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Took a hit today as I had the 4320 strike. Oh well...the cost of doing business. Here's to more volatility and higher premiums!
@mpaziran Ughh...I had the same exact strike. I closed it out a little earlier but still took a $4k hit. I sold Monday's expiration at the 4070 strike.
@mpaziran Same here. Strikes between 4290 and 4335. That was a bad day, but with the new expirations (Tuesdays already online, Thursday options coming soon) we should be able to limit the large drops like that.
@earlyretirementnowcom Yeah that was a hard day for me. I was unfortunate enough to have sold an SPX put w/ 4/22 expiration date and strike price of 4410 at 9:38am on 4/21 (at that time the market was on a tear upward if I recall) and pretty much right after point things went downhill spectacularly. Luckily I had also bought a put w/ strike of 4310 so that limited my loss to (just) $10k in a single trade. I had only started selling puts in mid-March too and that was my first losing trade ever! I've started digging myself out of the hole but I think it's going to a few months to make that single loss up even at the elevated premiums we're seeing (I'm selling at 5 delta + buying a put at much lower delta for a few cents b/c my broker TDAmeritrade makes me do it).
Looking at the other posts it looks like others took a loss selling puts but were selling at much lower strikes and so didn't lose nearly as much as I did. Don't get me wrong, I'm not averse to taking a big hit in one day like that (I was actually pleasantly surprised how well I took the ride down emotionally actually) but I am a bit worried that perhaps I'm doing something wrong somehow in how I'm executing the strategy? As best as I can tell I'm doing the right thing (selling a put at around 2 DTE at around 5 delta) but am new to options so for all I know I'm missing something big. Any feedback (or honestly just words of encouragement haha) would be appreciated!
@muse_ee Wow, 4410 was really bad timing. Probably traded that one close to the top when the index hit 4512?
In a way, I could consider myself lucky that I traded exclusively on Wednesday and didn't write any new contracts during that intraday peak on Thursday.
Probably make use of the new 1DTE contracts now, i.e., every weekday and roll contracts at or right before the close.
@earlyretirementnowcom Yeah I almost nailed the top exactly. It was at 4509.
Today was rough. Should have closed out early.
Misery loves company. I had the 4310, 4300, and 4295 strikes. Rough day. Gave back the year's gains.
Is anyone changing their strategy with the rolling out of daily expiries? Trying to gauge whether to sell lower delta puts since we'll be selling them more often now.
@setspreads same strategy, but just need less per trade. Instead of getting $150 for M->W trade, I'll just go with $75 for M->T. Still execute the trades at the close, right now.
I will do some research on average delta between 1DTE and 2DTE.
I've been hurt most this year on Muni trading down with higher inflation.
@navypack hey thanks for that. That keeps it straightforward. I suppose on a Monday we can look at the Wednesday option we would normally sell and see if the Tuesday option is around half that premium.
@setspreads well that isn't exactly what I ended up doing. I purchase based on the delta between 2 and 6 as Volatility moves from 30+ down to 15.
I think that tries to keep a reasonable amount of risk and at least this week ended up being pretty good on the 1DTE.
@navypack No worries. I have also been keeping track of my portfolio level delta, theta, and vega before trade and after trade. It looks like when I trade 1DTE those levels are about half the 2DTE levels as a check.
@setspreads Yes. I am already doing the Mon/Tue/Wed/Fri expirations and then soon all 5 weekly expirations.
@earlyretirementnowcom How are you choosing your strikes? Delta, %OTM, half the 2 day price?
Do you anticipate 5 expirations a week reducing sequence of return risk and improving results despite a little bit more in commission costs?
Sold the 3 May 3800 Strike for $1.15 and delta around 2.1. I really like these 1 DTE with VIX around 40.
A little scary to sell 7% OOM and still get good premium. Makes me think I am missing something.
@navypack There's a big fed meeting tomorrow to watch out for but the options expiring today should be safe.
I think that Swedish stock market flash crash yesterday has some people on edge.
@figuy1 Big runup around 1445 yesterday made today a non-event. I do really like these 1 DTE trades, for now.
@figuy1 Noted. For the 5/4 options, I played it safe with 3930-3960 strikes. 200+ points OTM should be enough even on the FOMC day.
@navypack Same here. The premium landscape has been very generous lately. I hope I can make up for the loss on 4/22 a little faster than usual.
On 4/28, I sold some puts for 5/2 with a 3400 strike. Crazy premiums!