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What a wild ride on 9/4! How did your strikes hold up?
I fared pretty well. I was on a podcast recording on Friday morning when the market tanked and went all the way to 3349, way below my strikes (between 335 and 3400). I'm glad I didn't see that. Maybe I might have lost my nerves??? But then all ended well when the market recovered to well above 3400 again. Whew!
And I sold options with strikes between 3000 and 3150 for Tuesday (Monday is a holiday in the U.S.)!
Did anyone suffer losses on Friday?
My strike was 3435 so I lost some. I think at the time of the trade, it was a 3 delta option?
Have you been targeting even lower deltas?
I learned a little about myself on Friday - I write some of my own backtesting software that I try to optimize for my goals/behavior. I usually sell SPX 3DTE, between 4 delta and -3.75% off the current price. Based on historical results, I have always said that I can deal with losing and always would hold to expiration.
I had strikes of 3425 and 3410 expiring Friday. I bought back both at about 7:20PST, at the number that wiped out my August gains. I looked at the charts, envisioned back to back -3.5% down days (although historically that has only happened 4 times in the past 2 decades - March ’20, Oct/Nov ’08), panicked and at that moment decided that was the stop loss threshold for me.
With the close at 3426, obviously I should have sat on my hands, but I’m going to re-think my strategy based on how I behaved.
I was happier to get higher premium for Tues, selling between 2975 - 3020 (my strategy has a simple trigger to sell dramatically lower delta/% off once SPX drops -3% anytime in the last X days)
Nothing to add but an interesting story. Being so new to your method I've yet to back test sufficiently to have the confidence to implement it. So, here's something from a participant that was "almost" on the other side of your trades.
On Wednesday 9/2 around 2 pm I bought 5 puts on the SPY Sept 4 contract 350 strike at $0.57 per. Market moved strongly against me and I closed the position late in the day at $0.32. It's very hard and admittedly fairly dumb to fade a bull market this strong. There are rules about such things! As everyone knows the bottom fell out the next day. During trading 9/3 - 9/4 those puts traded as high as $16 (yes, almost $8k profit) and expired at $7.50. Ouch! I'm guessing in truth the best I would have done was to sell 3 at $4-$5 and sell the remaining 2 a bit better. Oh well ...
I'll be waiting for your call (not) 🙂 In the mean time there are some occasions where I just can't help myself and put a few dollars into a long shot like this one. A personal weakness I guess.