top of page

Slow Year - 2 Options Trading Strategies That Are Working

I'm up just shy of 9.5% for the year. It's been slow for me for multiple reasons one of which, I'm transitioning from growth to lower variance growth and partial income - I bring this up because it influences how I deploy my overall portfolio. My current target is 12% per year. Looking at the strategies I'm using, there are 2 that stick out as primary sources of profit:

  1. Ratio Put Diagonal. This is a staple of mine, I typically run the call side during bullish periods and essentially flip it on it's head during bear markets. In this case, I've been favoring ~180DTE, 0.80delta+ long puts with near term (<21DTE) puts sold against at a delta ratio to ensure I'm not capping profit potential. I've been hovering in tech (communications) and health care sectors finding weakness.

  2. Volatility Rotation. Volatility is reliable in that we know it's mean reverting. Interestingly enough, with increased overall market volatility, we see the variance premiums changing compared to pre-pandemic periods. So rather than my go to approach during more stable bull markets, I've been closely monitoring vols to gauge any potential edge and have found it requires much more attention, regardless there's opportunity. I've found certain sectors (sorry, I'm purposely leaving this part out because some of the products are smaller) where there's astronomical relative VRP. Strategies that I've been deploying primarily are short straddles, <10DTE, primarily managing risk via position sizing however I'm optimizing delta bands that are worth adjusting around.

Sharing a few things working for me - what's been working for you?

63 views0 comments

Recent Posts

See All

Don’t Trade

If you don’t have a written plan. The goal of this post is to share personal mistakes in my early trading to hopefully encourage others down a different path. People tend to hate those kind of stateme

Path to Options Proficiency

For the new traders, whatever you do, do NOT allow the disenfranchised internet trolls dissuade you from learning and asking questions. The goal of this post is to encourage new traders to stay the pa

Ratio Covered Call Option Strategy

Covered calls should be a staple strategy for most, whether it's a standalone trade or part of a broader strategy (like the covered strangle for me). They allow us to produce income from an equity pos

Post: Blog2_Post
bottom of page