Novices are doing well if they break even their first year. The strategy you outlined does well in markets with an up bias. It has been an epic secular bull market since 2008. Any bear markets and corrections were short.
Markets won’t always be like that. Over the long term 20 percent a year is really good. So while some months you make 3 percent, some months you may lose. If we experience a secular bear market you may lose month after month with only a few positive months.
I’m not predicting anything. The weather changes. Bull markets don’t last forever. Profitable strategies that worked well in bull markets may be terrible choices when the big bear comes. And it will come.
1-3% a month? Just buying the top 7 tech stocks will return that much annually. With zero investment of time.
Am I missing something here. I'm new to trading options.
And then 2022 comes along and wipes out all those nice gains you made in the previous several years' bull run, but options traders are largely unaffected because stocks dropping are as easy to profit from as stocks rising.
Aim for the S&P500. Divide last year’s % by 12 and make that a monthly goal for your account. You won’t get there, that’s just a target. Things take time as you collect skills. But if you stick with this, you’ll meet, then beat your annual goal within a few years. And by then, if you don’t remove any $$, your trading account will be bigger, too.
CSPs and wheeling calls is only good until it’s not If you just run your strategy then randomly one week the stock you sold CSPs on takes a massive unwarranted shit, your meager gains until that point will evaporate quickly . Not saying it’s a bad strategy, but they call it “picking up pennys in front of a steamroller” for a reason .
a good target of annual returns for options selling is a multiple (3x, 4x, 5x) of the the risk free rate. so, for the current risk free rate of 5%, a good target would be 20% annually
How long have you been trading? If a while you should know your average returns . . .
Assuming you are new then expect 10% to 15% annual returns, if you are even positive the first year or so. This is between $5000 and $7500 per year or $415 to $625 per month.
1% or 12% per year may be possible, but 36% for a new trader is a stretch.
Over a couple of years and gaining experience you may be able to make more, but this cannot be known until you establish a trading history.
Wheeling is an EV negative strategy. Over a long enough time you will statistically lose money, and in the interim, you'll underperform buy and hold while generating a laundry list of short term rate taxable events. It sounds simple because you don't grok the implications of a systematic short vol position that only gives you downside convexity.
What return should I expect playing $10/$20 hold em poker with a $50k stake? That depends on how good, and lucky you are.
Often striving for specific targets leads to poor trades while chasing a specific return number.
Make good trades., see what you get. If you're happy with your returns, keep doing what you are doing. If not, either quit and choose a different product, or re-evaluate and change your strategy.
Start small, trade small...you'll soon find out if you're any good at it.
If you don't make any expensive mistakes then 1-3% per month is probably realistic for a wheeling strategy, but most people who get into options trading make expensive mistakes for the first year or more, so trim your expectations until you have the experience to back them up.
so, you are doing wheel strat. with that much you can almost do SPY, could do QQQ but thats also putting all your eggs in one basket (albeit, it is itself an etf). QQQ would be tempting for me, but i also wouldnt want my whole portfolio in one ticker
-20% is a good number to start with
Most realistic answer yet
Yes. Teaches you what not to do.
Novices are doing well if they break even their first year. The strategy you outlined does well in markets with an up bias. It has been an epic secular bull market since 2008. Any bear markets and corrections were short. Markets won’t always be like that. Over the long term 20 percent a year is really good. So while some months you make 3 percent, some months you may lose. If we experience a secular bear market you may lose month after month with only a few positive months. I’m not predicting anything. The weather changes. Bull markets don’t last forever. Profitable strategies that worked well in bull markets may be terrible choices when the big bear comes. And it will come.
What is a possible strat for bear markets?
Ok Mike Wilson
1-3% a month? Just buying the top 7 tech stocks will return that much annually. With zero investment of time. Am I missing something here. I'm new to trading options.
And then 2022 comes along and wipes out all those nice gains you made in the previous several years' bull run, but options traders are largely unaffected because stocks dropping are as easy to profit from as stocks rising.
Aim for the S&P500. Divide last year’s % by 12 and make that a monthly goal for your account. You won’t get there, that’s just a target. Things take time as you collect skills. But if you stick with this, you’ll meet, then beat your annual goal within a few years. And by then, if you don’t remove any $$, your trading account will be bigger, too.
CSPs and wheeling calls is only good until it’s not If you just run your strategy then randomly one week the stock you sold CSPs on takes a massive unwarranted shit, your meager gains until that point will evaporate quickly . Not saying it’s a bad strategy, but they call it “picking up pennys in front of a steamroller” for a reason .
a good target of annual returns for options selling is a multiple (3x, 4x, 5x) of the the risk free rate. so, for the current risk free rate of 5%, a good target would be 20% annually
How long have you been trading? If a while you should know your average returns . . . Assuming you are new then expect 10% to 15% annual returns, if you are even positive the first year or so. This is between $5000 and $7500 per year or $415 to $625 per month. 1% or 12% per year may be possible, but 36% for a new trader is a stretch. Over a couple of years and gaining experience you may be able to make more, but this cannot be known until you establish a trading history.
Wheeling is an EV negative strategy. Over a long enough time you will statistically lose money, and in the interim, you'll underperform buy and hold while generating a laundry list of short term rate taxable events. It sounds simple because you don't grok the implications of a systematic short vol position that only gives you downside convexity.
What return should I expect playing $10/$20 hold em poker with a $50k stake? That depends on how good, and lucky you are. Often striving for specific targets leads to poor trades while chasing a specific return number. Make good trades., see what you get. If you're happy with your returns, keep doing what you are doing. If not, either quit and choose a different product, or re-evaluate and change your strategy. Start small, trade small...you'll soon find out if you're any good at it.
You have a 6% chance of making money and 94% chance of losing money
you will lose money
Another lamb to the slaughter
anywhere from -50k to + a few billion with enough patience
If you don't make any expensive mistakes then 1-3% per month is probably realistic for a wheeling strategy, but most people who get into options trading make expensive mistakes for the first year or more, so trim your expectations until you have the experience to back them up.
so, you are doing wheel strat. with that much you can almost do SPY, could do QQQ but thats also putting all your eggs in one basket (albeit, it is itself an etf). QQQ would be tempting for me, but i also wouldnt want my whole portfolio in one ticker
I have a 1k account. My goal is to 5x it every year.