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Sold the 6 May Put on 4070 Strike for $1.35 with delta around 2.75.
Feeling a little greedy, since I've hit weekly income level already and still have one more Put to sell on Friday.
Tricky how to be safe for a while, but then get slightly greedy after being assigned (normally higher VIX).
Sold many 6 May 4000 puts. Hopefully they will survive today after yesterday's melt down (4%+).
Is someone trading odd number of contracts? Looking to add 3rd, where I already sell 1x on open and 1x on close. Wondering if it's good idea to sell 3rd mid day or better to do 2x whether on open/close.
@john can't help you with personal experience, but my thought is to maintain a constant delta across the Puts. This keeps a level risk vice fixed time approach.
My first thought is sell 2 at the close, and then sell 1 at the open (only if below delta target).
I would like to see how often selling 2nd Put option at the open saves you vice just selling both at the close.
SPX strikes at 3680-3725 for 5/13!
Sitting through the last Thursday without an SPX expiration. Let's hope the Friday close won't be a repeat of April 22. Could become a nail-biter again!
@earlyretirementnowcom 3710 here, so feel ok.
I'll have to do a more rigorous analysis, but at the same delta (say 3.0) the 2 DTE with 225 points margin seems much rusher than a 1DTE with a 150 pint margin.
My hypothesis is that daily Put selling will yield more small losses and few big losses.
@navypack Yes, that's the idea. You could face a few whipsaw events if the index declines massively and then recovers. But also fewer events like April 20 to April 22 with two big drops back-to-back.
In a nutshell, shorter DTE is a better shield against the (scarier) negative momentum issue. But we create a few more whipsaw events with comparably small losses.
Also, with the 5x instead of 3x weekly expirations, we should get better-behaved return distributions (less negative skewness) because we have ~65% more independent tries for the Central Limit Theorem to work.