Most Profitable Week This Year

This week was productive - I’ve become a bit more aggressive over the past 2 months to make sure I hit my annual benchmark which I moved past this week. This post is to share a few concepts that have been working for me.

1. Shorter DTE credit plays. This is typically a smaller allocation of my portfolio but the past weeks it’s been working well. Variance risk premium isn’t overly plentiful so a bit of scouring has been required. I specifically label this as credit plays because I’m not really trading a set single strategy, leading to the next point.

2. I’ve been establishing my positions late morning (Pacific Time here), generally short puts and short calls at a ratio (ratio short strangle) or beginning with a short straddle then morphing the trade throughout its lifecycle, adjusting deltas and adding risk to maintain a set profit zone. This can be extremely prone to whipsaw, so a careful read on the market action is necessary. Today was generally trending with some small pullbacks in S&Ps.

3. I’ve noticed on shorter expiry (0-1DTE) the early morning entries have proven problematic - primarily due to larger intraday moves (relative to IV and VRP). Adjusting to later morning has worked well. I have a dataset from 2013 that integrates 0DTE when they came available and carefully track time entry - it makes a notable difference.

4. I didn’t trade many pre earnings releases plays this week but I traded quite a few follow throughs. There’s a fairly established trend within tech specifically at the moment where we’re seeing follow through post ER. For these I’m relying on volatility contraction plays with a short directional bias. Short calls have worked well.

What’s been working for you guys?