Originally Posted by
Buck Rogers
Thanks for that. Generally speaking, have you found that generating metrics like this trade with POP P50 and ROC are numerous? Or does it take either mimicking the pros or lots of "digging" to come up with appropriate trades. Additionally, do you vary your trade strategies for diversity, or have you found your "comfort zone" by restricting the strategies you employ to just a couple?
For my 45 DTE trades, I use almost exclusively naked puts and put spreads. (Also consider the $20 naked put, worst case scenario you are assigned 100 shares at a cost basis close to $15, if you have been wanting shares of this stock that’s a good option).
For earnings trades where I am trying to profit from the post earnings “volatility crush” I use iron condors, typically. Depending on how a stock moves after an earnings release I usually write another put spread or buy calls.
For my highest conviction companies, I dabble with buying deep in the money calls dated at least a year out. These move almost identically stock but require less capital (this is “stock replacement”).
For the statistical side of this, the RMO trade I posted is 66% P50, which are great odds. Realize though, you have to trade these often for the statistics to play out. This one might be a dud, but over time if you keep trading these ~70% trades, you should do well. Tastyworks makes it super easy.