To The Moon

I had been trading options since year 2021. I had lost quite a substantial money on the actual stocks that I had bought. However, I had managed to recover all the lost through options trading by selling call&put option to earn premium. This is a very good trading tool if you know how to use it. Even Warren Buffett had been trading with this tool for somany years. Give it a try if you never done it before. Of course, please start with small amount first as every trading contains risk. Do your own diligent research study before you start trading options.

Fom my trading share orders, it seems that I mainly trade options. Why did I choose options as my main trading category?

Option sellers have higher probability of success and time works for us instead of against us.

Higher probability of success:

Conventional stocks can move in 5 ways, Strong bull, weak bull, sideways, weak bear and strong bear.

Money can typically be made only from 2 out of 5 movements. Strong bull and weak bull if you buy stocks.

For short sellers, it is even worse, only 1 out of 5 movements, Strong bear. Small bear may not cover the cost of interest incurred.

When we sell options, money can be made from 4 out of 5 movements.

When we sell call options, money can be made from Strong bear, weak bear, side ways and weak bull.

When we sell put options, money can be made from Srong Bull, weak bull, side ways and weak bear,

By design, option sellers have better odds of making money.

Time works for option sellers:

Option sellers have time decay on their side, as time passes the contract losses value.

This time property of options, when utilized can create income streams.

What is the most impressive investment experience I had?

My option selling strategy was made to go up significant ups and downs last year due to $Alibaba(BABA)$ .

The rallies are quick and fierce, the plunges are fast and scary.

I had to keep on adapting to the conditions, testing my knowledge of options. Before that experience, I was basically doing simple wheel strategy.

During the alibaba swings, I was forced to learn various types of rolling, adjustments/centering and spreads.

Till date, Alibaba has earned more than USD 40,000 through options and its still giving me golden eggs till date.

Perhaps it isn't as flashy as x100 x1000 gains, but I value consistency more than big gains which are difficult to repeat.

How do I select stocks and control risks?

Blue chips

A key rule for option sellers is to only sell options on stocks that you want to own.

The reason is that shit happens and there's always the chance that we will end up owning the stock.

Hence, my short strangles and short puts are for stocks that I will want to own.

If its a short term play, I will use vertical spreads or iron condors.

Stocks that I select are mostly blue chips like $Alibaba(BABA)$ , $Amazon.com(AMZN)$ , $Apple(AAPL)$ etc.

Blue chips are good for option sellers as there's higher liquidity for options which reduces the spread.

How do I pick various elements of options?

I will decide during entry, whether am i Bullish, bearish or neutral and deploy the corresponding option strategy.

To put it simply, Entry will usually be 45-50 days time and strike price based on delta 15-20.

Strike price to double check against support and resistance prices.

Check historical Volatility vs IV. If there's no volatility premium, i will usually sit it out and observe.

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