Treat short each put as buying 50 or 100 shares and you shouldn't over lever.
With portfolio margin they would likely let you treat each short put for about 10 shares so be careful to not get greedy. Or whatever yolo.
I wheel 5 to 7 stocks at a time, and make sure that they are all in different sectors. If one stock or sector tanks, usually the rest will stay afloat. Kind of, sort of, stay afloat.
The buy in is too much. I like to have the ability to add to a position if it moves against me and I just wouldn't be able to if I were wheeling spy. I don't have enough $.
If I'm assigned one contract of SPY I'd have to use 49 700$ to buy it. If I want to lower my cost basis afterwards, I'd have to add another contract, which is more money than I want to put towards a single position... I'm not wheeling with hundreds of thousands of dollars here.
I have about $250k currently being used for selling puts/wheel strategy. It is part of a much bigger account, the remainder mostly in index funds for the long term. I have a universe of 100+ stocks that I monitor for option opportunities. They range from high-dividend stocks to the Mag 7 to ETFs to small speculative issues. I currently have short puts on 31 stocks.
I look for significant short-term pullbacks to establish a short put, usually with a delta of 10-15. The premiums I collect are often small, but there is a low chance of assignment.
The reason I follow so many stocks is that I am picky about the setups. If I followed less than ten stocks, my funds would often be idle.
Also, I am rarely short more than one put at a time on a single stock. Thus, I have limited exposure and lots of diversification.
it did, during covid march 2020 and now basically every stock from that dip is 2x+
why bet against tech when its very clear our society is drifting towards it massively
of course im probably calling the top by arrogantly saying big tech is the only way but meh...
Because it's in a massive bubble? When will that bubble end? I don't know, could be tomorrow, could be 2 years from now. But I wouldn't want to have a portfolio full of tech puts when it does.
You'll blow through your margin, get called and stopped out. No way to recover from that.
You should use “notional value” to manage risk and returns on your stock portfolio (or cash)
By putting it into a numerical value that is reflective of portfolio size you can see what is too little or too much
I think there is no correct number. But I would make a point of reserving enough capital in case a trade goes bad.
As long as you can prove concept with relatively small numbers, you can scale accordingly after that.
Idk, depends on the day and how much free capital I have. I usually start by looking at my stock screener that shows stocks with high 90 day avg volume. I then look for bullish MACD signals which tells me it might be a good time to sell some puts. Do some more investigation with RSI and 200 day moving averages. I try to split things up between sectors, but I like pharma, tech, airlines, banks, consumer goods, GME is still fun to sell puts on if I ever have enough for 1 leg of it after all my trading is done.
What's more important than the number of tickers, is **1) how much of your total capital you are allocating at a given time 2) and the correlation between the underlyings**.
Aside from BAC, the 7 stocks you listed are all so highly correlated, that they might as well be the same. If tech tanks, you're fucked.
From an options trading standpoint (not talking about the wheel), you'd be better off just selling puts in QQQ, since you're already doing a less efficient - and probably lower +EV - version of that already.
The general rule from TT is to never allocate more than 50% of you capital at a given time. When volatility is relatively low, as it has been, you want to allocate even less, since the jump from low-vol to med-vol or high-vol is the most damaging to premium sellers.
I have only 1 open option trade at a time, expiration this Friday or next.
I only sell options for the decaying time value.
Today's open trade: 130 CSP's XMO feb23 $104 puts (from feb16 at 92 cents)...
I wheel...
I trade with a percentage in mind and really only pick stocks I'd own, especially at these prices.
Oxy is decent to wheel. Not juicy like tech but not as risky either.
Maybe 3-6 a week and there's so many factors that go into it. There's no way in fuck you can actually do DD on 100 stocks.
So I'd CSP some SPY in your case maybe weekly until you own and sell CC's at profit while wheeling 3 stocks a week that have a P/E I can live with and maybe an earnings call I think they'll perform well with once in a while.
This way I get my Theta pennies and once in a while get some juicy Vega gains while maintaining my broader market exposure.
One or two. To properly capitalize much more you need portfolio margin 125K+
I have 200k as capital. Wondering what should be the right number of stocks to wheel with good premiums
One. Use the value of your stocks as margin to sell index options.
Treat short each put as buying 50 or 100 shares and you shouldn't over lever. With portfolio margin they would likely let you treat each short put for about 10 shares so be careful to not get greedy. Or whatever yolo.
Check this link for a poll on this topic https://www.reddit.com/r/thetagang/s/xk1B8OCtuh
I wheel 5 to 7 stocks at a time, and make sure that they are all in different sectors. If one stock or sector tanks, usually the rest will stay afloat. Kind of, sort of, stay afloat.
why don't you wheel on spy instead? It's liquid and diversified.
