TastyTrade likes to recommend selling options with 42 days to expiration, (DTE) then rolling them around 21 DTE. Supposedly this captures some of the theta decay, which is just fancy talk for time value, and avoids most gamma volatility. …
When I wrote "Smooth Sailing with Options", I tried to talk a little bit about the fact that the ways we think about money is perhaps more important than trying to apply technical skills. The big firms with their quants lose money too, as…
A cautionary tale. I have this book in my collection, "The Complete Guide to Option Selling" by James Cordier. I recommend it in my book, "Smooth Sailing". Still do, in that it does teach the ins and outs of option selling. However...James…
In an attempt to learn and improve my trading, I signed up for the Blue Collar Investor subscription service for a while and paper-traded his recommendations. He, Alan Ellman, uses technical and fundamental analysis using screens set up to…
I'm still learning as new things develop. I got hit with a trading violation for 90 days a while back for trading with "uncleared funds". When you sell an option it takes one day, overnight, for the funds to clear so that you can use those…
When selling options there are only two types of option we can sell, puts and calls. There are only two ways the trade can go, above your strike or below your strike. So here's a flow chart that strips it down to the very basics. This doesn't…
I’ve been doing this options thing a long time, and I’ve had my failures. But I’m a firm believer in the method and so I want to share a failure with you and how it ended up.
Back in December 2020 I started selling puts on DIS. (Left…
(This blog is now obsolete, as VXX has been “delisted” by Barclays. However there are other inverse etns out there such as UVIX that would work with this method. -January 2021)
Ok this goes against my normal preaching, (always selling,…
Now that IWM has three expirations per week, the question is, do we make more money by selling two or three day contracts twice a week or one, one week contract? Once again, in my endless pursuit of options trading excellence, I have spent…
When you sell an option on Friday for the next Friday, you're looking for seven days of time value in your premium. But when/where does the time value for the two days of the weekend go? Are they discounted by Monday or on Monday? Since I didn't…
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