I used to be a premium seller,sell an at the money straddle ,keep it at the money,and 17 out of 20 days a month,it'll erode, those 3 trend days a month,it 'll blow up ,so the odds of making money were a no brainer, you had to figure out how to protect yourself on those 3 unannounced days each month,plan a,you made enough to cover it,plan b,you made more on those days,his scalping technique sends him home flat each nite,no risk,as long as he's not too close to expiration,the beauty is he never picks a direction,he lets the market pick it for him,if he decides to take a day off or a nap, he's always neutral..he went from paying market maker commissions and haircut to retail and he has adjusted accordingly
as others have posted, he is basically writing short strangles which work until theres a big move. with the stock accounts, it sounds like he's making markets (which is short gamma). with the options he's selling he get's even shorter gamma. being short gamma is fine until a move occurs. i suppose if he's using millions of dollars to make a couple bucks this will always work.
As several have stated, a covered put in one account and a covered call in another nets out to be a short strangle. What's so whacked out about this is the margin for doing it this way. For example, the margin for selling a naked 75p/125c strangle for 2 pts on each side is $1,000. Do that as a CC and a CP in two different accounts and the margin is $4,800 in each acc't (50% equity margin is reduced by the premium received). Same risk but 5X the margin. Sheer genius!
Theres more to it. I bumped into him again, seems he uses the one account to go both long and short on the same stock as well as writing options. Says the margin gets flattened by the opposing positions.