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alfred: I don't think anyone here sees a confrontation..no worries there. I'm not sure of the ones you checked in the list but look at it this way...Given the DTE in that list what are the chances that the underlying will move 33%? As the DTE get smaller, the probabilities get smaller also. And, 30 DTE can mean only 22 trading days given the weekends...
Annnnnnnd...One more important thing is account size.
Selling one option that has a value of $20 and assuming that it expires at $0. After fees and commissions you bank, say $15. Seems like a lot of work for $15.
Sell 100 of these and bank $1500.
As your account grows you can sell less expensive options with less DTE and still make decent bank. There is a huge difference on a 20% return on an account with an initial value of 20K versus one with 500K.
If you approach this as retirement or a little extra spending money, the larger your account the more 'smaller' things matter.
That is what i thought you were doing. I agree with you - I doubt you'll find any that way - that would be a huge move. (the price may have to double in 60 days!)
I assumed Cordier was talking about premium. If the currently premium for at the money is 10, look to sell options at 5, which would be 50% out of the money.
In either case, I don;t think % OTM is a good way. I think delta is much better. As Ron said, look for deltas of .02 to .04.
I have seen those videos about six months ago and I agree that it is a must watch. Certainly is very inspiring! of course it can be done! Ron is DOING IT.
Smallish account here. Keep in mind that 50% per year will get a $10k account to $390k in 10 years. Sock away an extra $200 a month (don't need the fanciest charts, indicators, and software now) and that is closer to $560k in 10 years.
The power of compounding! And the neat thing about selling options the way most of us do here is that should you choose to have/keep your full time job, you can. At least until your trading income matches Ron's! LMAO!
I have seen her videos a short while back. From what I gather she looks to sell puts with a delta of 0.05 and calls with a delta of 0.10. She only sell when market pulls in one direction and doesn't necessarily strangle unless the situation determines a good opportunity to do so. So for example when the market has a good down move she will sell a put, then if it moves back up she will sell calls to get a wide range for her trade.
Also she makes adjustments when a trade goes against her and the delta goes up to 0.30. She says that "Once I have your money I don't give it back". The adjustments she makes is to buy back the options and then sell more options further OTM with the same expiration. I am not sure how safe that would be but apparently she has survived some major moves against her, by having enough capital to make adjustments, while still coming out positive.
