r/options
All my trading income is from selling naked puts and CC. Other strategies to incorporate w/ margin?
Author shares success selling naked puts and covered calls for income, seeking margin-friendly strategies for sideways or bear markets.
- Selling naked puts and covered calls has consistently generated income and compounded portfolio value.
- Successfully navigated macro shocks like tariff and geopolitical events without losses.
- Over-reliance on selling naked puts carries significant tail risk, often criticized as picking up pennies in front of a steamroller.
- The strategy may underperform or face severe drawdowns in a prolonged bear market or severe market crash.
I know, I know... "Pennies in front of a steamroller." But I find this mindset to be very surface level, as selling naked puts has been one of the most efficient ways for me to generate income and increase the value of my portfolio via compounding effects.
My general strategy for selling naked puts has been to have 20-30 reputable companies on my watch list and sell monthly puts \~25% OTM on any of those stocks that are experiencing higher IV than average (while obviously being mindful of house surplus balance requirements).
I've managed to wiggle out of the Trump tarrif shock, the Iran war, etc etc without any losses while generating pretty consistent income all other months for a few years.
With that said, I do acknowledge I'm taking more risk by relying a bit too much on selling naked puts and understand we're in a bull market. What other option strategies should I consider that would work better for times when the market as trading sideways or a prolong bear market, while using margin? My cash balances on my taxable accounts are always negligible (or zero).
My taxable account balance is about 200k at the moment.
My taxable account balance is about 200k at the moment and I'm generating about $2200 / month through my trades.
You can sell SPX naked puts monthly to make 2K with less K.
For example, the Jul 17 7050 put is 21.45. You can sell 1 put for 2,145. Delta is 0.10, collateral is 70,500.
Index puts are settled in cash and the gain is taxed 60% long term and 40% short term.
Are you living on the money or just paying taxes and doing more trading? If that is the case, just buy QQQ or something and you'll be better off.
I left my job a few months ago so I'm using the options trading income for my monthly expenses for now and the foreseeable future.
My portfolio is definitely a long term hold.
Call credit spreads are an option. Although you’d have to be aggressive either on the spread between short and long or strike close to the money.
Wheel a couple SPY contracts. Take the assignment. You know the drill.