I was thinking about selling some spy or /es strangles but with the vix back down to 11 will focus on individual names that have good vol and premiums.

My short list I watch every week is TSO, HAL, EOG, FSLR (falling knife), EXPE, DAL, AAL, WDC, SWKS, FB, BX, GS, GM (falling knife), JPM, GILD (falling knife) and CELG. Just watch the earnings dates, a lot of them are next week. You can typically make 1.00 several strikes OTM with these with only 1 week out.

market makes being greedy this morning with the pop in the market, the WDC roll went through for .91.

Rolling WDC 75 puts this week to May 26 77.5 puts for credit of around .95
They were originally sold for 1.20 and are down to .15-.17. Only 3 contracts but part of a ladder rolling for 4 weeks.

STO EXPE next week 125 puts at 1.55. Earnings next week but good support at 125 in the big IRA account.

STO 2 IWM next week 135 puts at .80 in the smaller IRA.

Closing out the call spreads (90/92.5 and 92.5/95) on my WDC laddered jade lizards with earnings coming up. I don’t mind being assigned on the downside if it drops below 75, but with a new price target of 116 don’t want to see a nice profit turn into a loss. I can close 1 at even, 1 for a slight loss, and 1 for a slight profit so basically a scratched trade. May re-ladder after earnings.

IRA selling some IWM puts that expire next week, 2 strikes OTM.
In the big IRA account will do the same with SPY.

Ongoing weekly experiment. I had not thought much about low value options, and typically would not sell options if they were less than $0.25. But one of the things I have already learned in the income blueprint is that a $0.40 option sold every week for a year (52 weeks) is $2080. On a 5000 account that is almost a 50% annual return. Food for thought on IRA or smaller accounts.

The math behind why 45 DTE is most efficient for selling options.

https://www.tastytrade.com/tt/shows/the-skinny-on-options-modeling/episodes/why-45-dte-is-the-magic-number-05-26-2016–2

Rolling TSO 83 calls to May 12 83 call for 1.04 credit. Assigned at 87.5 but with 6 weeks of rolling cost basis now 81.75 so assignment will result in a nice profit on 17 contracts. TSO tends to find a base around 78-80 then cycles to upper 80s and back down. Used to cycle every 2 weeks, now seems to take 3-4 to cover same range.

Picked up some nice theta over the weekend on laddered WDC Jade lizards. Start rolling those end of week.

IRA rolled AAL 41 put 4/21 out to 5/5 42 put for .81 credit. Originally sold for about .52 and was down to 0.07. Small account, only 2 contracts going.

Long weekend should give some good decay for my open TSO and WDC positions and maybe take some profits next week!

The VIX is finally high enough it may be worth looking at some /es strangles. Small size, only one contract for every $6000 so you can cover or hedge it if there is an extended move. Looking at the May 17, 44 days to expiration. 2125 put/2445 call brings in about $420 per one lot. Could probably close in 2-3 weeks at a 50% profit or even sooner if the VIX crushes back down.
First need to free up some cash by closing out some WDC Jade lizards at the 75/90/92.5 strikes but hoping to get a few more days of theta decay before closing. They are only about 25% profitable and if I wait another week I should be able to close at 50%. Today is helping, there was finally a reversal. Some days it is better to be lucky than good, I was starting to have to worry about adjusting the short 90 calls.

Hello everyone! I have been following for a month or so now. Good to find others that trade the same way I do (tasytrade, don fishback style). Anyway, I have been trading options seriously since 2004. I have almost exclusively graduated to selling options as over the years most of my trades that worked out involved selling an option first and not picking a direction. However, I have found taking a slight directional bias can increase returns.

Lately I have traded mostly individual names (better premiums with the low vol.). I tend to start by selling a put 1-4 weeks out. Delta 30 or lower and try to collect at least 1.00 or very close. If I get assigned convert to covered calls. I will also roll options until I can close it, make some money on it, or scratch it and start over. I have found about 16 names that trade well like this with good premiums that cycle with a range. I am currently in a TSO position that was assigned at 87.5 but because of rolling have my cost basis down to 82. 1 more point I am back to profit, today helped! Or 1 more week of rolling and will be break even.

I will also sell /es or /cl or /gc futures strangles but will always keep enough of a cash reserve to cover those positions if there is an extended move. Burned big time Aug. 2015 when I was short 50 /es contracts but only had enough cash to cover half of them. A painful lesson but a rule I will never break again. With those I will usually start 30-45 days out with a delta of 4-16 depending on directional bias. They decay to delta 4-8 in about 2-4 weeks and can take 50% off the table as tastytrade recommends. In case of an extended move will go long or short some contracts as a hedge and to get some hard deltas. Once the move is over close at a profit and keep the options decaying or let the options assign and close the future. Those are the trades that supercharge the equity curve but they don’t happen that often.

Thanks for the ideas. Look forward to working with everyone and hope I can add some ideas to the pile. I will usually not be long winded, this will be my longest post. As I see how you post trades I will start adding some. Usually trade on Thurs. (day off) and Fri. with rare mid week adjustment if needed.

Cheers, Chris Davis