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Math: 3705 * 100 * 5.5% ÷ 52 = 390
Would you please elaborate what is this 5.5% in here ?
I don't think -0.05 delta is always x% OTM. It depends to IV as well.
@sepidpooy defines how much you are looking to make on the trade over the year. See this.
Interesting this morning, but early drop would have needed to double to reach option strike.
Sold 23 Dec 3530 for $1.45/with underlying trading around 3698 and delta about -3.7 and IV of 29. Extra risk by selling about 2.25 hrs before close.
Six month report...gain 14% (6% on put selling, 2.5% on muni ETF payouts, 5.5% muni ETF capital gain). One loss was on 9/4 and took my put selling gain from 9.5% to 6%). Obviously, I wasn't on this in March, and that would have been a 'fun time. Not sure I'd enjoy this at VIX under 15.
Sold 3300 for 0.95 today right around the bottom of that dip. Lucky morning.
PSA: early market close for Christmas Eve. Note expiration dates are Dec 24 and 31 instead of Dec 25 and Jan 1. Also premiums should be lower for strikes on Dec 24 than a usual 1 DTE because of the early close.
I’m selling each expiration per usual and taking the lower premium for the shorter time - letting the central limit theorem do it’s thing. I could see someone skipping Dec 24 and taking the 5DTE today though because it only 1.5 market days. What are you all planning to do?
Thanks for heads up.
My plan was a little risky due to option overlap. I sold M-W normal and then mid trading day on Tuesday I sold a Tu-Th option (Christmas Eve). Total delta on the combined trades late Tuesday was never over 5, so low enough risk.
Then tmrw I will sell near close for Monday expiration. Thoughts?