Originally Posted by
DenVa
Winning the options game is easy. It’s just most people that lose try to get fancy with condors, eagles, red breasted swallows, or LEAPS on Chinese companies.
Sell puts and covered calls on stocks with low volatility with about two to three months of time left. Get put… sell a covered call while collecting dividends. Get called away…buy more stock and repeat while collecting dividends. Or just roll the positions in both scenarios.
You’re not wrong! Although, I would say I look for HIGH implied volatility RANK. The higher the IVR the better the premiums. Otherwise, I am on a similar options trading plan!
For 2021, on options alone I gave back about 25% of my 2020 options gains. This was due to high greed factor in 2020 and buying calls out into 2021. Some did well, but most didn’t and I ended up giving back part of my 2020 options gains. Overall the entire “premium buying” gamble worked well and paid for a lot of stuff for me. However, I won’t be repeating it as it was nothing more than good timing and luck. I may buy some longer term calls on higher conviction stocks to supplement core positions, but nothing more. Going forward I will be almost exclusively selling premium 45 days out on high IVR tickers, evaluating the position at 21 days and closing or adjusting at that point (tastytrade method).
Options are a small fraction of my overall PF. For my investment PF I will post performance on the other investing thread where Trip and I are posting those details.