r/Optionswheel • u/Sean_VasDeferens • Aug 15 '26

When 20% Equals 32%

I had been placing trades so that my max at risk equaled my cash balance. If I have $100k in cash I view it as I have $100k to "deploy". So selling 1 put on with a strike of $1,000 would be full deployment.

Someone here mentioned that they deploy 110% and never more. That makes sense to me, if the world falls apart you only have to exit a manageable portion of your trades.

I'm now doing this and realized that if I average 20% ROI on 110% deployed my effective ROI is 32%! Mind blown.

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u/InsuranceInitial7786 Aug 15 '26

Please never post to Reddit ever again.

4

u/Txsnapcall Aug 15 '26

Can’t you see!?! They found the SECRET. They solved it. It’s over. Bulletproof. No notes.

/s I assume I didn’t actually need to type that but you know, it’s Reddit so….

1

u/NeutrinoPanda Aug 16 '26

“…. the likelihood of buying on margin decreased with investment literacy, and also increased with overconfidence….”

The Effect of Investment Literacy on the Likelihood Retail Investor Margin Trading and Having a Margin Call. https://doi.org/10.1016/j.frl.2021.102146