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The Wheel Strategy on Options


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The Wheel Strategy on Options

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  #21 (permalink)
 PK007 
South Africa
 
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This was the update a couple of days ago. Currently, it's very likely that I'll be assigned the contract on the 23rd but let's see.




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  #22 (permalink)
 PK007 
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Update:




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  #23 (permalink)
 GFFAaron   is a Vendor
 
 
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Happy to see that last trade closed out for a profit.

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  #24 (permalink)
 Mativen 
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PK007 View Post
Update:




Thank you for the update.
May I ask, how did you get $56.25 for Dec 31 Sell Put 4585 (with underlying 4719).
Tastyworks only offer $29 right now (underlying 4720.5)

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 PK007 
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Mativen View Post
Thank you for the update.
May I ask, how did you get $56.25 for Dec 31 Sell Put 4585 (with underlying 4719).
Tastyworks only offer $29 right now (underlying 4720.5)


That's just me being lazy. I place limit orders most of the time. The sell order got filled at 4:00 am EST on the 23rd as per the transaction detail from Tastyworks below. At that specific time the MES was at 4694.

When I update the trades on the table, I don't scroll through the chart to get the exact point in time. I just take the price from the daily bar.

I can probably remove that column with the underlying price anyway. Initially I was planning to plot it on the chart but then it makes it too busy to read.



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 Mativen 
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Thank you for your clarification.


PK007 View Post
That's just me being lazy. I place limit orders most of the time. The sell order got filled at 4:00 am EST on the 23rd as per the transaction detail from Tastyworks below. At that specific time the MES was at 4694.

When I update the trades on the table, I don't scroll through the chart to get the exact point in time. I just take the price from the daily bar.

I can probably remove that column with the underlying price anyway. Initially I was planning to plot it on the chart but then it makes it too busy to read.




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  #27 (permalink)
 PK007 
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Update:





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  #28 (permalink)
 PK007 
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Update:



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  #29 (permalink)
 PK007 
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Got assigned 1 long contract. The unrealised profit/loss is calculated at the current price of 4663 when I posted this.



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 PK007 
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It's not pretty! But can't stop posting just because it's in a loss.

This strategy WILL have large drawdowns in extreme downturns. Although this was expected, it's still painful to see the big swing in the P/L chart. Anyway, will have to shoulder on to see where this is going.

As mentioned before, this should not be the only strategy and definitely not traded at max account size. I think about 2% of account makes sense, but I would rather have more data (at least 1 year) before making a final call.


Because price has moved so quickly down, I managed to get 1 extra short call transaction in last week.
The overall breakeven MES price for the strategy since Sep 2021, is about 4504 (current loss of $665 / $5 per point + current price of 4371). Excluding the current short call premium.




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