So your strategy is something like this, then: 16 Sep 22/55d Put spread: +3750P/-3700P ($10 debit) Short put: -3425P ($20 credit) That takes roughly $8k in buying power and gives you a max profit of $6k - with a max loss of $336.5k. The most likely outcome (i.e., if the price at expiration is above 2750) is a max return of $1k on that risk. I fail to see how this is a 65% return on your money, unless you're doing something ridiculous like using buying power as a proxy for max risk.
I use futures, so I’m using span margin. I do use buying power as a measure of risk, and I’m usually under allocated from my maximum limit. I also use theta guidelines, since theta is also a measure of risk. Since I’m positive deltas, I limit the amount of positive deltas that I carry. The trade is extremely flexible, and can be managed together or separately. By example, when the naked put gets to 50% profit, I can close it and have a put debit spread hedge on for free.
"Capturing 65% as profit" seems to be double-speak for "I pay no attention to what the actual risk is as long as I can collect 65% of max return." Not all that surprising that you blew 50% of your account...
Not exactly. Ratios are spreads in which you buy or sell more of one strike than another, not three different strikes. This is more like a put ladder... not that names for odd/uncommon trades matter all that much; they change all the time anyway.
LOL thanks for the summary. Just selling puts till one blows up. You saved me 20 minutes of my life from watching the video.