The SPY IC Ladder started in Feb has shown significant swings in profit (high of $8,000 to low of $(5,000)…. I would not call it a winning strategy just yet. Annualized return as of Friday was 6%…..not worth the capital at risk. To date I was primarily selling the 45 DTE IC’s (or when they became available) and closing them around 21 DTE. Typically selling body width of 30 and wing width of 10. I stopped selling if the IV dropped below 14 (more recent development). I was rarely achieving the 1/3 value of the wing spread that TT recommend. Currently letting the DTE run lower to see if it helps. I haven’t been doing a lot of “adjustments”…..at the cottage for the summer and the internet connection is a little painful for rolling SPY spreads.
If anyone is interested in the complete list of trades to analyze let me know and I would be happy to share.
Open positions in the bottom table. Would like to see a pull back as current price has pushed a couple of the short calls ITM.
Couple of weeks ago I posted about opening a new CC shortly after CFLT IPO. Stock price did go up after establishing the position only to start a sustained decline……until last week when the stock recovered.
Last week was an interesting time for the banks/analysts to come out with strong upgrades and new target prices pushing the price up …..considering the IPO lock up expires on Monday……
Little nervous heading into next week so we wrote ITM calls at $40 (Sep).
Position looks good today with a 54% annualized return…..might feel different next Saturday….hopefully not but can’t say I have a lot of trust in the bankers…….
Black line in the graph is the net of the stock and option profitability. They were mostly offsetting until the last week.
The SPY Ladder Strategy is not contributing much to the account….so far. Hopefully things will improve with experience.
We started the ladder in Feb selling March IC’s. As we approach 21 DTE we close and open new positions 45-50 days out (if available). We have opened 302 positions……600+ trades including closing. So far Schwab is making more money than I am! Commissions are slightly higher than the profits so far.
What am I learning….
It is really hard not to adjust….which I should not be doing. Adjusting takes incremental investment. The IC’s are each defined risk….and I should let them ride. I have rolled up the untested side on a number of occasions but the end result is narrowing the spread of the body. When the SPY moves in the other direction it doesn’t take long to put the rolled position under pressure.
Need to establish wider “width” in the IC body. At least 30 delta. Premiums are much more attractive at 20…..always tempting to go narrower.
Very hard to make money if volatility goes below 15 when establishing a new position. Need to be more disciplined and refrain from new positions with SPY IV at 12-13.
Positions are carrying unrealized gain of $2,547……which is promising if we can realize a good percent of it.
Schwab platform isn’t the easiest to work with when rolling spreads….figuring out how much a credit for the untested side so you know how much you can spend rolling up the tested side without incremental investment…time consuming with lots of “fiddling”. If you have suggestion on how to do this better in Schwab feel free to comment! It looks much quicker on TT….I have gotten quicker and now have an IC Roll Layout with two All-in-one boxes open on the right and the positions on the left.
I started increasing the sizes….initially they were 2 and 3 contracts….now 5 to 8.
Need to get better with establishing skewed positions…
Graph below shows the daily P/L for the strategy. Table on the right is profit and return. 8% annualized return needs to improve. Would like to get this to a minimum of 20%. Willing to take on higher risk (bigger positions) if the return can be improved.
Hope this is interesting for some of you. No plans to stop yet…….
Appreciate all the posts and helpful culture of the site. Hoping this might help some out.
Over the past couple of weeks I increased my focus on writing CC’s against stocks with attractive dividends. I created the attached Google sheet to help out.
Worksheet has a fair amount of automation. User is responsible to add a ticker in the proper week from Jan to Mar. Ticker gets added in the appropriate spot for Q2,Q3 and Q4. Income sheet looks up the ticker on Yahoo and returns exdiv date and yield (yield is shown as a negative for some reason as exdate and yield are in the same Yahoo cell with yield in brackets). User adds the number of shares for the ticker on the income sheet. Worksheet calculates the monthly, quarterly and annual dividend income for the tickers you own.
i find it to be a good visual tool so you can see what is coming and not get shares called away because you miss the exdiv date. It also allows me to quickly identify potential candidates on my list.
Yahoo link seems to work well….but it can be slow. If I like using I might purchase a more reliable data source.c
A picture of what the first page looks like is below. Feel free to make suggestions.
The post has over 100 comments referencing the ‘No one in my real life…..’ comments are probably applicable to most of the traders in this group…..sorry for not creating a direct link and suggesting you search for in on Reddit….but it is worth a few minutes of your time
Smile Direct Club has been a good candidate for writing covered calls against. The weekly option premiums are excellent. To date the combination is generating a return of 123% or 107% annualized. Stock price has dropped significantly from Jan ($14+) to Mar ($11). Option premiums have helped offset some of lost profit on the stock. Overall this remains one of our key positions.
Sort of frustrating to spend most of the trading time managing and experimenting with different trading strategies in my Schwab accounts and have the IB account that I don’t spend much time on outperform by a significant margin. I either need to improve my trading skills or not trade as much!
I established a CC + Put Protection (*.98) strategy for SDC. SDC has moved up from $9.72 to $12.10. I rolled the short calls from $9.50 to $11 to $12. The Put was at $8.50 and it is now worth $0. Would you usually roll the Put up when the stock runs up as the appreciation is no longer protected or just let the stock get called (assuming it stays above $12) away and do a reset.
Sharing current covered call positions in IB account along with graphs showing the progression of the return on each position. Left money on the table as stock prices have run past our strike prices on almost every position.