaves you with a life that sucks ass.) However, stick a skilled sociopath into that dynamic, and you're fucked... So: do you face up to the danger of the latter in order to get the outcomes you want, or do you spend your life hiding under the bed so you "can't get hurt" because "there are bad people out there"? There's no third alternative, because "being more careful" still relies on your people-reading sense. Trading works the same way (although there's the huge benefit of no "evil counterparty"; instead, there's systemic risk - which I see as a highly preferable alternative.) Do you take rational risks even knowing that crashes/huge vol can come along out of nowhere and hurt you really badly, or do you "hide under the bed" - not trade, or just stick a trembling toe in the water once in a while and run away if there's even a hint of taking heat? You CANNOT trade by that latter "method" and expect any sort of positive outcomes. If you can't estimate the rationality of taking a specific risk and then doing it - again and again and again, despite any temporary losses/reversals, until the law of large numbers kicks in - then you can never succeed at trading. It has nothing to do with "making money by being wrong." It's about being fixated on a danger that you overestimate for emotional reasons so that you miss the opportunities in "good" risk.
Well, all of your babbling baboon platitudes are really entertaining but I am making money doing this now. 100% year might not be a lot for you trading Gods that are obviously already trillionaires, but I'm happy with it. The only reason I'm talking about adding MNQ to the mix is because I'm about to increase the amount I commit to this. I, unlike most of you, actually have money to trade. You people shoot for the moon using lunch money. Total joke. Go buy yourselves a happy meal and leave the adults alone.