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Hey, that's a nice thread you got there. I'm trading a similar strategy.
I sell 85%-95% otm strangles on CL (1.5 to 2SD). I take profit at 50% credit and have a stop loss of 2x the credit received. I only trade CL cause it has a very low initial margin.
I risk 30-60% of my trading capital, 3 strangles with different strike prices and days to expiration.
My min DTE is 25 days and max is 70 days.
The implied volatility is pretty low right now, I closed most of my positions in the past days. I still have a CL 40/58 strangle on, 10 deltas so that's about 90% otm. Opened it at 0.76$ 5 days ago now it's around 0.45$. That's about 40% profit in 5 days, looking to close it at 50% credit in the next days.
When volatility is low I only open 1 strangle. I will open 1-2 strangles when the volatility rises a little bit.
I put on both sides at once.
I doubled my account twice, in 2013 and 2014. 2015 was flat. I was up +70% but lost it all in 2-3 trades. Now I'm around 65% YTD. I'm trading a relatively small account (40-50k). For now I don't feel comfortable using this strategy in my retirement account because I don't know how to hedge against big moves. I win around 95% of my trades but my losers are pretty big.
I only have to risk 30% of the account to make 100% yearly.
Are you reducing your position size or changing anything in your trading style coming into the election? I've had to liquidate everything because the Mrs. and I have decided to buy house and will probably look to start again in January or Feb. depending on seasonals. For now it's just sit, wait, and see what comes.
Also, I've started experimenting with spreads again to see what happens with different expiration dates given that all my spreads were taking over 50 days to reach 50%. Maybe a strike 60 days out would work better because it will decay faster? I'll do some tests and post the results.
