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Would it make sense to sell higher delta premium with the same 6 times initial margin? This would involve selling a smaller number of contracts to take in a larger premium.
Wouldn't this provide more rapid theta, meaning less holding time (market exposure) to achieve 50-70% of maximum profit, with the added bonus lesser black swan risk due to selling less overall contracts?
In short, I wonder if there is an optimal delta and DTE?
If you look at the VVIX (the volatility of the VIX) We are extremely high, we are at 2008 levels.
All this talk of war with N.Korea from Trump has people nervous as one misstep could lead to 1 side dropping a nuke.
Do not forget: This weekend is only the first round of French election. The final and decisive round will be later.
And there are a lot of other political issues around in Europe (eg. second round of French election, British election, German election, terrorist attacks).
The general decision you have to make is to either trade as normally or to reduce positions due to the political situation or to stop selling ES puts for a while, and trade other commodities. But I do not think it does make sense to wait until next Monday.
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That's a great point, and probably worth it's own discussion. If you trade/have automated systems for USD:EUR what do you do ahead of the French Election? Do you switch of your ES & GE systems before Fed meetings. Or NG & WTI ahead of EIA storage releases?
time value for 2 week options is not much, so you will collect little premium with a possible high risk.
Unless I misunderstand what you do, it seems to me you are doing high risk/low reward trades.
If you did these trades already, what is your experience?
