One Year On - A Good Journey of Option Wheel Returns
A year ago, end-Jul, I signed up to join Tiger. Tbh for the most part to secure the sign-up bonus and rewards. 😝 But I also decided to take the chance to experiment with various strategies and make it a point to self-evaluate and reflect after one year.
I had only one modest goal then - which was to beat Nasdaq and SPY by at least 1%. At end-Jul this year (one year on), I wanted to just jot down for self-reflection and posterity my "report card" for the year. And also to serve as a reference for my future self to continue persevering in this market! 💪
Glad to share the results below. my primary trades were mainly based on the infamous "Option Wheel" strategy.
Took quite a bit of juice to grind through those trades - took a whopping more than 200 trades in a year!
Refined details of trade mechanics over the year but kinda converged to something as follows:
Risk Mgmt: Margin should not exceed 2% of total assets
Trade Entry: Only enter put positions on general down day (NASDAQ down for the first half of trading session), and call positions on up days.
Stock Selection: Zack's rank >= 3 | High option volume with unusual option volume on certain days | Price <= $100 | Avoid meme stocks
Strike Selection: The higher the Zack's rank, the closer OTM | The premium gotten from the short position >= 1% of the price of stock if the option gets exercised (assume 100% margin reqt) | The "profit margin %" stats ideally more than the Delta | 2-4 weeks to expiration
There you have it! Pat on the back, and push on. Hope the info is also inspiring and useful for fellow traders out there! 🎯 📈💪
Good trading, y'all!
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