The implied volatility of SPX options is the lowest its been in
years. I wouldn't describe any sale right now as "easy
income". Why did you go out farther in time? Likely because the
premium for shorter term options simply wasn't there. Not
saying you won't be right. Just that option premium is "dirt cheap"
compared to the last few YEARS.
Posted by DigiNomad on 17th of Apr 2023 at 12:13 pm
I went further out in time to sell a technical level I felt
comfortable with that is at or around 16 delta (> than 80%
probability of profit). I agree with the low historical
volatility - that's why I'm not touching the short put side of the
equation right now (I usually do, but not at extremes). 16 delta
puts for July are currently around 3750. Selling that level is
madness, in my opinion.
At the end of the day, the proof is in the equity returns
curve. See attached for accounts where I switched over to this
strategy in September of 2022.
The implied volatility of SPX
(Correction) SPX short calls - get em while they're hot! ...
Posted by pep8261 on 17th of Apr 2023 at 12:03 pm
The implied volatility of SPX options is the lowest its been in years. I wouldn't describe any sale right now as "easy income". Why did you go out farther in time? Likely because the premium for shorter term options simply wasn't there. Not saying you won't be right. Just that option premium is "dirt cheap" compared to the last few YEARS.
I went further out in
Posted by DigiNomad on 17th of Apr 2023 at 12:13 pm
I went further out in time to sell a technical level I felt comfortable with that is at or around 16 delta (> than 80% probability of profit). I agree with the low historical volatility - that's why I'm not touching the short put side of the equation right now (I usually do, but not at extremes). 16 delta puts for July are currently around 3750. Selling that level is madness, in my opinion.
At the end of the day, the proof is in the equity returns curve. See attached for accounts where I switched over to this strategy in September of 2022.
nice!
Posted by pep8261 on 17th of Apr 2023 at 12:14 pm
nice!