Four months ago I posted a (too long) summary of a SPY mechanical put selling paper trading exercise I would consider if I had a large account. For a refresher here’s the link:
I’m still running the theory and so far so good. Even with the selloff recently nothing has gone ITM except for a very short time. For awhile I ran it as a sell around 40-45 days and roll at 15-20 days. I’m now in the process of returning to the original allocation of 1 contract per expiration for 20-22 straight expirations. I’m not trying to time anything so these results could be a little better I think. Just mechanically selling as soon as new expirations are available.
So far (allocating about 600k)
Premium received: 29,360
Total realized gain: 21,090
Avg. strike sold: 295
Avg. gain per contract closed: $324
At the current pace it’s looking like about 60k gain for a year with very few issues or stress. Unless we get another black swan covid type implosion I’m thinking this is a decent low maintenance strategy. If nothing else it is a great learning exercise for a new option trader.