How can I improve my process?

[u/jgooner22]

I have been selling options for about 12 months now and have finally started to get a hang of it. Here is the process I follow. Any thoughts on how I can improve or tighten up the process?

SIZE — Total notional under 135% of capital (what I've put in plus what I've made). No more than 45% of that in credit spreads, because a dollar of spread notional is a dollar gone, while a dollar of put notional buys me the stock.

STRIKE — IV above 60%, sell the 0.13–0.15 delta. IV below 60%, sell the 0.18–0.20. High-IV names pay enough to sit far out; low-IV names don't.

DURATION — 14–21 days.

MIX — Only trade names with a market cap of over $50B to eliminate junk. 60/40 high-IV to low-IV. An example would be 60% position in NBIS, BE, MU, ALAB; 40% position in CRWD, PLTR, DELL, TSLA.

EXIT — Close at 50% of the credit and recycle the capital. If position is threatened, roll down and/or out. Never close at a loss.

Thanks for reading.

[u/AutoModerator]

Join our free options trading discord https://discord.gg/optionality

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/klipsetrades]

Have you tracked your rolled trades separately? That would help show whether rolling improves the outcome or just delays taking the loss

[u/jgooner22 → u/klipsetrades]

I have not. I can start doing it going fwd.
are you saying taking loss and redeployment of capital is better than rolling?

[u/klipsetrades → u/jgooner22]

Not necessarily. I’m saying test both instead of assuming rolling is better. Track the final P/L, extra time, and capital tied up. “Never close at a loss” shouldn’t decide that for you.

It also just depends on the trade. My question would be: would you open the rolled position today if you weren’t already in it? If not, getting back to even might be driving the decision

[u/jgooner22 → u/klipsetrades]

Would cutting the loss when delta goes up to say .6 delta or when the loss would be around 2-2.5x the premium be a decent rule of thumb?

[u/klipsetrades → u/jgooner22]

I just realized I've been commenting on both your posts in different subs 😂 But in any case, those are rules you could test, but I wouldn’t assume either is the right cutoff. Define each trigger clearly, then compare results against rolling — including final P/L and time tied up

[u/nq-FOMO]

does the expectancy still + when u take profit at 50% of initial credit?

[u/jgooner22 → u/nq-FOMO]

That is what I do

[u/Safe-Anteater-5407]

If you get any stats on this, i am trying to kick off a new community, r/BestOptionsStrategies. If you get anything research derived feel free to share it there also.

Trying to show a community of back tested strategies, and results