$224,914.81 Profit Across 1,381 Trades: A Live Breakdown of Earnings Strategy Returns
We are going to analyze two years of running the earnings strategy live. This journal was provided to us by a long time Predicting Alpha member, Jay, who meticulously tracked every single trade he took while running the Earnings Premium Strategy since October 2022. Jay made $224,914.81 and a 89.97% return in two years while […]
What is Volatility In Options and Why Is It Important For Option Sellers?
Option prices are based on volatility. Options were invented as ways to trade volatility. If you want to run a successful option selling portfolio, you must have a complete and thorough understanding of what volatility is and how it relates to the value of options. This article is going to introduce you to the concept […]
Is Selling Options Profitable? The Answer is Yes and Here is Why
A question I get asked all the time is: why do you trade options and not forex, stocks, or futures? Why dedicate all your time and efforts to the options market? The simplest answer is that it’s where we found a way to make money. But I’m not going to leave it at that because […]
Statistics For Option Selling: Essential Concepts You Need To Know
There are some basic statistical concepts that you need to be familiar with in order to be a good option seller. In this article we are going to cover some of the statistics 101 ideas that you need to know to at least get started. You might be wondering why statistics matter in trading. The […]
Where to Place Option Wings When Selling Iron Butterflys and Iron Condors
One of the most frequently asked questions about iron butterflys and iron condors is: “Where should I place the wings?” Understanding the purpose and structure of an iron butterfly is straightforward for many, but determining the optimal placement of the wings often poses a challenge. So I am going to give you a systematic three-step […]
Mastering Days to Expiration (Option DTE) in Options Trading
This blog is going to teach you how to pick the right expiration to trade for your option selling trades. The choice you make for which Days to Expiration (DTE) you trade is a pivotal part of how you express your view on the market, so you need to understand how it impacts your position. […]
How To Trade Changes In Implied Volatility and Profit Off Vega – Option Volatility Trading
Most of the time when we are selling options we are trading the difference between implied and realized volatility. This is the most common way for us to extract the variance risk premium. But there are some unique situations where the real opportunity is not found in trading this dynamic, but actually trading the change […]
Structures Used In Option Selling Strategies – Long and Short Straddles
In options trading there are two fundamental opinions that a trader can express on the market. Long volatility and short volatility. These views are fundamentally your opinion on the difference between implied and realized volatility. When you are long volatility, you are saying that you think realized volatility will be higher than implied volatility. If […]
Mastering Back Ratio Spreads: A Comprehensive Guide for Option Sellers
Back spreads, also known as ratio spreads, are an option selling structure that is highly sensitive to skew and offers a great way for traders to monetize the variance risk premium in ETFs. This article will cover what back spreads are, when and why to use them, and how to manage the associated risks. Key […]
Options Expiration Date: The Importance of Days to Expiration in Options Trading
A key characteristic of option contracts is the number of days until the contract expires, which is often referred to simply as days to expiration (DTE). Simply put if you want to be an option trader you need to understand this term. It is a key factor that affects the pricing and value of options. […]
Introduction to Relative Value Trading: A Profitable Way To Sell Options
One of my favorite option selling topics is relative value trading. It’s based on finding price discrepancies between similar assets and is arguably one of the best approaches to strategy development. Let’s explore how relative value trading works, its applications, and a real-world example that made me some decent coin back in the day. Key […]
How The Term Structure Impacts Option Selling Strategies: A Comprehensive Guide For Option Sellers
In this article you are going to learn about the term structure of an option chain, what it tells us about the market expectations for volatility and how we can use it to make better trading decisions. We took all of the key information you need to take action and compiled it for you into […]