2nd Short Strangle Campaign, Started 6/21/21 – Full trade log

When I started this website I’d been trading 10 Delta Short Strangles in a TD Ameritrade paper-money account for about 9 weeks and was astounded by its performance. So I started the website to describe the strategy, talk about how to make the trades, and keep a trade log. But it wasn’t until Week 10 that I started documenting my trades in real time, using real-world experiences as they came up to show how I managed trades that misbehaved, how I collected more premium while in a trade, or the effect of gamma, etc.

If you haven’t read through that content I encourage you to, because I laid out a typical trade in great detail and explained what I do, why I do it, and all the terminology. I ended that campaign after the account doubled in 13 weeks and 2 days. In this 2nd campaign I think I can reach doubling a little quicker, but I’ll try to be more succinct with trade descriptions because I’m assuming you already know my methodology and the nomenclature.

I’ll manage this page as a real-time Trade Log, both for my benefit and for anyone who wants to follow along (or finds it later). I’ll document EVERY short strangle I put on, AND every time I adjust a trade. I use 75% keep-profit good-till-cancelled (GTC) buy-to-close (BTC) orders, so if you don’t see a trade mentioned again after it was opened, it’s because it closed automatically. (But this first week I list all the trades that come off, mainly to show how they tend to play out on a daily basis.)

It’s elsewhere on the website, but the strategy in a nutshell: Choose a stock with high Implied Volatility; if it’s Monday or Tuesday, work in THIS week’s expiration; otherwise, look at NEXT week (I’m doing about 3-9 DTE); set up a strangle with the Put & Call each at about 10 Delta (Greek letter ∆ from here on); calculate ROI as Premium ÷ Buying Power Reduction (BPR), and if it’s >1% per trading day, make the trade (after setting # of contracts for up to 5% account allocation per trade); immediately place a GTC closing order to buy back the strangle at 25% of Premium received (thus keeping 75% of potential profit); as trades roll off, maintain close to 90% invested.

I started this campaign with $10,000 in the TDA paper-money account because that’s kind of the standard, “If you had invested 10k in this mutual fund you’d now have x dollars” formula you see in the literature. Plus it’s an amount that 1) a smaller/newer trader might have available to invest, or 2) a more seasoned trader, but maybe new to options, might feel comfortable putting toward a strategy like this. You only have to have $2,000 to trade this strategy, but you need that much because you need a margin account and I think 2k is pretty standard for that. (PLUS you need to be approved by your broker to trade the highest level of options, naked Puts and Calls; that’s called Tier 3 at TDA and Fidelity, maybe the same everywhere. I’m working on that right now with TDA; when I get it I’ll start a campaign with real money.)

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  151. Hi there this is somewhat of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding skills so I wanted to get advice from someone with experience. Any help would be greatly appreciated!

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  152. I know this if off topic but I’m looking into starting my own blog and was wondering what all is required to get set up? I’m assuming having a blog like yours would cost a pretty penny? I’m not very internet savvy so I’m not 100% sure. Any recommendations or advice would be greatly appreciated. Kudos

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