(10-07-2020, 02:44 PM)john Wrote: Fenders you have brought it up a few times that you have made ~1000 option sells/trades in the last 2 years. Is that the time frame you started making option trades? What got you started in options?My first option trade was in 1995/96. I did enough reading up front to know I would likely lose all my money buying calls (due in part to my lack of experience then). I sold covered calls through the tech bubble. It worked well of course, until it didn't when some successful but overvalued companies went away around 2001. For the next 15 years I was mostly a long investor (still am). Option trades were minimal as much of my port was in a SPY fund. Trading individual stocks was just a hobby. Occasional option trades.
Fast forward to today. In 2018 I decided to get serious about trading options for income. I am approaching full retirement and knew I better find out if this is statistically likely to succeed well in advance of depending on the money. That requires some time, a large volume of trades, and probably most of all... how well does it work in all markets? Any fool can sell 10 puts in a bull market and call it a 100% success, or pick the wrong month and have a 90% fail rate.
So anyway here I am a few years later. I've endured two hard market drops, and a SPY that is sideways most of the past 2 years with a strong surge in the Nasdaq. When the market flies I make less money. When it drops I lose WAY less. That is attractive for a soon to be 58yr old man. The large amount of trades has taught me how to control risk. I can exceed my dividend income and take virtually no risk. I can get 5X that amount with considerable risk. In short I now know what I am getting myself into.
Finally, although I am sticking to what works for my risk appetite, this strategy is ALWAYS open for refinement. Mike and I converse some on the side. We do things quite differently but the core principles are the same. (Stealing money for the gamblers and collecting insurance premiums from the hedgers). I respect his ideas and have altered my strategy this year. There is always room for improvement.
I should go count my trades now and see how addicted I really am.
Edit- About 55 options sells per month is the average the past 6 months. Usually a small number of contracts. Doesn't include trades to close a position or roll an option forward. That number is less meaningful. Keep in mind selling a single put contract in QQQ and MSFT and LMT has as much impact to my port as 20 smaller trades. Many of my option sells are in lower priced conservative stocks like T-KO etc.