I'm new here, so I feel a little obligated to tell you a little about myself before we get into it. I'm 39, I live in Indiana, and I am a truck driver, but not a road dog I'm home most nights at least for a few hours. I've dabbled in trading for while now. I opened a Robinhood account in 2017, a Schwab account in 2020, played with FX some but don't anymore. I'm a small trader, I have around $75K across 4 accounts and I do okay. Since Oct. 2024 when I started with Schwab I've averaged a 13.31% annual return. It started with $36.5K and gained $22.7K and only contributed an additional $1500 over that time. (I pulled all these numbers from the Performance page of my account) Robinhood has really been more of a FIFO account, its all over the place and doesn't have a nice performance page like Schwab. Okay, all that out of the way. Since about February I've consolidated into one style of trading. It started off as a Wheel Strategy, now I just stay on one side either calls or puts. I guess that's still a Wheel Strategy, but Wheels get so much hate so lets call it a Simple Options Income Strategy. After picking a stock I want to use I have a target of 20% or 1 year. At that point I just reevaluate whether I want to continue trading or find another. I just go off of premium, I don't mess with the Greeks even though I admit I should. I start with weekly options and target 0.5% minimum. When I get forced into rolling situations I just roll out until the next step is at a profit. I try to keep my options under 3 months, but that's just a guideline. As of today I have a +$7098.86 (12.79%) in Schwab and a +$2445.31 (20.42%) in Robinhood. I have positions in TSLA, IWM, AFRM, HOOD, HIMS, SQ, CLSK, and SNAP. I have a least 2 closed positions (my record keeping in the beginning was a disaster, I have mostly fixed that). All positions are positive, meaning I'd have at least some monetary gain if I was assigned today. I have 2 contracts expiring Friday, SQ and HOOD. I mostly trade on Fridays so I will come back then and break down what I did and why. Comments and criticism is good. I'm not claiming this is the best way to trade, its just the way I like to trade. I'll be back Friday.
Wheel strategy is all option traders on YouTube talk about. Like I mentioned it works until it doesnt....once the stock has a set back crawling your way for a premium selling calls above where you were assigned gets very difficult. .....none of those that show you the wheel strategy ever show you what happens once it doesn't work...I have yet to come across one video...
I don't have a video, but I did buy SQ on 3/15/24 for $80.96. It dropped until hitting a low of around $55 on 8/5/24 before coming back. My adjusted stock price on 8/2/24 was $60.42. Lowest strike was on 8/9/24 when I sold the 8/16 $63 Call.
Okay, first week of trades in the trade journal, let's start with my mistake. On Wednesday I realized I had a math error on my overview sheet of all my positions. I track each position on its own spreadsheet so it's easier for me to see how each one is doing and on one sheet I have every position so I can see how everything is doing at a glance. The overview sheet has ROI of the positions but the calculation was going off the option strike price and not the cost of the stock. So I thought I was close to my 20% target on SQ when I was really at around 17%. I had an 11/15 $67.50 Call on SQ and a 10/18 $67 Put, the Put was just to add a little extra income to the position and I was going to keep rolling it until 11/15 and just let the position go. That went out the window, I bought back the Put and rolled the Call to 1/17/25 $70. Those two trades netted $62.91 in Premium and as long as SQ stays above $70 I have $1596.71 (19.29%) as Profit. I’m going to wait this one out for now… I looked around and didn’t see anything that I wanted to jump into right away on my watchlist so I took a position in DG selling the 10/18 $80 Put for $13.97. This trade was outside of my strategy, I only took it because I saw someone comment that if you buy Puts on Margin you don’t get charged interest. I just wanted to know if that was true, so I held it for 2 days bought it back today and as far as I can tell I was not charged any interest. Robinhood has a little box that shows your daily interest and mine still says zero. I’ll wait until the end of the month to see if I get a charge. I don’t use margin, I like to keep roughly 10% cash in my accounts. Its still a useful bit of information. I made $6.94 Today I rolled HOOD to 10/25 $25 Put this is my second trade on it since ending it in my Robinhood account and starting it in Schwab. The Robinhood position I closed after 7 months with an ending ROI of $468.13 (21.28%). I decided I liked HOOD, I want to hold on to it so it goes to Schwab. I got $14.68 in Premium from that roll. I also restarted a position in GM and sold the 10/25 $45.50 Put for $25.97. I did a Buy/Write on 10/4 just looking at the chart and it just seemed like it was in a good position and the premium was good. Most Buy/Writes I sell the closest Call and just take the W if it goes ITM. I did look at rolling but the premium wasn’t great. Last trade I closed my position in CLSK. I had lost faith in this trade awhile back and sent it off to Options Purgatory with a 1/16/2026 $12.50 Put. That seems crazy, but I had $668.74 in Premium at the time so that fit my targets and would have put it profitable if it had been assigned. I was just going to keep it way out in the future like that and work it down, but I decided I want to not trade things under $25 or $30. The premium gets too small to be worth it, and all my small ones have just been headaches. I spent $625.03 to buy back the option and close out CLSK. All said and done I walked away with $68.04 (5.44%) in Profit and I had the position for 5 months. Add everything up and I ended this week with -$521.47 in Premium for the week. YTD numbers did rise to +$7201.69 (12.98%) and +$2567.34 (21.44%).
Personal preference. Puts feel like I am using my money to place a bet on the position. Calls feel like someone is giving me money so they can place a bet. If my Put goes deep ITM I'm disappointed, if my Call goes deep ITM I feel like my profit is just locked in. After I buy into a position I don't feel the same way watching its price go up and down as I do watching the value of money going up and down. If I buy 100 TSLA at $200 and it drops to $150 I still own the same amount of TSLA. If my account dropped $5000 its the same thing on paper but feels way worse.
It's inferior to buy-write. It's another commish and edge loss. I know it's trivial but it's important to understand synthetics. The price mark to market is the same with either and the market doesn't care about your idiosyncrasies. buywrite + put = conversion arb. Knowing arbs/synthetics is helpful to keep you out of illiquid ITM stuff in more complex positions.
I tell people with full time gigs (outside of finance) to trade the last hour of the day to adjust positions (delts) and run risk-reversal pricing on index. For those new/small accounts I generally recommend a fractional synthetic straddle over a unit buy-write: Buy 100 XYZ @ 104 - Dec 110C (or short Dec 110P) vs Buy 50 XYZ @ 104 - Dec 112C The idea with the latter is that you're long 50 shares and short 112 call = short a half unit synthetic straddle (half size of shorting the 112C, 112P straddle). You cover on a touch of neutrality (forward ~ 112 out to Dec). Generally that's going to be the strike you're short, but it may differ greatly based upon HTB or meme-status, divs, etc. Stick to liquid names (>$10B float). When going out on time you need to price the synthetic/forward before doing anything (+C/-P ATM strike -> price of combo long). Allows for greater diversification less modality flip on delta (shares trade above strike). Inherently you're lower on port-risk and it allows you to fly it off on a touch of neutrality (gains to delta, time as synthetic vol, vol-corr). It's not complex. Your share exposure is lower... you're just half risk up/down at a larger credit.