Hi All, Have read the forums on and off over many years, never felt the need to post. This thread is dedicated to tracking results for my options portfolio, primarily selling premiums while hedging for total portfolio risk. Starting account Net Liq value for 2019 is $50,000 (slightly under by a few hundred dollars but you get the idea). A little about me: Mid 30's professional with a strong financial education background working in a non-finance sales industry. Most of my adult life I have actively managed my long term investments. Never had an opportunity to dedicate enough time to actively manage on a regular daily basis until recently. An accomplished poker player throughout my 20's with a comprehensive understanding of expected value, probabilities, variance, bankroll management, emotional control, etc. Many of your typical transferable skills into active trading. What you will get from this thread: My goal is to post positions I am entering/exiting, comment on strategy, and weekly running results. What you won't get from this thread: I will not post specifics on entry points, trade sizes, selection criteria, etc. Goal will be to keep the conversation on higher-level thought process and strategy and not in the weeds too much. Strategy: Collecting Theta and premium via (mostly) selling Verticals and Iron Condors generally targeting ITM probability of 22% or less. Position sizing will be 2-4% of Net Liq and no margin being used. Targeting DTE range of 30-45 and will look to exit positions well before expiration. Portfolio will consist of a mix of Index ETF and highly liquid stocks that have a strong correlation to SPX. Will manage a hedge position on entire portfolio to reduce tail-risk exposure. Goal: My decade+ of experience playing cards helps me keep my expectations in check. I will be focused on generating high-probability winners and managing losers quickly with sometimes very Deep OTM positions. Let's start by growing the account balance 2-4% monthly while keeping risk in check. -Poker Player
Adding Feb Trades to show where activity has been so far. There have been 22 positions so far (3 closed, 19 still open) spread across the following underlying. AAPL AMZN BA COST EEM EL GLD KO LMT MSFT QQQ SPY VIX 3 Completed trades +$144 Realized (100% Winners) 19 Open P/L ($16) KO put a hurt on the open P/L. Valuable lesson to get out of way of earnings no matter how far OTM and historic vol.
Short Mar 46 / Long Mar 43. I hedged to slightly delta negative when it hit $46. If it continues to decline I will exit. If it resumes it's prior range trading (Q2/Q3 levels), I will keep it open closer to expiration.
Broke through top of the trading range in early Feb + The support levels aligned pretty closely to 1.5 SD down. Also factoring in a long track record of hitting or surpassing quarterly earnings.
I do a few earnings options trades, although the way I look at it is not directional, but range based. i.e., what is the max range between high/low and low/high of before and post earnings. So far, the probability is around 65% success, no big losses. The big killer is commission for me right now.
I guess everyone has their preference, but I love selling the weekly options on earnings. This quarter hasn't been as good as previous quarters. Most positions worked out, but had a few big losers (XLNX, ANTM, GS, and one other one I don't recall). I only sell options on earnings that have weekly options. If the position goes against me and gets close to my strikes, I start hedging. If it goes in the money, I'll usually take assignment and then start selling calls or puts to get rid of the position with the goal of making the trade a scratch eventually. Some stuff just moves too fast and I get out (ANTM). Anyhow, I think it makes sense to play earnings sometimes if the IV is high enough. I usually sell pretty far out of the money, but will get more aggressive depending on my bias. Selling ATM calls on F, GM, and some homebuilders all worked out.