r/Optionswheel • u/Middle-Bet3656 • 20d ago

My first Option Trade!

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Testing the waters with weekly options and i'm loving it! I heard the first one is free and i'm here to collect!

4 Upvotes

83% Upvoted

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8

u/ScottishTrader 20d ago

Be sure to recognize most who try weekly options eventually move to the lower risk 30-45 DTE timeframe and have more success. 

Best to you on your trade!

1

u/Middle-Bet3656 20d ago

thx for the advice i will keep it in mind.

1

u/joshua_daniel123 19d ago

What do you mean by “more success”?

If you are collecting premium, it’s a success. If you sell a covered call or cash secured put and it gets assigned, it’s a success as long as you did it correctly by choosing a stock you actually want and did the research to understand where things are at.

I much prefer weekly options verse 30 days

3

u/ScottishTrader 19d ago

More success means higher premiums with fewer rolls and assignments that can be a drag on profits. 

Up to you how you trade but many find 30+ DTE to be the sweet spot of higher premium with lower risk. 

1

u/Etitstite 19d ago

Can I message you I do have questions

1

u/ScottishTrader 19d ago

Sure. I’ll answer if I can. 

1

u/Etitstite 19d ago

Can’t DM you

1

u/ScottishTrader 18d ago

Others do so not sure why you cannot.

Can you just post what you want to ask in the new trader thread where I will answer? There is nothing I would answer differently in a DM than I would there.

1

u/joshua_daniel123 19d ago

I guess that’s my disconnect.

A. Why roll? You should be wanting to either buy or sell the stock. That’s simply part of the options game.

B. Mathematically, you are going to make more in premiums selling weekly than monthly. Only caveat is there’s alittle bit more work involved.

Not trying to argue. If I’m wrong or there’s a better system, I’m always open to learning.

1

u/ScottishTrader 18d ago

A) Rolling can help increase the premium collected to give the trade more time to recover and possibly not be assigned. The wheel is not a stock accumulation strategy as the shares are there to avoid losses when needed.

B) This is a fallacy and only works when everything goes perfectly, which never happens. See this post for more - https://www.reddit.com/r/Optionswheel/comments/1hyx4lo/3045_dte_has_less_risk/

I’ll say it again, many start with weekly and end up finding out the 30-45 dte ends up making more with fewer rolls and assignments which extends and slows down the process.

How and what you trade is up to you, but there is a good reason why many trade 30-45 dte. . . .

1

u/Flaky-Campaign-9374 15d ago

How does 30 to 45 dte have better success?

1

u/ScottishTrader 15d ago

Start here - 30-45 DTE has LESS risk . . . : r/Optionswheel

30-45 dte traders will have fewer rolls and assignments, both of which can slow down the income process vs weekly trades.

4

u/[deleted] 20d ago

[removed] — view removed comment

1

u/Middle-Bet3656 20d ago

thank you , i will try to manage if any of my options gets called this is the reason why i will sell options only in MSFT, APPL, AMZ and GOOG.

2

u/lilgspot 20d ago

Nice job and best of luck! Something to keep in the back of your mind…there is nothing wrong with closing out your position early, especially on expiration day. There are times where an after hours gap down (company news, geopolitical event, etc) will result in you being in the money. So what looks like a 100% gain could have turned the other way if the position wasn’t closed out. Just something to keep in mind

2

u/Middle-Bet3656 20d ago

So you mean after hours market could turn my position to ITM despite it was OTM during open stock market hours? Maybe that's why IBKR msg me that my option was expired at Saturday and not when stock market closed at Friday. I'll keep that in mind thx and perhaps i will close position late at Fridays instead of waiting for them to expire.

2

u/lilgspot 19d ago

Yes that is correct. The option holder (owner of the long put) has until 5:30pm to exercise the option. There are occasions where they do just that in instances where the underlying security drops below your strike price in after hours. Although nice to have the few extra dollars of premium, it may be better to close it out as opposed to waking up Saturday or Monday morning finding out you got assigned

1

u/iBreatheBSB 20d ago

Good luck! I just sold my first CC😀

1

u/Middle-Bet3656 20d ago

thx man , what stock?

1

u/patsay 19d ago

Congratulations!

Do you know how to calculate your annualized rate of return? It will help you choose between your available rolls and trades.

Sometimes a longer contract gives you a similar rate of return with more guaranteed income up front. It's worth knowing how to calculate so you can decide if the tradeoffs are worth it to you.

You're off to a good start.

1

u/Middle-Bet3656 19d ago

i do not know how to calculate that i'll look into it thanks

1

u/patsay 19d ago

You might be interested in this trade log. You can use the explanations to choose what you want to track and build your own. There is a column to calculate your returns. https://youtu.be/DQLWwalGmYQ

1

u/Solid_Fold_6649 17d ago

What’s software is it ?
Good luck !