After spending too many trades on the long side of the call, only to watch the suckers expire worthless, I decided to get on the other side of the fence. My primary focus is selling options to generate monthly income.
I trade Iron Condors, Butterflies, and Calendars, mostly in liquid products like SPY, IWM, and QQQ.
And then for fun I do some swing trading for a few days/weeks at a time. I do not, and will not day trade. Life is too short to spend it glued to a monitor watching ticks all day. I like to put a position on, and not have to babysit the thing.
I also like walks in the moonlight and fancy drinks with little umbrellas in them, but that's another thread altogether. So, who's up for a little theta decay action?
I'm also interested in writing options - since I'm green, just sticking to the simple stuff first. I've done fairy well on short term swing trading options on stocks so far. My ultimate goal is to sell calls & puts on the spy,qqq, iwm - as you are doing now. When I hit my rhythm my next step is to sell options to cover the premiums I pay for my swing trades.
Check out this forum here: Google this = tastytrade.freeforums.net
Then click on the website link to their website to get to the forum. I would have just posted the link but since I'm new this forum won't allow me to post links or images until my post count is 5 or greater?
Their mainstay for selling options is by trading what they call Golden Geckos, which is just a way of simulating selling strangles on options with 85% probability out of the money strikes with High IV Rank using protective wings for defined risk trading. My user name at the forum is frenchy. I'm always looking for a better / more profitable way to trade with less risk / less capital requirement and the form of trading they do there is by far been the most profitable for me. I like to trade/buy straight up calls and puts as well but have not had that much success. Trading Golden Geckos / Iron Condors / and Vertical Spreads are risk defined at entry and are pretty easily managed into a small loss or scratch when they trade against you by rolling them for more credit / duration until the trade becomes a scratch/breakeven or small loss. Maybe we can bounce trade ideas / setups off each other in here or at the other forum I mentioned above.
Big Mike recently posted a basic options webinar with DeCarly Trading which included a nice discussion on risk/rewards on selling naked vs spreads. I've been thinking about this topic a lot - I believe the most important part of any trading plan is to clearly understand the risks and have a risk management plan in place - my biggest hurdle is how much of my capital do I want to tie up meeting margin for this type of trading - I have other trading strategies in my portfolio as well! One of my personal rules is no trading on margin until I have more experience under my belt.