Discussion in 'ETFs' started by AndersenBands, May 3, 2018.
I put together a Jim Prince setup to compare my Blue Bunny setup to for swing trading.
I streamlined my screening process.
Look for an optioned equity with a recently-completed, valid fractal.
Buy undervalued, sell overvalued. Don’t lose sight of the long run for big profits. Fractals are pivotal points and are the most important at major trend changes.
I decided that vertical spreads are usually a bunch of shit. You always have to wait on vertical spreads when there’s not a strong trend and you have to be just right and you often seem to get the shaft. DITM LEAPS calendar spreads/diagonal spreads/poor man’s covered calls and puts seem like a safer deal to me. I may not get very rich with them, but if I have no losses and make at least double-digit returns per year they are a much better deal.
I put together a system for diagonals.
I figure on doing basically a David Jaffee, John Broadhouse, Alan Ellman PCP strategy, sell poor man's covered puts, don't get assigned if I can help it but if I can't help it I'll keep the LEAPS puts and buy the shares and sell them at a profit on a covered call, repeat.
Also known as the wheel, the wheel trade, the wheel of fun, the wheel of fortune.
LEAPS double diagonal spread strategy: Buy high puts and low calls of the maximum LEAPS contract. Anything else is false economy. Sell high calls and low puts of the most reasonable nearby contract that you shouldn’t have to roll vertically before you have to roll it horizontally. Anything else is false economy. Should be over 70% PoP, preferably quite a bit more. Make your sales for a little over 1% of the long position price. Try to make 1% every two weeks and thus 26% per year or a good chunk of that. Don’t fool around with something without weekly options and lots of bids. You have to go onto the tastyworks curve to see the whole option chain on some equities because the tastyworks option chain table has only rather close-to-the-money contracts. Keep track of your breakeven prices and such and if you can make a decent profit on a spread without rolling, take the profit, and if you must roll to avoid locking in a loss, roll. Don’t goof up by ordering the wrong thing and have to go through the bid-ask spread to get out of it.
After searching for prospects, I decided to just go to the tastyworks High Options Volume list and check out if those equities will make me a profit, starting with the highest IV Rank.
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