I asked 4 famous AI platforms the following question:

Create summary table with brief actionable items for bull and bear markets to reach 4% monthly return on capital selling cash secured puts

Here are responses from Grok, ChatGPT, Gemini and Perplexity

Which one is the most concise and accurate Grok @xai

Stock Market can be used differently in various conditions you are in

Condition 1
Employed / self-employed with adequate monthly income

Condition 2
Employed / self-employed with inadequate monthly income

Condition 3
Not employed / no monthly income with some savings

Condition 4
Not employed / no monthly income without savings

Condition 5
Not employed / no monthly income with major savings (>$500,000)

A thread... Condition 1
Employed / self-employed with adequate monthly income

Here you can / should heavily invest, as much as you can, monthly after every paycheck

Ideally in an Index or Sector Fund
Can be combined with options trading in a form of LEAPS calls, cash secured puts and covered calls

12.5 years of backtesting $SMH
99.59% win rate with Cash Secured Puts
491 trades
2 losses

How? ⏬⏬⏬ If you wanted to sell 16DTE Cash Secure Puts today on $SMH your average premiums ~$2.04 per contract

If you target $2.04 per contract at delta 19 (-0.19) your max risk (of assignment) is $24,750

Return on Risk 204/24750=0.82% (in 16 days)

However⏬

Warren Buffett is well known for his fantastic investment genius mind

But did you know that he is also using Options Selling fairly active

It is not something widely discussed or known in details

Here are some references from Buffett's letters to shareholders wrt Options👇👇 References to Selling Put Options

In 2008 Letter to Shareholders Buffett discussed his use of equity index put options, explaining his rationale and the premiums collected

He emphasized that these positions were written on long durations, aligning with his long-term perspective:

“We have written equity put options on four major stock indexes: the S&P 500, the FTSE 100, the Euro Stoxx 50, and the Nikkei 225… In addition, our contracts run for 15 to 20 years.”

How to manage Covered Call when strike is In The Money and When Stock has dropped way below the breakeven?

I am sure many of us were in one or both of these situations

If you developed another efficient way of handling such situations please share below Scenario 1: Short Strike is in the money

Option1: If there is desire to keep the stock and prevent the stock from being called away

Buy to close a Short call for a loss - not the best solution in my opinion

Options Trading Hack

If you are Cash Secured Puts trader then I have a TRADING HACK for you that will multiply your return on investment multiple times 👇👇👇 If you were selling Cash Secured Put of $SOXL at ~20 delta and 11 DTE you would have received 64$ in premium and that would have impacted your buying power by ~3,500$

Return on capital 1.8% which is not bad for 11 days trading

Nassim Taleb former option trader made his fortune during the crash of 1987, Nasdaq dive in 2000 and the financial crisis in 2007

9 Years ago Nassim Taleb appeared on #reddit to answer questions

I compiled Q&As related to Options Trading in this thread 👇👇👇 Q
In Dynamic Hedging, you talk about an idea called Modified Theta, which is:
price of an option today using current vol, less the price of the same option tomorrow using the vol of one day shorter option
You mention that losses from theta are generally worse than predicted because of this shadow theta (vol will drop over time if market isn't moving).
However, Volatility Trading by Bennett mentions an idea called Volatility Slide Theta, a shadow greek that is observed when skew and IV rise as we get closer expiry, instead of dropping
Are these two ideas reconcilable? If volatility and skew rise as we get very close to expiry, is there a reason for this modified theta? Thanks for the help.

A
Indeed. ATM drops faster, OTM rises. The same idea of shadow theta. Also project that the delta will go lower over time

I want to make Options Selling easy, because

✅ IT IS EASY ✅

I want everyone that is seeking SIDE INCOME to try selling options and feel that sense of huge relief knowing that FINANCIAL FREEDOM is REAL

Here we will review Put Credit Spread and how to sell it 👇👇👇

#Optionselling #OptionsTrading #options #StockMarket #tradingtips #optionseducation Please FOLLOW, LIKE AND REPOST the FIRST post to help spreading the knowledge

Options Selling is a great source of income if done in a right way, following a STRATEGY that was backtested, refined and traded in real life

Today, FINALLY, for the FIRST TIME I will share my BACKTEST RESULTS of a Call Credit Spread

This path of INCOME generation is open to ANYBODY that is ready to put some work in 👇👇👇 I would highly appreciate if you FOLLOW, REPOST AND LIKE this thread

Options Selling, being one of the greatest SIDE HUSTLES is not very difficult to master

Anybody can learn it and with the right strategy can generate CONSISTENT INCOME

Sharing UPDATED study list was completed 1/20/24 on Selling Put Credit Spreads using My Strategy 👇 Some backtests going back >10 years

Now I have also added cheaper stocks that met my criteria

Focus on these stocks with ultra-high win rates and sell based on highest ROC per SPREAD

Avoid earnings period

Happy Trades 👇

This thread is an ULTIMATE GUIDE on Put Credit Spread behavior in various scenarios of the stock price movement

In certain cases even seasoned options seller need to be reminded on specific aspects of a credit spreads

Here we will cover 5 scenarios of price behavior and how our spreads will close at expiration Credit put spread example:

Sell 10 XYZ May 70 puts @ 2
Buy 10 XYZ May 65 puts @ .50 for a net credit of 1.50

This spread is executed for a net credit of $1,500 (2 points premium received – .50 points premium paid x 10 contracts [100 shares per contract])

As shown in the graph, you will profit if the market price of XYZ closes above $68.50 at expiration.

You will maximize your profit ($1,500) at $70 or above

You will lose money if the price of XYZ goes below $68.50, and you could lose up to $3,500 if XYZ closes at $65 or below, at expiration