Ah. That makes sense. One day this will bite you in the ass. Hopefully it won’t blow you out or you will be able to get out early. congrats on your performance however. Its equally important to manage your risk as it is to not be a pussy when the opportunity is strong and last four quarters was the best vol selling period in the last 12 years.
What happens if you get assigned say 2x? Will you just wire more cash into account and hold the assignment
Keep in mind that the 3.3x is spread over different maturities, but I would close options if I was facing assignment in excess of what I have. iBKR's algo would do that for you if you don't.
I agree. What would you do if you were in my shoes for the next 12 months? Net liq. Value is 13.6m today.
I think you said you are picking mostly illiquid options to sell puts on...might be why you might be getting assigned at a higher rate as long put holders finding it hard to get value for the put with wide b/a spread and making more money exercising.
Sorry to give you the bad news, ON, but selling puts is being long the market. His statement essentially works out to "if you're long the market, you're going to get punished."
Ahhh. Ohh well, was hoping for some positivism in the doom-and-gloom that is pervading the markets these past few months.
I am not sure this is correct. If I want to go long, I buy the underlying. Selling puts is a bet on stagnation in my view (neither long nor short).
Could you clarify nr. 3? Are you looking for special events when selling vol or is it a pure IV percentile/premium bet? Since you mentioned you assess events that the market got wrong by looking through SEC fillings I assume the former(?), or do you look through the sec fillings to look at their financial health/balance sheet only? Do you hold after the event has passed or do you sell after the IV Crush?
I'm not as leveraged like you, but I do something that works similar concerning due diligence/value/balance sheet. I steal from someone else!! The Royce Family of Funds...RMT, RVT. They will do many things that you do. I usually will wait for a correction, then buy individual stocks from their funds. I'll then do covered calls (just me). You have to be thick skinned to post here...If there is a hole, people will find it. You ready...A new Covid variant starts hitting and killing men and women in their 30s and 40s. Covid-19 hit more of the elderly/over weigh (in general). The Spanish Flu hit (killed) the young and healthy. Could they handle the claims? Do these companies cover life, property/casualty, and reinsurance?? If it's just life, you may want to dial back a bit...