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Strategies & Market Trends : Option Strategies
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To: Hank Scorpio who wrote (2242)2/24/2021 6:04:55 PM
From: robert b furman1 Recommendation

Recommended By
Thehammer

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Hi Hank,

First off welcome to the thread.

There are some pros here, who have vastly more experience than I about the ins and outs of options.

If you've noticed, the premiums of puts and calls accelerate during periods of climatic trading. Calls on big run ups and puts on big declines.

At these extreme inflection points a put or call can become bloated by a multiple, say 2 or 3 times the average over time.

Those extreme points, make me think I'd not try to get the average of every week. Collecting the usual weekly time decay can get wiped out, in those extreme inflection points. In other words the collection of normal time decay can be exceeded during inflection points.

I find the study of CLX (climax points) to be helpful in determining those points.

I learned clx from Don Wolanchuk and it can be studied here: Subject 52296.

That's my first thought to your wheel system. I am admittedly a scardy cat investor. I try to time my sells of puts during climatic downtrends when the put premiums a swollen by fear.

I only sell puts on stocks I'd like to own and pat a substantial dividend. If I get them assigned to me. they fall into my dividend revenue stream. Before I sell a put, I decide at what strike price I would like them to be assigned to me based on dividend yield.

For me that takes the fear out of the trade. I take it either way and let the beauty of time decay work on my side.

IN TIME DECAY I TRUST!!

That's just me, but welcome here and please do post your trades so we see how your wheel system works out.

The beauty of SI is we all get to learn how to collectively prosper in this wonderful capitalist system.

Bob
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