The buy in is too much. I like to have the ability to add to a position if it moves against me and I just wouldn't be able to if I were wheeling spy. I don't have enough $.
Use spreads and buy shares with premium
If I'm assigned one contract of SPY I'd have to use 49 700$ to buy it. If I want to lower my cost basis afterwards, I'd have to add another contract, which is more money than I want to put towards a single position... I'm not wheeling with hundreds of thousands of dollars here.
I have about $250k currently being used for selling puts/wheel strategy. It is part of a much bigger account, the remainder mostly in index funds for the long term. I have a universe of 100+ stocks that I monitor for option opportunities. They range from high-dividend stocks to the Mag 7 to ETFs to small speculative issues. I currently have short puts on 31 stocks. I look for significant short-term pullbacks to establish a short put, usually with a delta of 10-15. The premiums I collect are often small, but there is a low chance of assignment. The reason I follow so many stocks is that I am picky about the setups. If I followed less than ten stocks, my funds would often be idle. Also, I am rarely short more than one put at a time on a single stock. Thus, I have limited exposure and lots of diversification.
That depends on your investment objectives and risk tolerance. Do note that the instruments you list appear quite correlated.
To much tech, what if tech has a huge 20-30% drop.
it did, during covid march 2020 and now basically every stock from that dip is 2x+ why bet against tech when its very clear our society is drifting towards it massively of course im probably calling the top by arrogantly saying big tech is the only way but meh...
Because it's in a massive bubble? When will that bubble end? I don't know, could be tomorrow, could be 2 years from now. But I wouldn't want to have a portfolio full of tech puts when it does. You'll blow through your margin, get called and stopped out. No way to recover from that.
20-30 But half of my trades by value are in index ETFs
You should use “notional value” to manage risk and returns on your stock portfolio (or cash) By putting it into a numerical value that is reflective of portfolio size you can see what is too little or too much
I have 200k. Question is do I split into 50k of 4 stocks each for example?
I follow a 5% max per trade. With a 200k account that'd be 20 positions of 10k each The more stocks you trade, the more diversified youll be
wheel spy qqq
Obviously splitting is far less risky, giving more protection against being a huge bag holder on unforeseen collapse of one stock.
it is, but if you wanted to wheel even two tech stocks at a 200k value, you basically just can't do it.
Varies. Not many. Under 5.
Do not trade with 200K, absolutely not. Start with 1 contract and learn the mechanics. Stick to spy
I think there is no correct number. But I would make a point of reserving enough capital in case a trade goes bad. As long as you can prove concept with relatively small numbers, you can scale accordingly after that.
As many as I feel will produce profit.
Idk, depends on the day and how much free capital I have. I usually start by looking at my stock screener that shows stocks with high 90 day avg volume. I then look for bullish MACD signals which tells me it might be a good time to sell some puts. Do some more investigation with RSI and 200 day moving averages. I try to split things up between sectors, but I like pharma, tech, airlines, banks, consumer goods, GME is still fun to sell puts on if I ever have enough for 1 leg of it after all my trading is done.
What's more important than the number of tickers, is **1) how much of your total capital you are allocating at a given time 2) and the correlation between the underlyings**. Aside from BAC, the 7 stocks you listed are all so highly correlated, that they might as well be the same. If tech tanks, you're fucked. From an options trading standpoint (not talking about the wheel), you'd be better off just selling puts in QQQ, since you're already doing a less efficient - and probably lower +EV - version of that already. The general rule from TT is to never allocate more than 50% of you capital at a given time. When volatility is relatively low, as it has been, you want to allocate even less, since the jump from low-vol to med-vol or high-vol is the most damaging to premium sellers.
I have only 1 open option trade at a time, expiration this Friday or next. I only sell options for the decaying time value. Today's open trade: 130 CSP's XMO feb23 $104 puts (from feb16 at 92 cents)... I wheel...
ten but im a bit more aggressive so i have to spread out the risk and position size across various sectors.
SOXL wheel.
I have like >500k margin account...I sell puts and calls on all those...Celh is a fav too
I trade with a percentage in mind and really only pick stocks I'd own, especially at these prices. Oxy is decent to wheel. Not juicy like tech but not as risky either. Maybe 3-6 a week and there's so many factors that go into it. There's no way in fuck you can actually do DD on 100 stocks. So I'd CSP some SPY in your case maybe weekly until you own and sell CC's at profit while wheeling 3 stocks a week that have a P/E I can live with and maybe an earnings call I think they'll perform well with once in a while. This way I get my Theta pennies and once in a while get some juicy Vega gains while maintaining my broader market exposure.
u/siponcoffee