Options

I “retired” in November 2024 after being laid off by a startup that shall remain unnamed. The severance package carried me through the end of the year, but I needed a new income stream. Thankfully, my wife works full-time, but I wanted to contribute and at least partially offset my lost income. So, what did I do to backstop my financial loss? I turned to selling option premiums—lots of them. My journey began in April 2024 when I started buying premiums, and I made a tidy profit. Then hubris struck. I tried to replicate my success, only to lose my gains—and then some. Lesson learned. ...

Selling option premium has been very profitable for me and I hope to keep it going in 2025. With the incoming Trump administration’s dovish and supportive view on Bitcoin, I have to look at ways to make money off that. The IBIT ETF has been front and center lately for me and I will be looking to sell puts on this volatile bad boy. Here’s the chart for IBIT: ...

I “retired” in November 2024 after being laid off by a startup that shall remain unnamed. The severance package carried me through the end of the year, but I needed a new income stream. Thankfully, my wife works full-time, but I wanted to contribute and at least partially offset my lost income. So, what did I do to backstop my financial loss? I turned to selling option premiums—lots of them. My journey began in April when I started buying premiums, and I made a tidy profit. Then hubris struck. I tried to replicate my success, only to lose my gains—and then some. Lesson learned. ...

This video provides a comprehensive guide to constructing an efficient and diversified trading portfolio for active traders. Tom Sosnoff emphasizes product indifference, focusing on capital efficiency across various asset classes, including stocks, futures, and options. He advocates for non-correlation to minimize volatility and reduce outlier risk. The session covers practical strategies such as optimizing trade size, leveraging beta-weighted deltas, managing risk through dynamic hedging, and understanding the significance of expected moves and probabilities of profit. Sosnoff also highlights the importance of consistent mechanics, portfolio diversification, and adhering to sensible capital allocation to succeed in active trading. The presentation combines educational insights with actionable advice, tailored for traders aiming to enhance their decision-making processes and portfolio performance. ...

I started option trading after reading the seminal book “Option Volatility & Pricing” by Sheldon Natenberg but I honed my strategies after listening to a bunch of TastyTrade videos. This video, on managing your option positions is a gold mine. See my notes below: 🔧 Building an Effective Watchlist Start with front-month index futures in descending order to track liquidity. Include liquid equities and organize by categories (e.g., gold, silver, bonds). Ensure your platform supports comprehensive watchlist features for effective monitoring. 📊 Sorting for Clarity Sort watchlists by IV Rank and liquidity to prioritize actionable data. IV Rank helps in identifying opportunities for rolling forward or closing positions. 📈 Managing Greeks and Positions Use native Greeks (non-beta-weighted) for equities and ETFs. Normalize futures positions to their equity equivalents for easier portfolio comparison. 🔄 Adjusting and Rolling Positions Apply the “Three Rs” for position adjustments: Roll up or down the untested side. Reenter positions for Delta management. Roll out in time to extend duration and reduce risk. 💡 Focus on Risk Reduction Be mechanical and consistent in portfolio adjustments. Avoid adding to losing positions; instead, focus on increasing credits and lowering Delta. 📌 Timing and Longevity Timing relates to mechanics, not market prediction. Portfolio longevity contributes to success by enabling consistent improvements. ⚙️ Redeploying Capital Optimize capital allocation by closing positions with reduced profitability and redeploying to efficient opportunities. Maintain daily engagement to monitor and adapt your portfolio. 🚀 Capital Efficiency and Non-Correlation Incorporate futures and futures options for better capital efficiency and diversification. Understand the uncorrelated nature of different asset classes for strategic advantage. 🔬 Basis Reduction and Return Expectations Aim for reasonable returns (e.g., 3x risk-free rates). Utilize theta effectively to generate consistent income, targeting around 25% of daily theta as profit.

I had a big epiphany in the last half of the year (2024) when I started selling option premium. I mostly sold covered calls and cash-secured puts and focused on the weekly expirations. I’ve been keeping the risk very low and not using any margin. I’ve been assigned 6 times in the last 6 months, 4 for puts and 2 for covered calls. This has caused me to buy 1,000 shares of SMH and 500 of IWM, so it cost me a pretty penny in my trading account. Yet, despite this I have 41 winning trades and 7 losing trades. That’s over an 85% win rate. ...

Just a quick update on what I’ve been up to lately. First, I got laid off, which pushed me into an early retirement. That’s okay—it’s the perfect opportunity to strike out on my own again. Second, I’ve been diving into the options market and have found it to be quite profitable. I rarely buy calls or puts because, in my view, that’s pure speculative gambling. Instead, I’ve been selling options—primarily cash-secured puts and covered calls. So far, this strategy has been working well. Why be the gambler when you can be the house? ...

My goal in with trading is to execute flawless trades. Seek the best entry, manage my risk, and exit with profit. Some of my trades are better than others but this week I bought 5 AMD calls and 5 COST calls. I’m still watching my MSFT diagonal put spread, with my first short put option expiring at the end of the week. Granted, if I get assigned (which is a low probability) I’ll just sell covered calls on those 100 shares. I do have a protective long put in MSFT to act as a back stop to selling “premium.” I don’t know I’ll end up doing this for the long term but I’ll keep this position open till end of May and sell weekly puts against it. ...

I sat out most of the week because I was transferring my brokerage account from TD Ameritrade to Interactive Brokers (referral link). It took 3 days to move everything over and today (Thursday) I made my first diagonal options trade. I bought a Jul 21 MSFT $405 put and sold a Mar 21 MSFT $410 put. The plan is to hold the July put till about June and sell weekly puts to get premium. ...

This is a trade review of my Advanced Micro Devices AMD call option trade. Why was I interested in AMD? Because it’s getting action for momentum traders interested in the AI market. Which way was AMD trading? It was in a long upward trend. Was AMD making an all-time high? Yes. When did you enter the trade and at what cost? I entered the trade on 3/1/2024. I bought 5 May 17, 2024 AMD Calls for $8.95. Total cost was $4,478. What was AMD trading at the time of entry? It was trading around $200. That was my entry. Now what about the exit? Why did I exit? ...