Cycle Trading

[Duma]

Okay you are in the game.

I noticed that SPY has calls for Mon, Wed, and Fri where as QQQ and IWM are only weekly. I am going to look into the SPY calls also because of this. I am almost always gone on Fri riding, so I want to use Wed as my weekly call. So I am thinking buy a 4 week long and sell a 7 day twice. At this point the long will at it 50% time point, so the TV decay will start to really kick in. That will not be good. I did a quick set up and TV for my IWM will be down about 40% after two weeks. They is a lot of profit lost.

Instead I will look at doing a 2 month long option and sell two 7 days options. This would only lose 17% of the TV, much better. It will take more investment, but that is okay at this point.

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I pulled out a folder on option trading that I have had since the 80's that my Dad gave to me. It had very extensive information on two types of trades, vertical and horizontal. They call the horizontal "Time Tactic". With our strikes so close together that is basically what we are doing. It is also called a calendar spread. However I will note that for what I want to do, I still like the idea of always doing 60% deltas.

Here is one page from the book that gives an overview. Take a look at the bullet points especially the one that says this tactic will make money in an up, down, or sideway market. That is what I am finding out also which doesn't make any sense at all. If this was true then everyone would be doing it. So I still feel I am missing something.